How the South African Mining Minister Has Been a Pretty Bad Friend

After the United States didn’t block the resumption of Marange exports under the Kimberley Process in 2011, it was desperate to have something to show for an outcome it was clearly not happy about. So the U.S. reps struck a deal with South Africa to carry out what was labeled a two-year “reform agenda,” to bring much-needed change to the KP. To help cement this newfound alliance, after hours at one KP meeting, former assistant secretary of state Jose Fernandez crooned a karaoke duet with the South African delegation, including mining minister Susan Shabangu. The song: “You’ve Got a Friend.”

That’s how much they wanted this to work. Unfortunately, South Africa’s turn as 2013 KP chair achieved some things, but didn’t do all that much for the cause of reform.

This month, Shabangu made her unfriendliest move yet when she sent a letter to the head of the Organisation for Economic and Co-operative Development (OECD) criticizing the Multi-Stakeholder Working Group (MSWG), a coalition of industry groups, NGOs, and government types, including the State Dept. (Disclosure: My wife works for Jewelers of America [JA] and is a participant in the MSWG.)

Shabangu, in a letter quoted in IDEX, claims there has been absolutely no outreach to her continent by the MSWG: “No initiatives have been taken to engage Africa in an exercise which clearly is targeted at adding supply chain controls on our diamonds and precious stones.”

Sounds bad. But it’s not true.

In Aug. 2013, the MSWG, through the Diamond Development Initiative, sent a letter to the executive secretary of the African Diamond Producers Association (ADPA). (The ADPA includes South Africa as well as most African diamond producers.)

The letter, which is partially reprinted at the end of the post, reads:

The MSWG would like to cordially invite you to participate [in the group] and the Diamond Development Initiative encourages that participation…. Your participation in this working group will ensure that a broad range of shareholders are represented in this effort.

It promises a follow-up phone call.

Now, you can say, maybe Shabangu didn’t see that letter. But at least one MSWG group member told me there had been face-to-face meetings with Shabangu about the MSWG at KP meetings. Another reported talking to the former South African KP chair and members of the SA team. (I have sent Shabangu’s chief of staff two emails asking her to clarify her position but have not heard back.)

Confronted with former U.S. State Dept. special advisor on conflict diamonds Brad Brooks-Rubin calling Shabangu’s comments “false,” Chaim Even-Zohar declared that it wasn’t his position to challenge the minister’s claims, but adds “if the reaching out was ignored, Brad, you had better believe that there may be sound reasons for that.”

Most people do things, one hopes, for a sound reason. But it does seem a little contradictory for Shabangu to ignore several outreach attempts and then complain in her letter “there does not seem to be any African representative in the Authorship Committee.” If she and her cohorts don’t want to participate, fine. But then don’t complain that they aren’t involved.

In fact, MSWG members have told me they would love more African participation in the group. On certain conference calls, they openly lamented the lack of producer participation and discussed ways to increase outreach. 

Part of the problem is people like Shabangu either don’t know or are misstating the group’s goals. Her letter says:

[The MSWG] will clearly bypass and discredit the Kimberley Process and the Kimberley Process Certification Scheme, initiatives taken some twelve years ago in full support of all African nations.

Yet, the letter to the ADPA stresses just the opposite:

The MSWG has clearly stated that its efforts to advance responsible sourcing for precious stones are intended to complement, and not undermine or replace, any existing initiatives or certification schemes.

But let’s look at the bigger picture. Commenters like Even-Zohar often claim that American retailers don’t understand downstream dealing and manufacturing. For one, this ignores the fact that Signet and Tiffany have significant diamond- cutting facilities. But hey, everyone can always learn more. Downstream players could always use more education about other parts of the businesss. (Which is actually another argument for both sides to come together in these groups.)

Let’s flip the equation: Do people in the mining countries understand the challenges of retailers trying to sell their product—without which their holes in the ground would be shuttered for good? Do they understand that diamonds have a terrible image among many American and European consumers, and how stupid and self-destructive it is to block attempts to improve that image? Do they realize that, when many consumers have a choice between a synthetic described as “ethical” and a stone that consumers believe could be related to child or slave labor, many will go for the synthetic?

And how did our industry get so divided anyway? Are there real differences of opinion here? Or is it egos? Turf battles? Poor communication? Are some people just fanning the flames?

People overseas seem to view these efforts as an American government/NGO/Signet/JA cabal. And yet when you talk to people involved, it’s a different story. These are very different players with very different agendas; they have been at odds in the past and could end up fighting again in the future. JA and Signet have felt under significant pressure from Fernandez and the NGOs. Just seven years ago, Global Witness—which is participating in the group—was publicly hammering the industry in conjunction with the Blood Diamond movie, causing damage that lingers to this day. The fact that everyone is now working together, relatively harmoniously (and quietly, unlike the beginnings of the KP), is something of an achievement. But at what point do the NGOs and the State Dept. (or a renegade American legislator) say, well this isn’t getting anywhere, the diamond industry keeps getting bogged down in these third-grade-level fights, let’s do something on our own? Global Witness has expressed its desire to pass legislation covering diamonds—and it has a Washington, D.C., office to make that happen. So companies aren’t joining these initiatives because they are saints—it’s for self-preservation.

I do hope Shabangu reconsiders her stance of not engaging with the country that sells about 40 percent of her product. (I am told that other African governments plan to send similar letters. I hope they show a little more regard for accuracy.) South Africa needs to be a better friend, not just to its mines’ largest market, but to the very industry that supplies so much of its livelihood.

 

JCK News Director