Abstract

The temporary suspension of diamond exports in Ghana in 2006 and 2007 is arguably the most significant move to address mounting criticisms of the Kimberley Process Certification Scheme (KPCS), an international initiative aimed at stemming the flow of rough diamonds used to finance wars. The ban, which took effect in November 2006, was much praised, particularly in civil society circles, where it continues to be seen as a genuine effort to prevent the smuggling of ‘conflict diamonds’. At the time, Ghana was accused of harbouring stones originating from rebel-held territories in neighbouring Côte d’Ivoire. No evidence was found in support of the case that it was a repository for ‘conflict diamonds’, however, and exports resumed early in March 2007. This article examines the context for the accusations of Ghana’s implication in the smuggling of illicit diamonds, and draws on recent fieldwork to explain how the suspension has affected Akwatia, the country’s main diamondiferous area. The actions taken raise important questions about how suspected violators – particularly smaller diamond-producing nations – of the KPCS should be handled, and underscore how global compacts can have a host of negative repercussions at the village level.

In a region where its diamond-rich neighbours have been scarred by corruption and caught up in civil war, Ghana has hitherto been a healthy paradox: a stable, though relatively understated, diamond producer. But the country’s reputation was brought into question in 2005, when, following the visit of a Kimberley Process Certification Scheme (KPCS) review team, it was determined that internal controls to prevent diamond smuggling were ineffective.1 Shortly after the visit, a United Nations report, drawing upon conclusions reached by a special envoy to Côte d’Ivoire, concluded that Ghana was potentially harbouring diamonds originating from the rebel-held territories of its neighbour.2 There was soon widespread speculation over Ghana being a repository for ‘conflict diamonds’, and a coalition of NGOs called for a thorough inspection of the country’s policies and monitoring systems.3

On 24 November 2006, Ghana suspended exports of its rough diamonds, a move made in response to these criticisms. As a signatory to the KPCS, Ghana had little choice but to act prudently and demonstrate its commitment. Following implementation of the ban, experts from the World Diamond Council visited the country on three occasions to conduct pre-shipment inspections of rough diamonds.4 Exports resumed temporarily on 5 December 2006 but were once again suspended between 17 February and 7 March 2007.

The decision to implement the ban has been praised by civil society and donor agencies. Specifically, the Kimberley envoy to Ghana has been credited for what is clearly the most comprehensive response to a suspected violator of the KPCS; it is viewed by most outsiders as a genuine attempt to stop conflict diamonds from being smuggled and traded under a façade of legitimacy. But the lasting economic impacts it has had in Akwatia, the country’s principal diamond-producing locality, have been overlooked. Ghana is far from being a world-class producer of diamonds, and, prior to the ban, investor confidence and foreign investment in Akwatia were already dwindling. The ban depressed local prices for diamonds even further, in the process bankrupting hundreds of the industry’s local-level buyers and sponsors. Moreover, many diamond investors and exporters fled the country, fearful of being (wrongly) implicated in a national investigation of ‘conflict diamonds’. Whilst the Kimberley Process Working Group on Monitoring (WGM) continues to be praised for orchestrating the ban and for what has since been seen by many as a thorough review of the country’s relevant policy framework, the prevailing view in Akwatia is that the suspension of exports upset the sector’s fragile production dynamics by discouraging foreign investment, and that it has failed to make Ghana any less likely to harbour ‘conflict diamonds’.5

The Ghanaian authorities cooperated with the KPCS, agreeing to temporarily suspend diamond exports and granting an incoming inspections team permission to conduct a thorough examination of border security, as well as its record keeping and purchasing systems, but did so reluctantly. Officers at the Ghana Precious Minerals and Marketing Corporation (PMMC) argued, albeit with little success, that the rise in the value of the country’s diamond exports, which Kimberley officials attributed to smuggling, was a product of the spike in the market price of diamonds at the time, as well as miners having secured more efficient equipment and increasing their production.6 The plans for a suspension of exports, however, had already been hatched.

Several government officers have since pointed out that their rebuttals to initial accusations were correct: that the inspection team, which would find no credible evidence to suggest that smuggling was taking place, had been informed beforehand that the country was not a conduit for ‘conflict diamonds’. But the Ghanaian government proved to be its own worst enemy, having failed to maintain detailed records of national diamond production and the whereabouts of small-scale miners. Much of the problem stems from the large-scale ‘outsourcing’ of the diamond mining sector to a host of Indian, Sri Lankan, and Lebanese entrepreneurs, the main parties in possession of export licences; they are also entrusted with keeping records of their transactions. In fact, the government – through PMMC – is little more than a ‘catalyst’, helping to facilitate diamond production and trading by providing logistical support to licensees in exchange for nominal taxation payments on exports. Since development of the diamond industry is not a national priority, its small-scale, primarily-subsistence operators receive minimal technological and financial assistance from the government. With no support on the horizon, Akwatia faces an uncertain future.

The purpose of this article is to examine how the decision to temporarily suspend Ghana’s diamond exports came to fruition, and to outline the impacts it has had on the country’s miners, buyers, and dependents. After providing a brief overview of the ‘conflict diamonds’ issue, the article outlines the antecedents of the ban and the different debates on the decision to implement it. Drawing upon interviews with miners, diamond buyers, and government officers, the subsequent section examines how the decision to temporarily suspend diamond exports has affected Akwatia economically. The actions taken in Ghana raise important questions about how suspected violators of the KPCS – particularly smaller diamond-producing nations – should be handled, and underscore how global compacts can have a host of negative repercussions at the village level.

Diamonds, civil violence and the rise of the Kimberley Process

In 1998, Global Witness launched its campaign ‘Combating Conflict Diamonds’, which catalyzed a civil society-led global movement aimed at eliminating production of ‘conflict diamonds’ in sub-Saharan Africa. Shortly after the campaign’s launch, the organization published ‘A rough trade: the role of companies and governments in the Angolan conflict’, a seminal report which argued that diamonds were funding Angola’s civil war; exposed the links the diamond giant De Beers had with Angola’s rebel-held diamondiferous territories; and identified the failures of the UN and EU in preventing member states from fulfilling the embargo on Angola’s illegal diamond exports.7 In 1999, the NGO Partnership Africa Canada joined the campaign, launching an intensive complementary programme of policy research, education, publication, and advocacy. A coalition of other NGO partners, ‘Fatal Transactions’, simultaneously emerged.8 The exposure of similar problems in the Democratic Republic of Congo (DRC) and Liberia further legitimized its purpose. At the time, it was estimated that African rebel groups were supplying as much as 20 percent of the world’s rough diamonds.9

The movement laid important groundwork for change in the diamond-mining sector. The pressure it exerted brought officials from diamond-producing countries, the private sector and civil society together in May 2000 in Kimberley, South Africa. The meeting initiated an important, in-depth, three-year negotiating process that culminated in the launch of the KPCS, ‘the first international agreement in global trade politics that has been adopted in consensus by governments, industry, and NGOs’.10 The initiative came into effect on 1 January 2003, and was legitimized by the United Nations on 28 January 2003, following the adoption of Resolution 1459.

The KPCS has been a major public success. It has expanded from the original 35 countries to over 70 signatories, and has certainly played a part in channelling funds accrued from diamond mining away from rebel groups, terrorist activities, and corrupt politicians, whilst simultaneously increasing the sector’s contribution to taxes, investment, and development in exporting countries such as Sierra Leone and the DRC. Diamond experts estimate that the KPCS and the awareness it has spawned in consumer circles has reduced international trade in ‘conflict stones’ to less than half of a percent of global diamond production. As pointed out by officials at Partnership Africa Canada, the KPCS ‘may be the biggest thing that has happened to the diamond industry in a hundred years’.11

But sceptics argue that it is far from a panacea. The central criticism of the initiative is that it is voluntary: that, as a ‘soft law’, it is ‘founded upon a series of guarantees by government authorities’ for which ‘it is unclear what penalties, if any, will be applied to transgressors, aside from possible expulsion [from the KPCS]’.12 Many critics have also argued that the KPCS does not deal comprehensively with the larger issue of the illegal diamond trade. Instead, by sanitizing the industry from the market side and not the supply side, it enables consumers to ‘buy diamonds with a clear conscience’ because they believe they are not purchasing ‘conflict diamonds’, when, in fact, transactions might be funding illegal activity ‘outside of the narrow definition provided by the KPCS’.13 In 2005, Global Witness published ‘Making it work: why the Kimberley Process must do more to stop conflict diamonds’,14 a report which contains detailed accounts of diamonds being smuggled from rebel-held territories in sub-Saharan Africa. A major focus of the report is Côte d’Ivoire, where diamonds originating from pits in the rebel-controlled villages of Seguela, Bobi and Diarabala in the country’s northern territories were providing a major source of income to the rebel group, Les Forces Nouvelles. The document revisits claims made in a report published in November 2005 by a United Nations Panel of Experts on Côte d’Ivoire, which concluded that annual diamond production in the country was in the range of 300,000 carats.15 Global Witness put forward several recommendations in ‘Making it work’, including ‘an urgent review visit to neighbouring Ghana and Togo to assure Kimberley Process participants that the countries’ controls are able to prevent cross-border diamond traffic from Côte d’Ivoire’.16

Growing awareness of the situation in Côte d’Ivoire provided a platform for Kimberley officials to demonstrate their commitment to monitoring and enforcing the KPCS. Acting upon the advice of Global Witness, they undertook a thorough investigation of Ghana’s regulatory and monitoring framework for diamonds, which, following a ‘review visit’ in December 2005, was determined to be ‘lax and inadequate’.17 The visit fuelled speculation over Ghana potentially being a conduit for Ivoirian ‘conflict diamonds’. Echoing the speculations first made by Kimberley officials, a United Nations Expert Group published a report in October 2006 which alleged that Ghana was indeed harbouring and exporting diamonds originating from the territories controlled by Les Forces Nouvelles. The NGO Amnesty International pursued the issue further, reporting that:

In October 2006, a report of a UN Group of Experts on Côte d’Ivoire concluded that conflict diamonds from Côte d’Ivoire were infiltrating the legitimate diamond trade through Ghana, a Kimberley Process participant. Conflict diamonds worth up to $23 million have been smuggled from the rebel controlled areas in northern Côte d’Ivoire into Ghana where they have been certified as conflict-free due to Ghana’s weak system of internal controls.18

As one of the ‘lesser’ and often-forgotten diamond producers in the West African subregion, Ghana was unprepared for dealing with the repercussions of these accusations. After government officials failed to produce sufficient evidence to demonstrate that the country was not a repository for ‘conflict diamonds’, Kimberley officials called for a temporary ban on exports of Ghanaian diamonds. This took effect in November 2006.

Whilst the move – described by a senior government official recently interviewed in Accra as a ‘mini embargo’ and perceived industry-wide as a genuine attempt to ‘crack down’ on violators of the KPCS – has drawn considerable praise, the impact it has had on the country’s subsistence artisanal diamond mining community has been overlooked.19 At the time of the ban, Ghana’s diamond sector was already in a fragile state, crippled by decades of under-funding. A possible association with ‘conflict stones’ has discouraged investment in Ghanaian diamonds even further.

Ghana, Kimberley and the ‘mini embargo’

Kimberley officials concluded at a KPCS Plenary Meeting in Botswana’s capital Gaborone in November 2006 that there were ‘credible indications of significant non-compliance with the minimum requirement of the Kimberley Process Certification Scheme (KPCS)’ in Ghana.20 In support of their position, they drew attention to an incident in July 2002 in the United Arab Emirates involving the interception of a KPCS-certified diamond package originating from Ghana that was later determined not to be of Ghanaian origin. They further explained that two Belgian dealers specializing in the trade of Ivoirian diamonds relocated to Ghana after civil conflict erupted in Côte d’Ivoire in 2002, and that they have since become the biggest exporters of rough diamonds in the country. It was argued that the dealers were still sourcing diamonds from Côte d’Ivoire, and that both are under a separate judicial investigation in Belgium for possible violation of a UN import ban on Ivoirian diamonds. 21 But, most significantly, the Ghanaian delegation was unable to produce a ‘paper trail’ which adequately explained, in the judgement of Kimberley officials, why the country had experienced a 210 percent increase in the value of its diamond exports between 2000 and 2005 (Table 1). During the same period, Côte d’Ivoire, also a signatory to the KPCS, had failed to declare any of its official diamond exports. Echoing the views expressed in the report by the United Nations Expert Group in 2005, the Plenary concluded that Ghana was indeed the destination of a significant share of the US$23 million ‘unaccounted for’ diamonds being produced annually by its neighbour.22

Table 1

Diamond production in Ghana, –200724

Year Carats (000) Value (US$ millions) Av. Price/CT US$ 
1989 151.61 2.11 13.92 
1990 484.88 14.28 29.45 
1991 541.85 17.44 32.19 
1992 479.87 13.04 27.17 
1993 368.19 11.57 31.42 
1994 411.40 11.55 28.07 
1995 335.17 7.31 21.81 
1996 450.35 9.82 21.81 
1997 558.90 11.75 21.02 
1998 570.19 11.40 19.99 
1999 490.40 9.26 18.88 
2000 626.84 10.63 16.96 
2001 870.49 18.51 21.26 
2002 969.12 20.24 20.88 
2003 916.69 21.78 23.80 
2004 920.28 26.32 28.60 
2005 1013.62 33.88 33.42 
2006 978.73 30.96 31.63 
2007 865.61 27.86 32.18 
Year Carats (000) Value (US$ millions) Av. Price/CT US$ 
1989 151.61 2.11 13.92 
1990 484.88 14.28 29.45 
1991 541.85 17.44 32.19 
1992 479.87 13.04 27.17 
1993 368.19 11.57 31.42 
1994 411.40 11.55 28.07 
1995 335.17 7.31 21.81 
1996 450.35 9.82 21.81 
1997 558.90 11.75 21.02 
1998 570.19 11.40 19.99 
1999 490.40 9.26 18.88 
2000 626.84 10.63 16.96 
2001 870.49 18.51 21.26 
2002 969.12 20.24 20.88 
2003 916.69 21.78 23.80 
2004 920.28 26.32 28.60 
2005 1013.62 33.88 33.42 
2006 978.73 30.96 31.63 
2007 865.61 27.86 32.18 

Ghana’s policy makers were outraged by the accusations, the acting director of PMMC noting at the time that ‘[the government] unequivocally rejects the conclusion attributed to the report of the UN panel that conflict diamonds of [Ivoirian] origin are being smuggled into the country and exported to the outside world’.23 In a recent interview, a government officer in Accra explained that many policy makers believe that Ghana was simply a scapegoat, possibly stemming from its delay in becoming a KPCS signatory, and a convenient location for Kimberley officials to ‘flex their muscles’ in response to mounting criticisms of the scheme’s unenforceability.25 The government defended its position at the KPCS Plenary in Gaborone. In response to observations made by Kimberley officials that the increased diamond production that occurred between 2000 and 2005 could not be accounted for, PMMC officers pointed out that exports had not risen continuously over the period as portrayed – rather, they had experienced a decline in 2003, in line with market trends. They also argued that the package in the United Arab Emirates did, in fact, contain product originating from diamond-producing areas of Ghana.26

The government furthermore indicated that Kimberley officials and the UN Expert Panel had both failed to take stock of the rapidly changing dynamics of diamond production unfolding in the country at the time – something accurately known not even to most Ghanaian officials. Unlike other countries in West Africa, Ghana’s diamond reserves are relatively localized, confined to areas in and around Akwatia, a small town of approximately 23,000 people located in the Kwaebibirem District in the Eastern Region of the country (Figure 1). Akwatia’s diamond production has been both inconsistent and unpredictable since the closure of Ghana Consolidated Diamonds (GCD), a state-owned company that has been slated for divestiture for more than two decades and which was the only large-scale diamond producer in the country in late 2007.27 The Akwatia mine, which commenced operation in the 1920s,28 initially under the auspices of the Consolidated African Selection Trust (CAST), was taken over by the government in 1982 and subsequently renamed GCD. Its operationsrapidly deteriorated because of undercapitalization; no attempt was made to improve plant maintenance or replace the mine’s obsolete machinery.29

Figure 1

Location of Akwatia, Ghana’s main diamondiferous area.

Figure 1

Location of Akwatia, Ghana’s main diamondiferous area.

Most of the few ‘traceable’ diamonds found in Ghana originate from licensed small-scale ‘tributors’ working small plots of land within GCD’s concession (185.35 square miles). The company’s decreased production in the 1980s resulted in a significant retrenchment of its workers and the closure of many ancillary industries in Akwatia. With few alternative sources of employment, many people began encroaching on the GCD concession to mine diamonds illegally. After several unsuccessful attempts to remove these galamsey30 from the concession by force, and under mounting pressure from the community, GCD officers brokered an agreement with the encroaching miners, described by Nyame and Danso as a ‘marriage of convenience’.31 The negotiations spawned the ‘tributor system’, a scheme under which prospective tributors and their employees are required to register with GCD, carry their ID cards with them at all times, and sell all mined product to company buyers.32 The purpose of the scheme, according to GCD’s managing director, is to ensure that ‘tributors were always behind us [the company]’, meaning that the company only assigned tributors areas that are: (1) low grade; (2) ‘mined-out’; and (3) inaccessible, or in a location where the company is unable to operate with its heavy equipment.33 Increased participation in the tributor scheme, the acting director of PMMC noted, was in part responsible for the marked rise in diamond exports. As of August 2008, there were 474 registered cooperatives on the GCD concession, employing over 3,700 people.34 For the company, which was completely cash-strapped at the time, the move paid immediate dividends: its production, which between 1990 and 1999 had declined by about 50 percent to 2,244,240 carats, was partially offset by the growth of small-scale diamond mining on its concession, its output increasing to 4,637,093 carats in large part because of the tributor system. But it became increasingly challenging for the cash-strapped company to purchase diamonds from its tributors. This fuelled the expansion of Akwatia’s ‘Belgium Market’, a vibrant area located at the ‘main junction’ of the town. Here, buyers arrive at 8 a.m. daily to purchase locally mined diamonds, including those extracted by GCD tributors.

The arguments made by both Kimberley officials and PMMC officers at Gaborone reflect a poor understanding of these dynamics. Had accurate information about small-scale diamond mining been available at the time, it might have prevented the call for a ban on diamond exports, the impact of which has been catastrophic in Akwatia. The case made by PMMC officers was that the steady increase in the number of tributors on the GCD concession was contributing to a precipitous rise in diamond exports. Kimberley officials immediately dismissed the claim, countering that it was impossible because the concession’s diamond deposits were depleting, which was indeed the case: most of the few accessible diamonds that remain scattered within the GCD concession are considered ‘salt money’ – a local label given to second-grade stones, which, as one buyer explained, ‘look like the lumps of salt you put in your soup’.35 Both parties, however, crucially overlooked the production that was taking place at the innumerable galamsey operations located outside of the GCD concession. Most, if not all, of the diamonds extracted from Kade, Asin Fosu, Oda and other towns neighbouring Akwatia are channelled through the Belgium Market but, because the production is not tracked, government officials were probably reluctant to mention this out of fear of attracting further criticism of their diamond-monitoring systems. As of August 2008, there were only six licensed small-scale diamond miners in the country outside of the GCD concession, of which only one was active: four were not working because of excessive flooding and a lack of water pumps, and the other had abandoned diamond mining temporarily in favour of other ventures. At the same time, there were – and still are – thousands of people engaged in illegal galamsey diamond-mining activity in these areas, working fairly viable deposits.

Thus, when Kimberley officials called upon the Ghanaian government to produce paperwork to account for its marked increases in diamond exports, challenging its officers to dispel rumours about the country harbouring and exporting Ivoirian product as its own, it must have been known to both parties that this would be a difficult, if not impossible, task. At the time, there were only records available for a handful of GCD tributors; there were no requirements to record transactions; and, most significantly, there was no information available on the countless numbers of galamsey working outside of the GCD concession who were supplying an undeterminable quantity of diamonds to the Belgium Market. But the government’s failure to maintain detailed records of diamond production – despite this being required of Kimberley signatories – is not entirely attributable to carelessness. First, it is important to note that the regulatory framework in place for small-scale diamond mining at the time was flawed. When moves were made in the late 1980s to fully legalize small-scale mining in Ghana, the Chief Inspectorate at the former Mines Department – the government agency then in charge of awarding a diamond-digging licence – insisted that the revised framework apply solely to gold, on the grounds that adequate laws and policies were already in place for diamond mining.36 Failure to mainstream regulations for the sector, however, caused numerous problems. Notably, there were significant delays on decisions for licences, and, often, the Mines Department found itself awarding a diamond-digging licence in areas where the Minerals Commission had also awarded a small-scale gold-mining licence, and vice versa. Eventually detecting the futility in having two separate regulatory frameworks, the government repealed all small-scale mining legislation and mainstreamed the sector’s regulation under the Minerals and Mining Act (2006).37 This process was ongoing at the time Kimberley officials demanded that the Ghanaian government produce detailed paperwork about diamond purchases and transactions.

Second, unlike small-scale gold mining, small-scale diamond mining is not viewed as a priority economic area in Ghana. Many interviewees explained that, because of this, the government has overlooked the needs of Akwatia, where many residents and former employees of GCD have been in extensive negotiations with the company over salary arrears dating as far back as 1999. The government’s prolonged neglect of small-scale diamond mining is evident in how it is managed: whilst heavily involved with the day-to-day activities in the small-scale gold mining sector, employing a network of licensed buyers to purchase gold from operators to ensure that produce stays in the country, the government has virtually ‘outsourced’ the management of small-scale diamond mining, with the main buying, registration, and recording duties now in the hands of Indian, Lebanese, and Sri Lankan entrepreneurs.38

It is unlikely, however, that extensive knowledge of these dynamics would have discouraged Kimberley officials, who were under considerable pressure at the time to address the shortcomings of the KPCS, from initiating a comprehensive review of Ghana’s diamond-mining sector. The plan to assess the Ghana situation and to determine the extent to which the country was harbouring and exporting Ivoirian ‘conflict diamonds’ was set in motion before the Plenary in Gaborone. In an effort to clear the country’s image, Ghanaian officials reluctantly agreed to cooperate with ‘international efforts to step up surveillance on the alleged sale of conflict diamonds mined in, and transported from, Ivory Coast’, assembling a ‘Kimberley Team’ comprised of three PMMC officers and other government officials.39 Under instructions from Kimberley officials, the team agreed to suspend all exports of rough diamonds from the country: between 25 November and 5 December, all diamonds purchased by licensed buying companies were held at PMMC headquarters in Accra. Experts from the World Diamond Council visited Ghana three times over the next three months (5–9 December 2006, 16–19 January 2007 and 16–18 February 2007) to conduct pre-shipment inspections of stored produce. Whilst officials waited for instructions from the Kimberley chair, exports of rough diamonds were once again suspended between 17 February 2007 and 7 March 2007, with all produce held by PMMC. Shipments resumed only after it was agreed that digital photos of diamonds were made by PMMC evaluators, and that advanced transmission of digitized diamond photos were sent to a working group of experts on the day of export. This began in March 2007, shortly after World Diamond Council officials confirmed that there was no visible evidence of diamonds being smuggled from Côte d’Ivoire into Ghana.

There is no denying that the ‘mini embargo’ has facilitated improvements in the monitoring of diamonds in Ghana, and has led to the implementation of a badly needed system of paperwork, which is essential for tracing diamonds to their source. But whilst the event has come and gone, seemingly forgotten by both Kimberley officials and the Ghanaian government, it has had a lasting impact in Akwatia. Already crippled by decades of neglect and shortages of funding, the town’s small-scale diamond miners have been subjected to even further economic pressures brought about by the ban. It initiated a chain of events that further diminished interest in, and depreciated the value of, the country’s diamonds, depriving small-scale diamond miners of viable sources of sponsorship, triggering the collapse of several local industries, and perpetuating poverty in the town.

Perspectives from Akwatia

Miners, buyers, and merchants interviewed in Akwatia all felt that the ‘mini embargo’ was unnecessary and that, even though it is over, it has had lasting effects. Most interviewees agreed that the ‘mini embargo’ has crippled the economy of Akwatia: as one buyer put it, the town is now a ‘shell of its former self’.40 The ban upset what was clearly a fragile diamond purchasing network – something which Kimberley officials, and the UN team before them, failed to take into account.

With its resource endowment and current levels of technology, Ghana is far from being a world-class diamond producer; its output is a fraction of that of its neighbours. What makes its diamond industry attractive to investors, however, is that it is highly liberalized, and the government plays a minimal role in the sector’s regulation and day-to-day activities. This has enabled foreign entrepreneurs – mainly Indians, Sri Lankans and Lebanese – to gain control of the sector. In return for this ‘freedom’ to operate, exporters and buyers are only required to make nominal taxation and registration payments to PMMC. But since the ban foreign interest in Ghanaian diamonds has waned, as evidenced by the decrease in the number of ‘white men' buying and selling diamonds in the Belgium Market.41 When the government announced that all diamonds would be held in storage and inspected at PMMC Diamond House in Accra, and failed to provide details about when exports would resume, many merchants fled the country and/or pursued interests elsewhere.42 Those in possession of stones at the time of the ban experienced difficulties obtaining market prices for their product. One buyer reflected on the situation in detail during an interview:

The price for diamonds, following that announcement, was immediately spoiled because buyers in Accra were not buying diamonds or, if they were doing so, it was at a low price. We were informed of the news over a megaphone. At the time, lots of people lost their money because the news of the embargo was sudden, and people were holding lots of diamonds and forced to sell at a low price. . . . Business is down 200 percent.43

During visits to Akwatia in 2007 and 2008, many buyers and miners were observed selling diamonds at low prices in the Belgium Market. Several interviewees who claimed to have been in possession of diamonds at the time of the announcement of the ban reported having incurred significant losses, and in many cases were forced to disentangle themselves from the industry entirely and pursue other jobs – including labouring in outlying diamondiferous areas, trading, and gold mining in adjacent localities.

The consensus in Akwatia is that between 80 and 90 percent of local buyers lost their money as a result of the ‘mini embargo’. One buyer reported losing over US$5000 because ‘no one wanted [his] diamonds’, and he was forced to settle for the depressed prices being offered at the Belgium Market.44 Another buyer who reported having absorbed a significant loss sold all of his diamonds and purchased a car, which he now uses as a taxi and his living quarters. Other buyers who, at one time, had sponsored mining activities now find it difficult to continue doing so because they simply do not have the money to purchase expensive diamonds. On one occasion, a miner working as a tributor on the GCD concession sought ¢150 (US$150) for two diamonds but had to approach four buyers in the Belgium Market before he was able to sell his produce.45

The recent decline in cash flow has crippled Akwatia. There are remnants of the town’s recent ‘boom periods’, times when residents no doubt enjoyed more luxurious lives: a small collection of retailers selling a range of imported brand-name clothing; numerous electronics shops offering everything from state-of-the-art DVD players to video cameras and televisions; the occasional BMW and Mercedes; and mobile phone retailers selling the latest Sagem, Nokia, and Samsung models. But unlike during the periods of peak trading experienced in the 1990s and early 2000s, when hundreds of merchants could be found at the ‘main junction’ buying and selling diamonds, today there are only 15–20 stalls. Whereas in the country’s prosperous artisanal gold mining towns, such as Noyem, Bibiani, and Damang, there are burgeoning markets, a wide availability of goods and reliable transportation links, Akwatia’s lorry station is virtually barren throughout the day, regular taxi runs in town are sporadic, and staple foods such as tomato sauce and canned fish are difficult to obtain. There are also very few street vendors selling local dishes such as kenkey, banku and jollof rice.46 Even the town’s main banana sellers and tilapia vendors, in the words of a buyer, have fled town because ‘there is now no market’.47

Akwatia has deteriorated economically since the ban. Its residents, who are fully aware of the KPCS, blame the United Nations, Kimberley officials, and experts from the World Diamond Council for the sharp decline in foreign interest in the region’s diamond-mining activities, and for causing irreversible damage to what was already a delicate situation. Miners claim that they no longer have the finances to purchase the heavy equipment needed to access high-quality diamonds buried deep in the ground; ‘local’ buyers can no longer purchase what little ‘salt money’ is extracted; and, with the town’s diminished capacity to purchase goods, ancillary industries such as food catering, transport, and hotels have collapsed outright.

Have the changes made in Ghana since the ban helped to reduce the probability of stones being smuggled from neighbouring Côte d’Ivoire? Kimberley officials believe they have. Since the ban, emphasis has been placed on raising awareness of ‘conflict diamonds’. Posters detailing the penalties of trafficking goods are now found throughout Akwatia and on the walls of PMMC Diamond House in Accra. PMMC officials have implemented educational programmes for their field officers, and security officers stationed at the relevant border towns – Dormaa-Ahenkro, Gonokrom, Kofi Badu Krom, Elubo, Bole, and Wa – have been made aware of the KPCS and ‘conflict diamonds’.48 A system of paperwork has also been instituted, which enables the tracking of a diamond to its source. Every buyer involved in the purchase of a diamond is now required to produce a receipt, each of which is issued by PMMC itself. Receipts are numbered, contain the buyer’s ID number, and provide details of the transaction (‘sum’, ‘received from’, ‘amount’, etc). The system is fairly transparent and is in line with KPCS directives; actors in the chain are subjected to frequent spot checks by PMMC officers and police.

The miners and buyers interviewed in Akwatia were critical not only of the ban itself but also of the logic behind some of the changes made by the government to satisfy Kimberley officials. Many residents of Akwatia believe that the measures implemented were simply ‘window dressing’ – that, today, Ghana is no less likely to harbour ‘conflict diamonds’ than before. During consultation with many government officials, it was indicated that there is no means of readily differentiating between Ivoirian and Akwatian diamonds, as only isotopic analysis can verify the source of the gems. Even buyers consulted at the Belgium Market, many of whom have been involved in the industry for over 10 years and no longer require equipment to value the diamonds they purchase, claimed that they could not identify an Ivoirian diamond if given the opportunity. Experts from the World Diamond Council faced the same challenge during their inspections and, despite their many random spot checks, found no evidence to suggest that diamonds in the Belgium Market were of Ivoirian origin. As one buyer put it, ‘I don’t know how could they have anyway’.49 With the source of diamonds practically unverifiable, there is no hard evidence available to confirm that smuggling is taking place.

A second point raised by individuals interviewed in Akwatia was that Ghana’s border with Côte d’Ivoire was not as porous as portrayed by Kimberley officials. Although security has been fortified at the relevant border towns, even before this it made little sense to smuggle diamonds into Ghana because of the difficulty in getting past border security and the numerous police barricades stationed between the border and Akwatia. It was explained that it would have made more sense for rebels in Côte d’Ivoire to have moved stones through Guinea, Burkina Faso, and Sierra Leone, where, at the time, borders were far more porous and there were established networks in place to facilitate rapid smuggling. Many of the miners and buyers consulted were also unsure about who was being accused of smuggling product from border towns and why, given the harsh penalties in place (potential imprisonment and seizure of product), anyone would be willing to take such a risk. Whilst there are numerous and virtually un-dissolvable shadow and criminal networks firmly entrenched in world-class diamond-producing countries such as Sierra Leone and the DRC – to facilitate the smuggling of ‘conflict stones’, often with significant backing from ‘outside groups’ – it is rather unlikely that the same facility persists in Ghana, given the comparatively small-scale, localized nature of the country’s industry and the poor quality of its stones, which mitigate against the emergence of similar networks. A small number of foreign businessmen, primarily Indian and Sri Lankan, remain scattered around Akwatia, but interviews with several local buyers confirmed that most are licensees who are normally based in Accra, hoping to get a ‘leg up’ on their competition by inspecting product closer to the source. As one local buyer explained in an interview, ‘why would we run the risk of smuggling diamonds with these penalties . . . we have suffered enough’.50

A final criticism voiced was over the decision to make the GCD concession – a relatively self-contained and heavily policed area – ‘the nucleus of the KPCS process’.51 Under instructions from the Kimberley Chair, GCD, PMMC and Minerals Commission officers were asked to register all small-scale miners working on the GCD concession; they spent most of August–September 2008 doing so. The exercise has received considerable praise from Kimberley officials. The impression conveyed is that the issuing of identification cards and miner registration will enable officials to monitor the flow of diamonds more closely. But, as one buyer pointed out, all GCD tributors were already registered at the time – a requirement for securing access to the GCD concession.52 Another buyer questioned whether experts were of the view that people were actually smuggling diamonds from Côte d’Ivoire, travelling a distance of over 200 km, bypassing the Belgium Market entirely, and running the risk of being caught by GCD security in order to ‘insert’ diamonds into the system at the source, for the purpose of concealment.53 As one government officer explained, there was a greater chance of conflict diamonds being inserted into production chains at the relatively un-policed galamsey camps south-west of Akwatia toward Oda, or of individuals bringing product direct from the border to a ‘blue card’ holder or licence holder in Accra54. The ubiquity of ‘salt money’ throughout the Belgium Market, however, is a sign that there is minimal, if any, smuggling taking place. As one buyer explained, the presence of a high-grade diamond ‘would cause a major stir with us and we would fear it very much after everything that has happened to this market’.55

The message resonating in Akwatia is clear: that the ‘mini embargo’ was unnecessary and has diminished confidence in Ghanaian diamonds. It has triggered the rise of what, in the eyes of many miners and buyers consulted in the town, are questionable initiatives aimed at preventing the harbouring of conflict stones. Whilst there is little disputing that, with the conflict raging at the time in neighbouring Côte d’Ivoire, a review of Ghana’s diamond industry was urgently needed, the way in which it was carried out certainly raises the question of whether the country was indeed the unfortunate scapegoat of a comprehensive policy response aimed at appeasing critics of the KPCS. Most importantly, the Akwatia experience highlights the need to pay careful attention to the local impacts of international actions.

Conclusions: critical reflections on a ‘Kimberley protest’

Whether a temporary ban on exports of Ghanaian diamonds was necessary is open to debate, but there is little disputing that it has had catastrophic economic impacts in Akwatia. More than two years after the ban was lifted, the town remains in a debilitated state, showing few signs of recovery. What was once a vibrant diamond-trading centre populated by hundreds of buyers, merchants, miners, and traders is now an economically depressed township. Investor confidence in Ghana’s small-scale diamond mining sector has diminished in response to accusations that the country may be harbouring ‘conflict stones’.

Kimberley officials, who continue to garner praise for their efforts in facilitating a suspension of diamond exports and an investigation which, in the end, uncovered no evidence to link Ghana with ‘conflict diamonds’ originating from Côte d’Ivoire, have overlooked the effects their intervention has had on the Akwatia township. Government officials are aware of the impacts, but with small-scale diamond mining a peripheral policy concern, it is unlikely that calls to support operators and the people of Akwatia will materialize as meaningful action.

Although Kimberley officials did not call upon the Ghanaian government to suspend exports of diamonds immediately, providing PMMC officials with the opportunity to present their case in Gaborone in November 2006, it appeared that a review was going to take place regardless of the evidence presented. The group of experts employed to take part appeared to have very little knowledge of the Ghana situation. Whilst it was pointed out in 2006, perhaps correctly, that Ghana’s ‘system of internal controls is inadequate and lax’, the identical system was in place when the country was approved for Kimberley membership in 2003.56 Reflecting on the impacts of the ban, many miners and buyers interviewed in Akwatia expressed concern over why Ghana was targeted and not countries such as Sierra Leone, Guinea, or the DRC – where diamond smuggling is arguably a far more pressing concern. Did Kimberley officials target Ghana because of the potential to make a more visible impact – and in the process, appease critics such as Amnesty International and Global Witness? With more localized diamond production, it is far easier to monitor and institute change in Ghana than, for example, the DRC, where borders are more porous, deposits are more diffuse, and criminal networks are potentially entrenched. What is surprising in the Ghana case was the lack of foresight shown: specifically, failure to anticipate how an export ban would affect local livelihoods in a country where diamond mining is already an ancillary industry.

One positive, albeit minor, change that has come about from the ‘mini embargo’ is the implementation of a system of paperwork. Buyers at every level are now required to produce receipts for their diamonds. The system appears to be working within the confines of the GCD concession itself: during interactions with several buyers in Akwatia and at the field level, scores of receipts were produced. It is fairly transparent, is in line with Kimberley directives, and its actors are subjected to frequent spot checks by PMMC and district police. But with the galamsey camps outside of the GCD concession burgeoning, the task of equipping all of the country’s diamond miners with identification cards promises to be challenging and lengthy. Even the Review Mission concluded that ‘producers in the informal mining sector – which account for roughly 75 percent of Ghana’s diamond production – remain unregistered and represent a significant gap in Ghana’s system of controls’.57

What the Ghana case does illustrate is how little is known about the dynamics of small-scale diamond production in sub-Saharan Africa. Impatience and/or preponderant focus on macro-level issues have led to far too many assumptions being made about diamond mining activities. Without careful analysis of local level concerns, and a detailed understanding of small-scale diamond mining and diamond markets in sub-Saharan Africa, Kimberley officials and NGOs will continue to struggle to address the shortcomings of the KPCS and allied interventions. As the case of Ghana illustrates, failure to do so also runs the risk of implementing a programme which has serious negative repercussions.

1
The Kimberley Process Certification Scheme (KPCS) is a joint government, civil society, and industry initiative aimed at stemming the flow of rough diamonds used to finance wars. The international review team sent to Ghana consisted of five people: a Sierra Leonean, a South African, a Canadian, a Belgian and an American.
2
‘Report of the Panel of Experts’ (submitted pursuant to paragraph 7 of Security Council Resolution 1584 (2005) concerning Côte d’Ivoire, S/2005/699, 7 November 2005).
3
‘Open Letter from NGOs to the Kimberley Process Chair’, <www.globalwitness.org/media_library_get.php/.../open_letter.doc> (19 July 2009).
4
The World Diamond Council was established in Antwerp in July 2000 to help prevent the exploitation of diamonds to finance war. It represents the diamond industry in the Kimberley Process.
5
The Kimberley Process Working Group on Monitoring (WGM) – referred to throughout this article as ‘Kimberley officials’ – oversees the implementation of the KPCS, assesses participants’ annual reports, and organizes review visits in participating countries.
6
The Precious Minerals and Marketing Corporation (PMMC) is a government-controlled unit that purchases gold from small-scale miners, and which oversees the management of diamond sales and exports.
7
Global Witness. ‘A rough trade: the role of companies and governments in the Angolan conflict’ (Global Witness report, London, 1998); J. Andrew Grant and Ian Taylor, ‘Global governance and conflict diamonds: the Kimberley Process and the quest for clean gems’, The Round Table93, 375 (2004), pp. 385–401.
8
Philippe Le Billon, ‘Fatal transactions: conflict diamonds and the (anti) terrorist consumer’, Antipode38, 4 (2007), pp. 778–801.
9
Ian Smillie, Lansana Gberie, and Ralph Hazleton, ‘The heart of the matter – Sierra Leone, diamonds and human security’ (Partnership Africa Canada report, Ottawa, 2000).
10
Carola Kantz, ‘The power of socialization: engaging the diamond industry in the Kimberley Process’, Business and Politics9, 3 (2007).
11
Partnership Africa Canada, ‘Killing Kimberley? Conflict diamonds and paper tigers’, (Partnership Africa Canada report, Ottawa, 2006).
12
Grant and Taylor, ‘Global governance and conflict diamonds’.
13
Tina M. Gooch, ‘Conflict diamonds or illicit diamonds: should the difference matter to the Kimberley Process Certification Scheme?’ Natural Resources Journal48, 1 (2008), pp. 189–214.
14
Global Witness, ‘Making it work: why the Kimberley Process must do more to stop conflict diamonds’ (Global Witness report, Washington, DC, 2005).
15
‘Report of the Panel of Experts’.
16
Global Witness, ‘Making it work’.
17
‘Kimberley Process Certification Scheme summary report of the review mission to the Republic of Ghana’, 23–30 March 2007 (KPCS, 2007).
18
Amnesty International, ‘Kimberley Process: an Amnesty International position paper’ (Amnesty International, 2006), <www.amnesty.org> (15 February 2009).
19
Interview, government official, Accra, 11 July 2008.
20
Ghana Chamber of Mines, ‘Ghana Chamber of Mines factoid 2006’, <http://ghanachamberofmines.org/internet/index.php> (31 January 2007).
21
Dino Mahtani, ‘Conflict diamonds “smuggled into Ghana”’, Financial Times, 6 October 2006, <http://www.ft.com/cms/s/0/ed72ead8-5559-11db-acba-0000779e2340.html> (5 December 2008).
22
Partnership Africa Canada, ‘Killing Kimberley?’
23
Monster and Critics News, ‘Blood diamond sales denied by Ghana’, 11 October 2006, <http://www.monstersandcritics.com/news/africa/news/article_1210487.php/Blood_diamond_sales_denied_by_Ghana> (9 January 2009).
24
Benjamin N. Aryee, ‘A historical overview of ASM in Ghana and the effectiveness of regulation and other interventions by government’ (paper presented at the ICMM Workshop on Artisanal Small-Scale Mining (ASM) and Mining Companies, 12–14 May 2009, Elmina, Ghana).
25
See Grant and Taylor, ‘Global governance and conflict diamonds’.
26
S. Mustapha, ‘“No blood diamonds” in Ghana’, The Statesman, 12 October 2006, <http://www.thestatesmanonline.com/pages/news_detail.php?section=1&newsid=927> (8 January 2009).
27
The Ghanaian government continues to look for outside investment to operate GCD, fully reopening its divestiture file in 1999. It immediately received a bid from Mard Gold but it soon emerged that this company was unable to pay the bidding price of US$17 million, and eventually rescinded the agreement. A subsequent bid of US$34 million was won by Sapper Mining Company but it, too, was unable to pay the bid price.
28
Although today Ghana is one of Africa’s ‘lesser’ diamond producers, this was not always the case. Diamonds were first discovered in the country in February 1919 by the geologists A. B. Kitson and R. O. Teale along the Birim River, approximately 19 miles north-west of Akwatia. Just over ten years later, national diamond output exceeded 1.5 million carats, which at the time ranked it as the world’s second-largest producer by volume and fourth by value.
29
Frank K. Nyame and Seth K. Danso, ‘Socioeconomic, environmental and policy implications of alluvial diamond mining in the Birim diamondiferous field, eastern Ghana’ in Gavin M. Hilson (ed.), Small-Scale Mining, Rural Subsistence and Poverty in West Africa (Practical Action Publishing, Rugby, 2006), pp. 219–26.
30
A local label given to illegal small-scale miners, the literal translation of which is ‘gather them and sell’.
31
Nyame and Danso, ‘Socioeconomic, environmental and policy implications’, p. 222.
32
Applicants are required to locate a plot of land and complete an application. The GCD Survey Department then carries out inspections. If the plot meets the necessary criteria, the application is forwarded to the GCD Tributor Committee, which makes a decision on the basis of the plot’s proximity to plant machinery, roads and the GCD ‘reserve’. If approved, the tributor is required to pay compensation – an amount determined by GCD – to the landowner, and must purchase ‘tokens’ for ID cards, priced at one Ghana cedi each, for every employee; failure to produce an ID card upon spot inspection could result in immediate arrest.
33
Interview, GCD managing director, Akwatia, 4 August 2008. It was explained that land was given outside of GCD’s ‘reserve’, an area containing proven reserves of diamonds.
34
These groups vary in size: generally, those working tailings number between five and 30, whilst those mining along the Birim River in areas deemed ‘inaccessible’ by the company number 90–250.
35
Interview, artisanal diamond buyer, Akwatia, 5 August 2008.
36
In addition to the law for a diamond-digging licence having been in place since the 1970s, diamond marketing was a well-established agency at the time, receiving considerable attention from the government over the years. The Diamond Marketing Board was established in 1963 following implementation of Legislative Instrument 401, and empowered with the responsibility of marketing all diamonds in Ghana. Recognizing the need to actively promote diamond production and marketing, the government passed, in 1972, the Diamonds Decree (NRCD 32), a move that transformed the Diamond Marketing Board into the Diamond Marketing Corporation. The organization was given expanded responsibilities for controlling and promoting the country’s diamond industry, as well as the marketing of its product.
37
The Minerals Commission is the national policy-making and licensing body for the mining sector. Following the passing of the Minerals and Mining Act (2006), the Mines Department became the Inspectorate Division of the Minerals Commission.
38
The numerous indigenous ‘local buyers’, who, for a fee of ¢5 per annum, are issued a ‘green’ licence by PMMC, are responsible for getting product to the Belgium Market. These licences authorize an individual to buy and sell product in the Belgium Market. The market licence, also issued by PMMC, is blue and costs ¢200 annually; it entitles an individual to buy diamonds from ‘local buyers’, and to sell their product to, and transact business at Diamond House in Accra with licensed buying companies. These companies are issued permits by PMMC in Accra, are authorized to buy diamonds from people in possession of a blue licence, and have a licence to export [Gavin Hilson, ‘Mining and rural development: the trajectory of diamond production in Ghana’ in Koen Vlassenroot and Steven van Bockstael (eds), Artisanal Diamond Mining: Perspectives and challenges (Academia Press, Gent, 2008), pp. 190–208].
39
‘Ghana sanctions Kimberley Process scrutiny of its diamonds’, <http://www.voanews.com/english/archive/2006-11/2006-11-15-voa6.cfm?CFID=94419776&CFTOKEN=87490521&jsessionid=88303aebc7445c3ffb62457152b684271662> (10 January 2009).
40
Interview, diamond buyer, Akwatia, 8 July 2008.
41
Local label given to the host of Sri Lankan, Lebanese, Indian, and European diamond traders in possession of a ‘blue licence’, or who patrol the market on behalf of the licensed buying companies they work for. In Akwatia, all foreigners are referred to as ‘white men’.
42
Interviews, diamond buyers, Akwatia, 6 July 2008 and 7 July 2008.
43
Interview, diamond buyer, Akwatia, 5 June 2008.
44
Interview, diamond buyer, Akwatia 6 June 2008.
45
Interview, diamond miner, Akwatia, 6 August 2008.
46
Kenkey is a ball of fermented maize dough wrapped in a banana leaf and served with stew or soup. Unlike kenkey, banku, which is also made from maize dough, is cooked, typically boiled in a pot and served with okra stew. Both are staple dishes in southern Ghana. Jollof rice is prepared with rice, tomatoes, spices (ginger and pepper) and onions, and variations of it are consumed across West Africa.
47
Interview, diamond miner, Akwatia, 3 August 2008.
48
‘Kimberley Process Certification Scheme summary report’.
49
Interview, diamond buyer, Akwatia, 4 May 2008.
50
Interview, diamond buyer, Akwatia, 5 July 2008.
51
Interview, GCD manager, Akwatia, 8 July 2008.
52
Interview, diamond buyer, GCD concession, Akwatia, 11 April 2008.
53
Interview, diamond buyer, Akwatia, 12 April 2008.
54
Interview, government official, Accra, 1 April 2008.
55
Interview, diamond buyer, Akwatia, 14 April 2008.
56
‘Kimberley Process Certification Scheme summary report’.
57
‘Kimberley Process Certification Scheme summary report’.

Author notes

*
Gavin Hilson (g.m.hilson@reading.ac.uk) is Lecturer in Environment and Development, and Martin J. Clifford (m.j.clifford@reading.ac.uk) is a doctoral candidate, both at the School of Agriculture, Policy and Development, University of Reading. The authors would like to thank the editors and two anonymous reviewers for their comments on previous drafts. Financial support for this research was provided by the British Academy under the project, ‘Livelihoods in transition: a critical appraisal of re-agrarianization in Ghanaian artisanal mining communities’ (SG-48412), and the Egmont Institute (Belgium) under the ‘Artisanal Diamond Mining Project’.

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