Zimbabwe to start diamond exports despite Kimberley Process deadlock

Published by MAC on 2010-07-04
Source: Statement, Reuters, Herald (Zimbabwe) & others

Diamond meeting ends without consensus on Zimbabwe

Serious challenges ahead for landmark certification scheme, say NGOs

Partnership Africa Statement

26 June 2010

The lack of consensus among Kimberley Process (KP) certification scheme members over whether Zimbabwe can resume diamond exports from the troubled Ma range area was welcomed by the KP civil society coalition today as the 'least bad' outcome. The scheme's annual meeting in Tel Aviv broke up without agreement after through-the-night talks.

The Marange diamond fields have been plagued with violence over recent years. A joint work plan was agreed last year between the Kimberley Process and the Zimbabwean government, which aimed at bringing Zimbabwe back into line with the scheme's minimum requirements. Almost no progress has been made on key aspects of this plan, including smuggling and demilitarisation of the diamond fields. Despite this, a number of governments supported a resumption of exports at this week's meeting.

"There are no winners with this result. But by maintaining a ban on exports in the absence of significant improvements in Marange, the Kimberley Process has taken an important step towards restoring its battered credibility," said Elly Harrowell from Global Witness. "If Zimbabwe follows through on its threat to export diamonds from Marange regardless of the lack of consensus, members, including the diamond industry, will need to think hard about how they will respond and what action they can take to stop these diamonds from contaminating the international trade."

Zimbabwean authorities have demonstrated a worrying lack of respect for the three-way partnership at the heart of the Kimberley Process. Zimbabwean Minister of Mines Obert Mpofu, present at the Tel Aviv meeting, openly denigrated the role of civil society organisations in the process. The collaboration between governments, industry and civil society has underpinned the success of the KP since its inception in 2003.

Shortly before the meeting in Tel Aviv, a prominent human rights activist, Farai Maguwu, was arrested and detained by the Zimbabwean authorities. As director of the Centre for Research and Development in eastern Zimbabwe, he had been researching and exposing state-sponsored violence and military involvement in mining and smuggling in the fields. Mr Maguwu remains in detention. "We continue to be troubled by the Zimbabwean authorities' aggressive attitude towards human rights campaigners and its disregard for the rules of the Kimberley Process. We would welcome the opportunity to work with Zimbabwe in the collaborative spirit of the scheme, to address challenges in the country's diamond sector," said Alan Martin from Partnership Africa Canada.

The coalition is calling on the Zimbabwean authorities to work constructively and openly with all members of the Kimberley Process to bring the Marange diamond fields into compliance with the minimum requirements. They also repeat their call for the immediate and unconditional release of human rights activist Farai Maguwu. The debate around Zimbabwe eclipsed a number of positive initiatives in Tel Aviv this week, including a w orkshop on future improvements to the Kimberley Process, and an enforcement seminar bringing together customs and police representatives from around the world to discuss stronger implementation of the scheme.

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Contact:
Elly Harrowell (Global Witness)
on +44 7703 108 401 or
Annie Dunnebacke (Global Witness)
on +44 7912 517 127
Alan Martin (Partnership Africa Canada)
on +1 613 983 6817

Notes:

1. The Kimberley Process is a rough diamond certification scheme, established in 2003. It brings together governments, industry and civil society, and aims to eradicate the trade in conflict diamonds. Member states are required to pass national legislation and set up an import/export control system. Over 75 of the world's diamond producing, trading and manufacturing countries participate in the scheme.

2. The Kimberley Pro cess Civil Society Coalition includes:
Green Advocates (Liberia),
CECIDE (Guinea),
COOPERGADI and COOPERGAC (Brazil),
CLONG (Republic of Congo),
CENADEP, GAERN (Democratic Republic of Congo),
Fatal Transactions, GRPIE (Côte d'Ivoire),
the Network Movement for Justice and Development (Sierra Leone),
Centre for Research and Development (Zimbabwe),
Partnership Africa Canada (PAC) and
Global Witness (GW).

*Partnership Africa Canada been involved in efforts to halt the trade in conflict diamonds since 1999. Other reports on conflict diamonds can be found at: www.pacweb.org

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Zimbabwe to start selling diamond stocks immediately

Zimbabwe's minister of mines and mining development said it will immediately begin exporting Marange field stock piles; Kimberley Process yet to reach consensus

By Tova Cohen

Reuters

24 June 2010

TEL AVIV - Zimbabwe plans to begin selling diamond stockpiles from its Marange fields immediately, whether this week's meeting of regulators of the trade gives the go ahead or not, the country's mining minister said.

Civil society groups have urged the Kimberley Process (KP) certification scheme to suspend ties with Zimbabwe because of human rights abuses in its Marange fields.

"I would like to take this opportunity to advise that Zimbabwe will be immediately exporting its diamond stockpiles because we are KP compliant and we need the money to drive the economy forward," Minister of Mines and Mining Development Obert Moses Mpofu told a meeting on Wednesday of some 70 members of the Kimberley Process.

"We have invited the KP monitor to continue discharging his mandate under the supervised export arrangement."

The minister spoke at a sesssion closed to the media, but he provided Reuters with a copy of his speech.

He later told Reuters: "I am going to sell the diamonds."

While the meeting was due to end on Wednesday evening, Boaz Hirsch, the 2010 KP chairman, said delegates have not been able to reach a consensus on Zimbabwe and were continuing to meet.

"There has been quite a lively discussion with a whole spectrum of opinions expressed," he told reporters.

Mpofu voiced concern that some were using the process to keep Zimbabwe's diamonds out of the market.

"Zimbabwe will be contributing more than 30 percent of the diamonds produced in the world," he said. "We shall be selling with certificates issued by ourselves and in this regard the KP monitor will be free to supervise the exports."

The Kimberley Process, a certification scheme set up to monitor diamond trade, angered human rights groups and diamond traders this month when a monitor it appointed to assess the mining operations at Marange said Zimbabwe had met the minimum conditions set by the regulator and could start gem exports.

U.S., EU Concerned

A source present at the closed meetings said most African countries, excluding West African countries, as well as India and Russia supported the monitor's report while the United States, Australia and the European Union reiterated concerns that Zimbabwe had not met the minium requirements of the KP.

Rights groups allege serious abuses by security forces deployed by the Zimbabwean government to stop illegal diamond digging after up to 30,000 panners descended on the poorly secured fields in 2006.

In a report KP monitor Abbey Chikane voiced concern over the presence of the army in Marange, but warned against their rapid removal, saying this could trigger illegal digging.

Human Rights Watch (HRW) said Zimbabwean security forces this month raided the offices of a leading civil society organisation and arrested its leader, Farai Maguwu, two days after he met Chikane to discuss the continued presence of Zimbabwean soldiers in Marange.

Maguwu handed himself to the Zimbabwean police after members of his family were beaten and detained, HRW said.

"We think that the exportation of Marange diamonds even in a limited capacity would make the flow of blood diamonds out of Zimbabwe even easier than it already is," Tiseke Kasambala, a senior researcher of the Africa division at HRW, said.

"The current situation is a test of the Kimberley Process's commitment to ending the trade in blood diamonds in Zimbabwe."

The Zimbabwean government agreed to a process of assessment by the Kimberley Process following reports of atrocities in Marange four years ago. Rights groups say soldiers in Marange are still engaging in forced labour, torture and harassment.

The KP's meeting in Tel Aviv will be followed by a higher level meeting in November in Jerusalem.

(Editing by Philippa Fletcher)

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Battlelines drawn for Kimberley Process meeting

The meeting in Tel Aviv which started Monday is focusing much of its attention on the Marange diamond fields of Zimbabwe

By Shivom Seth

Reuters

22 June 2010

MUMBAI - The stage has been set. Blood diamonds from Zimbabwe and rights abuses are set to feature in the Kimberley Process meeting, scheduled to be held in Tel Aviv from June 21-23. Human rights activisst too have ratcheted up the tempo for Zimbabwe's Marange diamond fields, that stretch over 66,000 hectares in the east of the country.

United States secretary of state Hillary Clinton has termed Zimbabwe a "very difficult challenge'' for the Obama administration. "We are trying to walk a line between supporting the people, keeping the pressure on the Mugabe leadership, working with South Africa to try to get that message across,'' Clinton told a diplomacy briefing gathering conference on sub-Saharan Africa in Washington recently.

Earlier, a Zimbabwe paper loyal to Zimbabwe's ruling party, had accused the USA of curtailing the international sales of Zimbabwean diamonds, terming it a "well-orchestrated Western-led campaign'' against the regime of President Robert Mugabe.

Even as a worried United States has said that it will continue to exert pressure on President Robert Mugabe for personally profiting from the country's minerals at the expense of the poor majority, chairman of the Rapaport Group Martin Rapaport has on Sunday, reportedly initiated a 3-day fast outside the office of the scheduled Kimberley Process meet.

What is interesting is that rights groups too have jumped on the bandwagon, alleging that the gems are being used to finance marauding guerrilla armies. Many have asked that the Kimberley Process suspend Zimbabwe and bar the country's gem exports.

Last week, the Global Witness published a report that detailed the murderous trade in Zimbabwe's diamonds and showed how it had undermined the Process's credibility. The human rights organization, that has helped conceive the Kimberley Process, called for Zimbabwe to be suspended from the group.

"Thanks to the impunity and violence in Zimbabwe, blood diamonds are back on the international market,'' Elly Harrowell, a Global Witness activist has been quoted as saying.

Another rights group, Human Rights Watch, reported that government soldiers had massacred over 200 people last year, in a fight to control the diamond fields.

The World Diamond Council too pulled no punches and said that it would call for the removal of Zimbabwe from the Kimberley Process, unless it controlled the supply of diamonds from its Marange field.

Zimbabwe was given a 1-year deadline to guarantee compliance with the Kimberley Process in September 2009, and was given until June to end human rights abuses in the eastern Marange diamond fields.

Non government organizations have been targeting the Kimberly Process monitor for Zimbabwe, Abbey Chikane of South Africa, arguing and alleging that the report he has prepared on Zimbabwe is a whitewash of continuing abuses.

The Kimberley Process, an industry-wide effort to prevent commerce in rough diamonds by insurgent groups, was created to prevent the sale of 'blood diamonds' on world markets. Kimberley investigators have documented forced labour, beatings and other abuses by the military against civilians in Marange, which was taken from African Consolidated Resources and handed to the state-owned Zimbabwe Mining Development in December 2006.

Although estimates of the reserves in this area vary wildly, some have gone so far as to suggest that it could be home to one of the world's richest diamond deposits.

With Zimbabwe's government stating that it would lift its ban on diamond exports, the country is getting ready to trade more than 4 million carats that could fetch upward of $1.7 billion.

Incidentally, Rio Tinto plc, which has a 78% interest in the Murowa diamond mine, with the remaining 22% owned by Riozim Limited, an independent Zimbabwean-owned and listed company which was spun off from Rio Tinto in 2004, has begun work on a $300 million expansion programme to raise output six-fold. Rio Tinto has also said it was discussing with the government ways to improve the investment climate in mining.

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Chamber of Mines expresses commitment to transparency-Zimbabwe

By Sifelani Tsiko

The Herald (Zimbabwe)

15 June 2010

The Chamber of Mines has endorsed the Extractive Industry Transparency Initiative established to encourage and assist countries rich in natural resources to report all payments being made by extractive companies to the Government, as well as all payments the Government has received from these companies.

Chamber of Mines chief executive Dr Chris Hokonya told participants at a civil society dialogue meeting on promoting transparency and accountability in the extractive sector that improved transparency and accountability in the extractive industries.

These were essential elements for underpinning economic development, poverty reduction, and for political stability in resource rich countries.

"We are happy about the EITI and we would like the Government to support this initiative," he said.

"Transparency is critical. We don't know whether the Government will support EITI but the mining sector is willing to initiate a voluntary reporting system."

The dialogue was organised by the Zimbabwe Environmental Law Association.

It sought to provide a platform for civil society organisations to share information and discuss strategies on how best Government, mining companies and civil society can work together to promote transparency and accountability in the mining sector for national economic development.

Worldwide, Dr Hokonya said, countries were adopting EITI principles and internationally recognised reporting standards, coupled with good governance policies to strengthen their capacity to ensure an effective use of national resources and improve economic efficiency and growth as well as enhancing investor confidence.

Launched in Johannesburg at the World Summit for Sustainable Development (WSSD) in 2002, the Extractive Industries Transparency Initiative is a multilateral, multi-stakeholder programme that seeks to improve the governance of the extractive sector globally.

It seeks to do this principally through the joint publication of the payments made by companies to countries and the concomitant publication of the receipts received by the respective country fiscus.

To date, some 30 countries have signed up as implementing countries to the EITI. Of the 30 implementing countries, 21 are African.

The first EITI compliant country was Azerbaijan, which was accepted as fully compliant in February 2009.

Zimbabwe has not yet joined the EITI, nor has the Government indicated an inclination or intention to do so.

"The EITI process is a useful tool in augmenting the Government's efforts to improve existing structures on accountability and transparency.

"Successfully introducing the EITI process in Zimbabwe is critical to curbing corruption and unsustainable environmental practices," said Mr Mutuso Dhliwayo, the director for ZELA.

"Zimbabwe should join the Extractive Industries Transparency Initiative which other countries are joining to ensure that revenue generated from mineral resources is known by the public.

"This is done by making mining contracts public and making mining companies accountable. The initiative seeks to promote accountability and transparency in the exploitation of natural resources."

Mr Dhliwayo said revenues from the extractive industries should be an important source of economic growth and social development in the country.

Over the years, lack of transparency in the management of natural resources in some countries had often led to conflict, corruption and poverty. The EITI seeks to address some of these challenges.

Proponents of the EITI argue that the initiative provides a number of benefits to various stakeholders.

For example, they say, for governments engaged in the EITI process, it improves international credibility and emphasizes the governments' commitment to the fight against corruption.

For the private sector, they further argue, a commitment to the principles of EITI signifies a commitment to good governance and transparency which in turn creates an improved investment climate.

"We need to report on how much royalties we pay to the Government. It is also important on the other hand for the Government to show how mining royalties are spent," said Dr Hokonya.

"But is this happening? We don't know, no one has taken interest in how these monies are spent.

"The mining sector is willing to support this initiative as it is now a standard worldwide."

Multilateral funding institutions in Africa and abroad are working to mainstream EITI principles in most countries on the continent.

The institutions are encouraging African countries to take part in the EITI process through technical and financial assistance to help bring about sound extractive industry practices and the utilization of natural resources for sustainable development.

To date, three countries namely Central Africa Republic, Liberia and Madagascar have achieved EITI candidacy status in Africa.

Liberia is the first African country and the second country in the world to be designated as EITI compliant, setting an exemplary benchmark to other African countries.

Zimbabwe is rich with natural resources that include gold, diamonds, coal, gas, platinum, chrome and many others.

If utilised judiciously, economic analysts say, the revenue generated can contribute directly or indirectly to reducing poverty and improving employment opportunities in the country.

They further say that well managed extractive industries can reduce conflict and promote peace, a critical ingredient for economic development and job creation.

The workshop, which was designed to provide a forum for discussing EITIs, attracted participants from the mining sector, government, Parliament, the Chamber of Mines of Zimbabwe, business leadership, think tanks and civil society.

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Minerals exploitation not benefiting immediate communities - ZELA

Bertha Shoko

The Standard (Zimbabwe)

12 June 2010

Zimbabweans are not deriving any benefits from the country's rich mineral resources because of a lack of transparency in the sector, civil society organisations warned last week. The warnings made at a meeting organised by the Zimbabwe Environmental Law Association (ZELA) to discuss challenges and opportunities in the mining sector came amid heightened concerns over the way government is exploiting rough diamonds in the Chiadzwa area. A Kimberley Process appointed monitor, Abbey Chikane last week recommended that Zimbabwe must be allowed to sell diamonds mined from Chiadzwa on the international market despite concerns about continuing human rights violations.

Activists also argue that there was no transparency in the allocation of mining claims to two South African companies partnering the Zimbabwe Mining Development Corporation. Shamiso Mtisi, an environmental lawyer said lack of transparency in both government and mining companies, which has been going on for years had provided a breeding ground for corruption. "If you look at the mining sector you will see that there is a lot of s ecrecy," Mtisi said. "Awarding of mining contracts is not done openly and this doesn't provide an opportunity for members of the public to debate contracts signed by the mining companies and government, revenue generated by these companies and revenue they pay out to government.

"So this is an issue of concern for us as civil society." "If you look at the contracts signed by government and mining companies they actually generate more income for private companies rather than the country and we are saying as civil society it's time for these issues to be raised and the culture of secrecy to go. Zimbabwe must derive more benefits from its minerals," he said. ZELA executive director, Mutuso Dhliwayo, said increased accountability in the mining sector could also benefit government. "When we are talking about all this we are not attacking government or blaming it for anything but we are calling for checks and balances that may also in the end benefit government itself at t he end of the day," he said.

Dhliwayo said transparency in the mining sector was also important to ensure that communities benefit from mining operations in their areas. "ZELA firmly believes that communities should be able to benefit from the natural resources that are found within their areas and they have a right to a clean and healthy environment that is not polluted and degraded. "All this is provided for under the Environmental Management Act because environmental rights are human rights," he said. Chris Hokonya, the Zimbabwe Chamber of Mines CEO, said his organisation was pushing for the setting up of an environment rehabilitation fund that will be used to rehabilitate former mining areas. The civil society groups also resolved to closely monitor mining operations in the country to promote transparency and fight corruption.

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The 'Blood Diamond' Resurfaces

By Michael Allen

Wall St Journal

19 June 2010

CAFUNFO, Angola-On paper, Angola is a poster child for the global effort to keep "blood diamonds" out of the world's jewelry stores.

International pressure helped end a vicious civil war a decade ago by strangling the ability of rebels to trade diamonds for weapons. Angola is now a leading member of the so-called Kimberley Process, an industry-wide effort to prevent commerce in rough diamonds by insurgent groups. Today, Angola is the world's fifth-largest diamond producer by value, and its gems are coveted for their size and purity.

But a visit to Angola's diamond heartland reveals that plenty of blood still spills over those precious stones. Here in the sprawling jungle of northeast Angola, a violent economy prevails in which thousands of peasant miners eke out a living searching for diamonds with shovels and sieves. Because they lack government permits, miners and their families say they are routinely beaten and shaken down for bribes by soldiers and private security guards-and, in extreme cases, killed.

At an illegal mine near Angola's border with Congo, about 500 young miners, known in Portuguese as garimpeiros, have been digging deep into the earth for more than a year.

This sort of violence, which has made headlines in nearby Zimbabwe, is threatening to tear the Kimberley Process apart. Diamond retailers can ill afford more bad publicity about tainted stones. But many of Africa's diamond-producing nations are wary about any effort to beef up the industry's policing of human rights.

Around Angola's mines, tales of confrontation abound. In an interview with The Wall Street Journal, Linda Moisés da Rosa, 55 years old, denounced the killings of her two sons, both diamond miners. In September, she said, Angolan soldiers descended on a large mine near here to chase away diggers. When some refused to leave, she said, the soldiers caved in the mine, burying alive around 45 men, including her son Pereira Eduardo Antonio, 21. "These kids were stubborn," she said, adding that the soldiers said that the killings "should serve as a lesson to anyone who wants to come dig here again."

In February, she said, her oldest son, 33-year-old Tito Eduardo, the family's sole breadwinner, got into a dispute with private security guards at another mining site. She said the guards had agreed to let local diggers sift gravel for diamonds in exchange for around $30 a day. They accused her son of failing to pay the bribe, and when he argued back, she said, "they killed him with a machete."

Military officials didn't respond to requests for comment. Angola's secretary of state for human rights, António Bento Bembe, blames his nation's long civil war for creating a climate of abuse. "I know lots of these cases happen, and I know of many other cases you haven't heard of yet," he said in an interview in Luanda, Angola's capital. "It is urgent to cultivate a culture of human rights."

The issue has plunged the Kimberley Process into the worst crisis in its brief history. Born at a time of great bloodshed on the African continent, the 75-nation Kimberley Process was initially lauded for its commitment to human rights. Rebel movements had seized control of diamond regions in Angola, Sierra Leone and the Democratic Republic of Congo and used the gems to finance marauding guerrilla armies. Facing a public-relations nightmare, world diamond companies agreed to buy rough stones only if they are certified by internationally recognized governments. The Kimberley Process says well over 99% of the world's rough-diamond trade is now "conflict-free."

But critics say there's a big loophole in that definition: It doesn't take into account human-rights abuses in diamond territory controlled by governments themselves. "The Kimberley Process cut the financial lifeline of rebels, but at the same time it gave legitimacy to corrupt governments that abuse their own people," says Rafael Marques, a human-rights activist who has worked extensively in northeastern Angola.

Much of the recent controversy is focused on Zimbabwe, where the group Human Rights Watch last year reported that government soldiers massacred over 200 people in a fight to control diamond fields in the east of the country, raped local women and press-ganged peasants into mining work. The Kimberley Process temporarily suspended exports from the area on the grounds that the turmoil was allowing undocumented stones to be smuggled into the world market. Last month, a monitor installed by the Kimberley Process recommended that the ban be lifted, kicking off a fierce debate. A Kimberley Process committee has been deliberating the recommendation and the issue will be taken up in a meeting of the entire group in Tel Aviv starting Monday.

Global Witness, a human-rights organization that helped conceive the Kimberley Process, called for Zimbabwe to be suspended from the group. "Thanks to the impunity and violence in Zimbabwe, blood diamonds are back on the international market," said Elly Harrowell, a Global Witness activist.

Jewelers are starting to worry that the bad publicity could spook consumers. Matthew Runci, chief executive of Jewelers of America, a trade group which represents jewelry chains from Tiffany & Co. to Zale Corp., says the Kimberley Process should either figure out a way to incorporate human-rights monitoring into its oversight of member countries or invite an outside organization to do it for them. "It's essential that the public's confidence in diamonds be maintained at a high level," he says. Once a diamond has been cut and polished, it's virtually impossible for the consumer to tell its country of origin.

Cecilia Gardner, a former New York federal prosecutor who serves as the general counsel of the World Diamond Council, says the Kimberley Process is a voluntary organization and isn't equipped to enforce human-rights compliance. "We don't have an army, we don't have a police force," she says.

In Angola, which far overshadows Zimbabwe in importance to the jewelry market, the Kimberley Process appears to have little appetite for human-rights issues. Last August, when a Kimberley Process peer-review team arrived to check the country's compliance procedures, Angolan forces were just mopping up a major operation to expel some 30,000 illegal Congolese miners from Angolan territory near here. According to a U.S. State Department report citing local media and nongovernmental organizations, military and police "arbitrarily beat and raped detainees" and forced them to march to the border without food or water. The government has denied committing abuses and says the army was merely securing the nation's borders.

A confidential Kimberley Process report on the review visit makes no mention of alleged human-rights abuses, although it criticizes Angola for failing to present a plan to better document the output of peasant mining. The group spent just two days in Lunda Norte, an area near the Congo border that has become a flashpoint for clashes between diggers and security forces. According to a draft of the internal report, the delegation intended to visit the site of a large illegal mining operation but was thwarted by "a last-minute decision to participate in a graduation ceremony for new border patrol security officers." As the team was preparing to depart, the chairman of the Kimberley Process at the time, Namibian politician Bernhard Esau, pronounced the visit a success and brushed off questions about alleged abuses of peasant miners. "The Kimberley Process is not a human-rights organization," he told reporters.

The roots of Angola's current blood-diamond problems have much to do with geology. Unlike in Botswana and South Africa, where multinational corporations use heavy machinery to extract diamonds out of deep shafts, much of Angola's diamond reserves are alluvial, meaning the stones have been washed out of the earth and scattered across the countryside. They're available to anyone with a shovel and wood-framed sieve, and are difficult for mining companies to secure. More than a million people world-wide earn a living from artisanal mining in alluvial fields, including tens of thousands in Angola alone.

Angola's artisanal miners, known in Portuguese as garimpeiros, played a pivotal role in the country's civil war, which lasted for 27 years and left at least a half-million people dead. U.S.-backed troops of the Union for the Total Independence of Angola, or UNITA, fighting to depose a Soviet-supported socialist government, controlled much of the country's diamond territory. To fund their war effort, they enlisted peasant diggers from here as well as neighboring Zaire, now known as the Democratic Republic of the Congo.

While UNITA forces committed plenty of atrocities, some people here in Cafunfo say they generally treated garimpeiros fairly. They allowed diggers to keep a percentage of the diamonds they found and established an immigration policy to bring in Congolese workers on 30-day permits, says Enoque Jeremias, a local human-rights investigator. "It was a fair system," he adds.

The war's end led to a surge in diamond production, as large mining companies dusted off old claims and launched new operations. Among the players are Odebrecht SA of Brazil, Russia's state-owned Alrosa; and a company controlled by Israeli diamond magnate Lev Leviev, all of which operate in joint ventures with the government diamond company Endiama.

But the garimpeiros were hardly prepared to put away their shovels. There's little agriculture here and almost no jobs outside of the mining sector. Plus, vast parts of the countryside haven't even been explored yet, much less mined. The peasants proved adept at finding diamond deposits that the big companies missed, and this so-called informal production continued to account for more than one-quarter of the country's diamond exports, according to the Partnership Africa Canada, an Ottawa-based nongovernmental agency that deals with mining issues.

To soak up those diamonds, Angola authorized foreign-run buying operations to be established in the bush. U.S. diamond giant Lazare Kaplan International Inc. became a fixture in the area, signing a technical agreement with the government to set up buying houses. Lazare Kaplan says it let the agreement expire in 2008, when world diamond prices collapsed, and is now winding down operations in Angola. Lazare Kaplan Chairman Maurice Tempelsman, the late-life companion of Jacqueline Kennedy Onassis, says the company was trying to bring development to the area and help strengthen Angola's Kimberley Process controls. "I am strongly committed to the protection of human rights," Mr. Tempelsman says, adding: "I believe in this imperfect world, involvement in trying to bring about constructive change is the best course."

Lazare Kaplan's withdrawal has left a wide-open field for other buyers, including a company controlled by Israel's Mr. Leviev, as well as a flood of newcomers from West Africa and the Middle East. Their storefronts line the muddy streets of Cafunfo, trying to outdo each other with mirror-signed bling.

For Ahmad Mouein, a Lebanese buyer who bills himself as "Boss Mouein," it's a great business opportunity despite the recession in the diamond market. "Sometimes a digger here can sell you a $500,000 stone for $5,000, $10,000," he marvels. He says the Kimberley Process hasn't succeeded in its primary mission of halting smuggling. "Kimberley or not Kimberley, my friend, for the diamond, you can do what you want."

By many accounts, the presence of these buying houses has only fanned the violence by encouraging more peasants to get into the mining business at the same time that government security forces have been tasked with stopping them.

At one such illegal mine, an hour's motorcycle ride over trails outside of Cafunfo, a Dantesque scene unfolds. Perhaps 500 young men are clambering over a vast pit dug deep into the red earth. They've been at it for a year now, and figure they have months to go until they hit a vein of gravel they believe will contain diamonds. Their tools are rudimentary-pikes and shovels-and the work is backbreaking, alleviated only by the homegrown marijuana many smoke and the small sachets of alcohol that can be had everywhere for a dollar.

They live on the site in homemade tents and work in shifts. To support themselves, they say, they make agreements with buyers, especially the West Africans, to split the take.

Caxaculo Milonga, 44, says he's on the hook with a man he knows as Boss Ibrahim from Senegal. Although Boss Ibrahim paid medical expenses when a run-in with police and soldiers sent him to the hospital, Mr. Milonga complains that the deal is unfair because he has to give Boss Ibrahim 50% of all production, then sell the rest to him at a rock-bottom price. "We work like slaves and they're cheating us," he says. "You can't argue or he'll call the police." Another garimpeiro says his sponsor at one time was a police investigator in Cafunfo, making any negotiation pointless.

Concerns about security forces are never far away. Last year, as part of the latest effort to expel Congolese diggers, the Angolan army moved into the area in force. In recent months patrols have paid a visit to the mine, harassing miners and slapping them with the flat side of their machetes, the miners say. The diggers worry that the army is just waiting until they hit gravel so they can move in and take the diamonds for themselves.

Near another illegal mining site, peasants described a similar scenario. In December, an army patrol swept through the village of Bundo in search of mining tools, says Cazanguia Andre, the 60-year-old deputy chief of the village. He says he ran into them on the way back from tilling his field, and they accused him of being a garimpeiro. They then hit him twice in the head with a rifle butt and struck him with a pole, he adds, breaking his arm. Later, after they discovered shovels at the local church, which Mr. Andre says were being used for construction, they arrested three people.

A lieutenant at a nearby temporary army encampment declined to be interviewed but said his squad hasn't committed any abuses of the local population and isn't involved in any mining activities.

Back in Bundo, four garimpeiros give a different story. They say when soldiers swept through they discovered the garimpeiros working with a water pump in a pit. The soldiers confiscated the pump. Then a negotiation ensued, says one garimpeiro, and the soldiers agreed to give back the pump in exchange for $54-as well as a split of the action. "When we hit the gravel, the soldiers will be present to get their share," he says.