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Report: Angola's diamond resources do little to develop country

October 31, 2007

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Angola—In the last five years since Angola has been at peace from civil war, the country's diamond production and gross revenue from diamond sales have nearly doubled, and the annual diamond contribution to government has more than tripled, according to the 2007 edition of Partnership Africa Canada's (PAC) Angolan Diamond Industry Annual Review.

Specifically, diamond production has increased from five million carats in 2002 to close to 9.5 million carats in 2006, gross revenue from diamond sales has increased from $638 million in 2002 to $1.2 billion in 2006, and the annual diamond contribution to government has increased from $45 million in 2002 to $165 million in 2006.

This does not mean, however, that the Angolans are reaping the benefits, according to PAC's report.

PAC's annual review researchers traveled widely in the Angolan provinces of Lunda Norte and Lunda Sul discovering few schools, little treated drinking water, roads unrepaired since colonial days and little public investment geared to solving these problems.

"Nearly one million residents of Lunda Norte and Lunda Sul suffer disproportionately from the exploitation of Angola's diamond resources," the report reveals. "After all, the projects restrict their access from cropland, prohibit use of local rivers and, ultimately, can damage the local soil and water systems. In addition, their homes and fields can be moved because of a diamond-mining project."

PAC's report blames this, in part, on the Kimberley Process Certification Scheme (KPSC). The non-governmental organization says the KPSC—designed to prevent rough diamonds from being traded in diamond-fueled war areas such as Sierra Leone and Angola unless accompanied by a Kimberly Process Certificate stating that the diamonds are "clean"—is misguided and fails to criminalize garimpeiros (unlicensed diggers working with unsophisticated equipment in areas unsanctioned by the government). PAC states that this is due to a conflict of interest between the Endiama subsidiary Sodiam and the KPSC: Sodiam is a KPSC authority responsible for ensuring Angola's diamonds are conflict-free, but since they are also the owner and exporter of these same diamonds, Sodiam's interest is exporting as much as possible.

The report also says the Angolan government and Endiama in the Angolan diamond sector have chosen to give away large percentages of various joint-venture projects to political friends and insiders. The money they receive essentially robs Angola of funds that could be used for its development.

This is the third annual review of the Angolan diamond industry that PAC has produced with its partners. This study was researched and written by a team of PAC researchers, with the assistance of CEJPM, the Episcopal Commission for Justice, Peace and Migration, as well as Gremio ABC.

To view the report, visit PAC's Web site, Pacweb.org.
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