Diamonds trade: Bunge committee comes up with tough recommendations


JF-Expert Member
Feb 11, 2007
Diamonds trade: Bunge committee comes up with tough recommendations

But report appears to have been shelved

Dar es Salaam

THE government was in 2004 advised to set up a stronger internal control system to monitor all mining activities in the country, including production, sorting and grading, export and sales of mineral resources, to ensure a more correct remittance of proceeds accrued.

In its recommendations contained in a 2004 report, a parliamentary subcommittee appointed in 2003 to look into the country’s diamonds trade noted state laxity and overall weak control with regard to the mining industry as a whole, creating loopholes for denial of state revenues.

The subcommittee also advised the government to make arrangements with De Beers for the management of the Mwadui-based Williamson Diamonds Limited (WDL) to operate independently but remain responsible to the shareholders on matters pertaining to administration, marketing and other technicalities.

It also called on the National Assembly to invoke Act No. 3 of 1988 so that appropriate punitive steps are taken against the WDL management and Diamond Trading Corporation (DTC), for failing to hand over requisitioned documents for perusal by the subcommittee despite repeated oral and written demands.

The subcommittee was formed from within the then sitting parliamentary public accounts committee and tabled its report in the august House in 2004. But for reasons that remain unclear, it was never discussed by other legislators and appears to have ended up being shelved altogether.

In order to tighten tax evasion loopholes in the mining sector and ensure that the sector contributes fully to the growth of national economy, the report called for a closer working relationship between institutions like the Treasury, the Ministry of Energy and Minerals, the Ministry of Justice and Constitutional Affairs, the Tanzania Revenue Authority (TRA) and the Presidential Parastatal Sector Reform Commission (PSRC).

It added: ’’Bearing in mind that minerals are non-renewable resources, the government should have comprehensive agreements with mining companies on environmental management, and insist that it is the responsibility of the mining companies to ensure that they meet the costs of environmental rehabilitation.’’

On diamonds mining, the report further recommended that the government should provide space and support to artisanal miners by extending soft loans and technical know-how, and assist them in developing effective marketing strategies.

The subcommittee also advised the government to review the ownership and leasing of diamond mining blocks, so that those which have not been developed or whose leases have elapsed are allocated to other developers.

It said it was high time that the government formed executive agencies for sorting and cutting diamonds. The team suggested that such agencies be based in either Dar es Salaam or Shinyanga and London.

It was also suggested that the government borrow a leaf or two from Namibia, Botswana, South Africa, Russia, Canada and Australia on ways to break De Beers’ stronghold on the diamonds market and thereby increase competition and inventiveness within the trade.

’’If Namibia has managed to set up a lapidary to cut and polish its own diamonds, what is wrong with us doing the same?’’ the subcommittee queried.

The team concluded its report by appealing to the National Assembly to pass a resolution binding the government to look for other partners other than De Beers to work with in the diamonds industry.

Members of the subcommittee were Hamad R. Mohamed (chairman), Leonard Derefa, Emanuel Kipole, Remidius Kisasi, Abdula S. Lutavi, Ms Monica Mbega and Leonard Shango, all sitting MPs at the time.

Others were Anselm Mrema (secretary), Kitauli A.C. Francis (auditor) and Ms Milembe Boya (accountant).
Top Bottom