Concourt mandate on Diamonds Act must be broadened
FOR US as participants in the diamond industry the matter of the Diamonds Act 56 of 1986 being dealt with in the highest court in the land was long overdue, but alas, the mineral-specific legislation was narrowed down to a single section, despite its archaic and apartheid-era-inspired model.
Even the reasoning behind the final decision on this single section was weak and uninformed. One would have thought the constitution was about righting the wrongs of the past and being progressive.
The possession of a rough diamond is outlawed – it is contraband like drugs, yet people do not eat, drink or inhale it.
This is the basis for the Diamonds Act 56 of 1986 and was meant to protect the assets of large mining companies like De Beers who mined close to 95% of diamonds at the time.
This is not the case in non-African diamond mining countries like Canada, Australia and Brazil. It implies that the rationale for controlling possession was that South Africans are dishonest and could not be trusted to be in possession of a rough diamond. This is an insult to rights of all and is Afro-pessimistic.
Oddly one can be in possession of rough gemstones like the equally beautiful emerald, tanzanite, amethyst and topaz, some of which are rarer than diamonds but not diamonds.
It is well known that the control of rough diamonds was part of a ploy by De Beers to control supply of rough diamonds and create an illusion of scarcity.
Section 20A in its earlier version read that: A licensee may not be assisted by a nonSouth African in the viewing and purchase of unpolished diamonds at any authorised premises, except at a Diamond Exchange and Export Centre (DEEC). The rationale therefore for the 2007-implemented section 20A was not the Kimberley Process implemented in 2003 or for monitoring the buying and selling of unpolished diamonds, but to prevent foreigners who pay higher prices from competing for rough diamonds with local buyers. Realising its xenophobic nature, the section was later changed to its current form.
The reasons given by the Constitutional Court for the decision that section 20A itself was not unconstitutional was that the section allowed the state to better monitor the buying and selling of diamonds outside the DEECs. First of all it should be noted that the term “DEECs” was used erroneously in plural in the finding of the Concourt, however, there is only one DEEC in the entire country located in Joburg, away from the diamond producers. Furthermore section 20A does not strengthen the compliance with the Kimberley Process Certification Scheme, as it is concerned only with the export and import of rough diamonds and diamond trading houses are only platforms for local buying and selling. The Concourt should have been informed that once diamonds arrive at a diamond trading house or DEEC it is impossible to ascertain if the diamonds were indeed mined in South Africa or outside South Africa as they are mixed into parcels for selling.
In fact, rough diamonds are sold and bought outside the DEEC every day, and this is controlled only through submission of documentation such as invoices and registers.
It should also be noted that rough diamonds being exported through the DEEC does not promote local beneficiation in any way, as all diamonds offered at the DEEC are eventually exported.
Control of rough diamonds was a ploy by De Beers