WeeklySA_AdminTIME-UP: Conglomerate under pressure to accede to demand for 50-50 percent share partnership over that country’s diamonds…
A mighty battle royale is raging between the government of Botswana and diamond selling global cartel De Beers, formerly a South African owned behemoth.
Rid of all the verbiage the fight is basically Botswana’s demand that it must get a fair share of her diamonds which she co – owns with De Beers. At present in terms of agreements entered between the two, De Beers gets a lion’s share of the profits. It has been like this for almost 50 years and Botswana wants to end this.
A little bit of history is necessary to understand why Botswana entered into this patently unfair agreement in the first place. At the time Botswana and De Beers created a holding company called Debswana, it was only six years after the country had thrown off the shackles of British colonialism. Botswana was one of the poorest countries in the world.
Desperate to improve her economy and without any Motswana who understood this industry – one of the most secretive and opaque in the world – it was easy for the country to be taken advantage of and De Beers did precisely that. At the time De Beers controlled almost 80 percent of the global diamond sales, making it virtually a monopoly.
De Beers is no longer a monopoly but it is still very influential in this business. Today Botswana can look for potential suitors all over the world with China being among the many obvious candidates Why is De Beers refusing to accede to Botswana’s demand for a 50 – 50 percent share partnership among other demands is the proverbial one million dollar question. Negotiations over this matter have been going on seriously for the past five years. It was one of the heated campaign issues in the last elections in 2018. The opposition was vocal in demanding that the whole agreement must be negotiated afresh. With elections scheduled for next year, this is going to be an important campaign plank.
Renegotiating the agreement is a matter of economic justice as well as restoring the integrity of Botswana. Many Batswana are unhappy about it and failure to resolve it could be the underbelly of the ruling party.I also suspect that the ruling Botswana Democratic Party is ratcheting matters on this issue in order to take the wind out of the opposition sails.
Apart from the issue of shares, Botswana has other critical grievances on the entire agreement package. Another bone of contention is the role of the all powerful Diamond Evaluator whose mandate as his title suggests, is to evaluate the worth of the stones. Botswana would like to appoint their own Evaluator because it is alleged the current one seems more beholden to De Beers.
The government, it seems , is in the dark about the correct amount of diamonds or carats it produces and their true value except what the Evaluator says and there is no way to verify his claims.
Many Batswana including some government officials claim that at present they are not in a position to know whether they might be short changed or not.
According to those who subscribe to this theory, the evaluation lacks transparency. It is claimed that De Beers as a separate entity from Debswana buy these stones at a certain price but when they later sell the same package in the open markets, their value sky rockets. Batswana ask how is this possible unless their worth was deliberately undervalued. A fair question. The diamond industry is a secretive and murky world even at the best of times.
Batswana were screwed for 50 years pure and simple. Why can’t De Beers make amends and change this patently unfair agreement.
In terms of the present agreement the Botswana government through Debswana sells 25 percent of the stones produced while De Beers sells the remaining 75 percent.
Failure to resolve the issue has angered the normally unruffled Botswana President Mokgweetsi Masisi. In February he told a gathering in his home village,
“We are dealing with a giant. It is the first time it has been shaken like this. We want what is ours. These are our diamonds and we want a majority stake…if the talks become difficult, we will say no, let everyone pack and go”.
Botswana also wants greater access and clarity on the value of these stones after they leave the country and enter the international markets. Apart from the issue of a fair agreement there are other factors which are forcing government to push a hard-line stance against De Beers. The Russia – Ukraine conflict is working in the favour of our northern neighbours. Buyers in Western Europe have shunned Russian diamonds, the world’s largest producer of the stones. This partly explains why Botswana made record high sales in 2022.
Diamonds account for 30 perfect of the country’s Gross Domestic Product ( GDP) and 70 percent of its foreign exchange earnings but the economy has not grown to levels that were expected. Diversifying the economy away from mining has not produced the desired results and this has put pressure on the national treasury. This makes sense why Botswana would want to derive much from the diamonds.
There is also an overtly political dimension to the dispute.The ruling BDP currently holds 38 seats in the national assembly against the combined opposition’ s 57. It is not exactly an overwhelming majority. The opposition is once more going to make full capital out of this issue.
It is not ng to be easy easy for De Beers to change. If it was, they would have done the right things from the time these negotiations started about five years ago.
There are fears in some quarters in Botswana that De Beers could “ punish “ Botswana’s economy by deliberately depressing the price of this commodity or fund an opposition to the BDP that would be less inclined to take a radical position on the issue. This latter scenario is unlikely. If there’s one thing that unites Batswana right across it is the need to change the agreement.
Concerns about retaliatory measures by De Beers are well founded. Big cartels do not simply roll over and allow their profit margins to be undercut. They fight. There is another complicating factor for Anglo American. In South Africa mining companies are looking at the events across our northern neighbours with a certain sense of trepidation. There’s a fear of the domino effect any such concessions could have on them.
An equitable resolution of the Botswana – De Beers seemingly intractable issue could be a pointer to whether talks between the African National Congress government and big business over the worsening economic crisis facing the country are likely to bear fruit. Anglo American is still the most powerful business voice in the South African economy.
The two parties are focusing primarily on three core challenges. Namely; the energy crisis, the collapsed logistics infrastructure and crime. The first two affect the bottom line of commerce in a big way
SMILE TO THE CAMERA, MY LORD!
CIRCUS: Upmanship and flamboyance reigns supreme in courts – thanks to television…
By Nhlanhla Mbatha
DAMN to whoever introduced televising court proceedings live. Apart from journalists jostling for better scoops, photo shots and shoving their microphones and cameras in the faces of the accused persons and lawyers asking clichéd and slanted questions to make the deadline for the day’s or next day’s news headlines.
In the process of this the wheels of justice grind exceedingly slow as upmanship and flamboyance rears its ugly head with all sorts of interlocutory applications throughout and the tedious subjecting of witnesses to, often irrelevant, time-wasting, long-winded and superficial questioning.
Some in the lawyering profession have become glorified entertainers and stand-up comedians who can win Golden Globe Oscars awards hands down.
To add fuel to the fire, suddenly the presiding judicial officers are now afraid of asserting their authority on the proceedings. Now they entertain all kinds of frivolous applications, objections and technical stunts.
Every two seconds there is postponement because legal representatives can no longer argue on their feet because they did not come prepared despite their bulgy and big bags and suitcases that are supposed to carry their heavy legal artillery.
Every sideshow stunt now requires postponement for heads of argument to be submitted and another postponement for the judicial officer to make a ruling.
Even the witnesses are making sure that they get their instant fame with their ridiculous demands and threats despite well-established subpoenaed witnesses who are competent and compellable witnesses.
What happened to confident, knowledgeable and technically savvy and assertive judicial officers who nip sideshow distractions in the bud and focus on forging ahead with the crux of the issues being tried before court?
Small wonder the court rolls are clogged with part-heard matters. Compound the above situation further, anyone with a law degree or professional admission as a legal practitioner or lecturer often wearing a disguised political hat or narrative, being interviewed on the sidelines, giving running commentary on television as a “legal expert”, unleashing their existent or non-existent talent and expertise on the unsuspecting captivated television audience, with their pedantic analysis.
Not only is the television reporter cluelessly nodding to some of these charlatans. The so-called “expert analysis” is in fact nothing other than a personal opinion dressed up as educated guesswork and indulgent speculation peppered with legal jargon.
No wonder three to four weeks trials are now taking years to complete amid the process of amassing a convoluted court record that makes a mockery of well-established procedural and evidentiary rules.
Speedy trials and swift justice are compromised under the ill-conceived guise of moving with the times, technology and access to justice, access to information and freedom of expression and the free media.
*Mbatha is a freelance journalist
