Mining giants puzzled by UN allegations

Two of the worlds largest gem and mining firms have denied any involvement in unethical activity in the war-torn Democratic Republic of the Congo (DRC). The two South African born companies, Anglo American and De Beers diamond company, were among dozens of multinationals in South Africa, Europe and the United States that allegedly violated ethical guidelines on conflict zones stipulated by the Organisation for Economic Cooperation and Development (OECD). A UN statement on Monday said an expert panel appointed by UN Secretary-General Kofi Annan to investigate the illegal exploitation of natural resources and other forms of wealth of the DRC reported that steps needed to be taken against companies or individuals to discourage exploitative and illegal activities. It said behind the exploitation were "elite networks" of civil, military and government power-brokers. The report recommended that financial restrictions be placed on 29 companies based in Belgium, Rwanda, Uganda, DRC, Zimbabwe and South Africa, and that a travel ban and financial restrictions, such as the freezing of assets, be imposed on 54 individuals. "By contributing to the revenues of the elite networks, directly or indirectly, those companies and individuals contribute to the ongoing conflict and to human rights abuses. More specifically, those business enterprises are in violation of the OECD guidelines for multinational enterprises," the report said. De Beers spokesman in South Africa, Brian Roodt, told IRIN the diamond company was puzzled by its inclusion in the report. "We're trying to get hold of the UN to find out what the specifics are in relation to their allegations," he said. Meanwhile, Anglo American issued a statement saying it has had no operations in the DRC "for several years". "The group's interests have included a couple of potential projects, only one of which ... proceeded beyond the earliest form of pre-feasibility stage. It was precisely because of the company's concerns with regard to broad governance issues surrounding mining in the DRC that Anglo American hesitated to become further involved in the country. "We discussed our concerns with the World Bank and participated with groups involved in the drafting of the new Mining Code – which we fully support – the objective of which was to increase transparency in the allocation of mineral rights and set clear rules," the company said. In July 2002 Anglo Base Metals (a division of Anglo American) divested itself of its 50 percent stake in the one project that had gone beyond the pre-feasibility stage. Alex Yearsley, of international lobby group Global Witness, said the report was a "pretty emphatic condemnation of the diamond industry". "It shows how the majority of independent diamond dealers - from Belgium to Israel to New York - are still operating outside of the law and have no regard for human safety and are not interested in the conflict diamond process," he said. With regards to the two gem and mining giants, Anglo American and De Beers, Yearsley said: "If the UN has specific evidence against those two companies then they should make it available in the wider domain. However, [I would like] to note that De Beers has been very active in working on solutions to the conflict diamonds problem."