US embassy cable - 04KINSHASA2000

C O N F I D E N T I A L KINSHASA 002000 
 
SIPDIS 
 
E.O. 12958: DECL: 10/28/2014 
TAGS: EMIN, ECON, EAID, PGOV, PREL 
SUBJECT: CONTINUED CONFUSION ON DIAMOND SECTOR MANAGEMENT 
 
 
Classified By: Econoff Peter Newman for reasons 1.4 b/d 
 
1. (C) Summary: Competition between the Minister of Mines 
Eugene Diomi Ndongala and CEEC (diamond evaluating authority) 
Managing Director Victor Kasongo continues to increase. The 
European Commission (EC) recently decided not to fund a 
diamond sector audit presented by Diomi and the IMF. The two 
major industrial diamond producers and the CEEC were included 
in the terms of reference. The Minister is also complicating 
the GDRC delegation to the Kimberley Process Plenary in 
Ottawa by attending himself with two advisors, separately 
from the original delegation led by Kasongo and three of his 
advisors. Coordination is non-existent between the two bodies 
and will frustrate reforms. End summary. 
 
2. (C) In concert with the IMF, Minister of Mines Diomi 
Ndongala approached the EC with terms of reference for a 
diamond sector audit to be conducted outside of the context 
of both the Kimberley Process and normal audits of 
parastatals. The terms of reference specifically targeted 
Sengamines (a privately-owned industrial level diamond 
producer), Miba (the diamond parastatal), and the CEEC (the 
diamond evaluating authority and a parastatal), all of which 
are significant revenue earning companies. (Comment: The 
Ministry of Mines has no jurisdiction to hold a financial 
audit of these firms and only has technical oversight of 
mining parastatals. Administrative and financial oversight 
rest with the Ministry of Portfolio. Diomi was, yet again, 
attempting to overstep the bounds of his authority, this time 
with the support of the IMF. End comment.) 
 
3. (SBU) EC representative Vincent Ringenberg reported to 
Econoff that the EC has decided not to fund the audit. 
Although the EC is interested in providing aid targeted 
toward the natural resources sector, it feels an ad hoc audit 
of three companies in the diamond sector is too specific (and 
politically sensitive) to have as a starting point. Before 
accepting projects in this sector, the EC would want to 
commission an expert study to identify what kind of 
value-added EC funded projects could have for the development 
of the DRC. The EC representative office has not yet informed 
the Ministry of Mines or the IMF. 
 
4. (C) The Kimberley Process considers the CEEC to be the 
main Congolese interlocutor for diamond evaluation and 
certification in the DRC. The CEEC is sending a delegation of 
four CEEC officials to Kimberley Process Plenary in Ottawa. 
When the Minister Diomi discovered that there was a plenary 
meeting and that the CEEC was already prepared to send a 
delegation and make a presentation, he immediately informed 
the Kimberley Process that he would attend himself with two 
accompanying advisors, effectively creating a parallel 
delegation. Canadian pol/econ counselor Stephen Randall 
commented that Kimberley Process Chair Tim Martin has allowed 
Victor Kasongo to remove the DRC from the list of presenters. 
Martin prefers not to officially deal with either group until 
Diomi and Kasongo sort out their differences. (Comment: The 
current Kimberley Process Plenary delegation snafu is 
unfortunate as it puts a very unprofessional face on the DRC 
shortly after the clear positive of voluntarily inviting the 
Kimberley Process to review DRC operations. End comment.) 
 
5. (C) Comment: Post feels the EC and the Kimberley Process 
are correct in avoiding official entanglements with the 
Ministry of Mines as any involvement is likely to be 
politicized by the Minister. If institutional battles between 
the Minister of Mines, the CEEC and other mining sector 
agencies continues, reforms as recommended by the World Bank 
and the recent Kimberley Process Review Visit will only come 
to fruition very difficulty and contentiously. IMF 
involvement is curious and is most likely tied to its 
objective of increasing government receipts. The IMF, 
however, has been shanghaied this time into supporting 
Diomi's personal agenda. End comment. 
MEECE