UK Government Exonerates De Beers in an Utterly Unconvincing Manner
May 13, 04If I were falsely accused of holding up a bank, how happy should I be if the judge dismissed the case on the grounds that the bank was in reality a grocery store and that my only likely association with the store was through my niece who once may have bought a diet coke and a chocolate bar there?
This absolutely ridiculous scenario came to mind when I read the U.K. Government’s announcement exonerating De Beers from the accusation made by the UN Expert Panel on the Illegal Exploitation of Natural Resources and Other Forms of Wealth in the Democratic Republic of the Congo (DRC) that De Beers had been in breach of the OECD Guidelines for Multinational Enterprises.
The UN’s allegations against De Beers were made in two consecutive panel reports. The U.K. government – after a long investigation – has now declared “in the circumstances and on the basis of the information provided, the UK National Contact Point (NCP) [i.e. the Department of Trade and Industry (DTI)] concludes that the allegations made by the UN Expert Panel against De Beers are unsubstantiated.”
The UK government thus dismisses all charges against De Beers – but the way it did so, the arguments it raised and the way its conclusions were phrased certainly call for a comparison with the illogical link between bank robbery charges and the purchases of diet coke and chocolate. Even if the conclusion is right, the reasoning is unconvincing. If I were De Beers, I would have said “thank you – but no thank you.”
Let’s take a closer look at the U.K. government’s reasoning as per the statement issued by Duncan Dawson, the so-called National Contact Point for arbitrating issues arising out of alleged breaches of the OECD Multinational Guidelines. The following is taken literally, without further editorial comments, from the publicly released UK government document:
“Specifically the [UN] Panel alleged De Beers was in breach of its own Diamond Best Practice Principles, published by the Diamond Trading Company (a member of the De Beers group) in 2000 and, consequently, in breach of the OECD Guidelines.” The Panel did not, however, identify which provision(s) of the OECD Guidelines for MNEs they alleged De Beers to be in breach of.
The panel based its allegations on a claim that three sightholders, clients of the Diamond Trading Company (DTC) exported diamonds from the DRC, contributing to funding of parties involved in the conflict and that De Beers failed to monitor the compliance of these sightholders against The DTC’s Diamond Best Practice Principles.
These specific allegations were only made known to De Beers by the Panel at a meeting between the two in May 2003. Prior to that date, De Beers was completely unaware of the basis upon which the Panel alleged that it was in breach of the OECD Guidelines. The UN Expert Panel did not contact De Beers to discuss these allegations before publishing their initial report.
After the initial UN report was published, De Beers wrote to the Panel in December 2002 and February 2003 requesting a meeting to discuss the report; neither letter elicited any immediate response by the Panel. However, in April 2003, the Panel invited De Beers to a meeting in May 2003, referred to above.
The Panel refused to give De Beers any details of the basis of its allegations prior to the meeting and consequently De Beers was unable to bring relevant documentation or appropriate members of staff to the meeting to address the Panel’s concerns.
Following the meeting, De Beers replied in writing, addressing the specific allegations relating to the three sightholders raised by the Panel. The Panel did not reply to De Beers' response nor ask De Beers for any further information and rather published its final report listing De Beers as a company that had been in breach of OECD Guidelines.
De Beers has stated its disappointment with the way this Panel conducted its affairs, particularly when it had previously enjoyed constructive relations with the United Nations, principally, in the development of the Kimberley Process Certification Scheme where its work was commended by the Secretary-General.”
The foregoing has been the restatement of the facts and circumstances as seen by the UK government. What it now should have done – and what might have been expected by any reasonable person -- is blasting the UN Panel for its most questionable way of operating, for having impugned the reputation of both De Beers and unnamed sightholders, and of having brought the UN itself into disrepute by this irresponsible, spurious, shallow, and even shoddy way of operation. The UK government had both an opportunity and, perhaps, even a moral and legal obligation to raise serious doubts about the uses or abuses made by the UN Panel of its authority.
But the UK government didn’t do so. Instead, it published the following comments:
It first dealt with the sightholders: “Based on the information which it has seen, the UK NCP is satisfied that the relationship between De Beers and the three companies named by the UN Panel is such that the activities of those three companies in the DRC, insofar as they relate to De Beers, are outside the remit of the UK National Contact Point (NCP) acting under the OECD Guidelines for Multinational Enterprises.”
Then, in respect to the Best Practice Principles, the UK government comments: “The UN Expert Panel on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of Congo (The UN Expert Panel) alleged that De Beers breached the DTC Diamond Best Practice and, consequently, were in breach of the OECD Guidelines for MNEs. The UN Expert Panel did not specify which provisions of those Guidelines were alleged to have been breached, failed to give adequate or timely information supporting its allegations and failed to engage meaningfully in the dialogue process envisaged by the Guidelines.”
And, yes, as we stated earlier, this led the UK government to conclude, “The allegations made by the UN Expert Panel against De Beers are unsubstantiated.”
The UK government gives the impression that it decided to exonerate De Beers merely because of some kind of technicality. The UK government didn’t say: this whole thing was a big farce, a great disgrace, a great injustice to De Beers and some unnamed sightholders. It didn’t say that the UN Panel ought to publish both retractions and apologies. No, it merely found the UN guilty of not substantiating its accusations.
I am lucky that the bank robbery charges and the purchases by my niece of a chocolate bar and a diet coke were not referred to the DTI. What I have learned this week is that even if a situation seemingly looks ridiculous – don’t hold your breath waiting for the findings of government…