'De Beers prices kill diamond industry'

SHARE   |   Sunday, 12 April 2015   |   By Othusitse Tlhobogang
Mark Cutifani Mark Cutifani PIC: www.wsj.com

Diamond Cutting and polishing companies are blaming the high prices of rough diamonds from DeBeers as one of the many factors that led to recent job losses in the sector, according to the executive secretary of Botswana Diamond Workers Union (BDWU)  Mhuhiri Bontshetse. 
The monopoly held by De Beers over the sales of diamond in Botswana is allegedly backfiring and crippling the industry. Bontshetse said following recent retrenchments in the diamond cutting and polishing  industry , companies  have pointed  to the high price  of rough diamonds  which they are  obliged to buy from DeBeers  and the subsequent  high costs of operating in Botswana as the major handicaps  for their businesses.
In the case of Botswana according to  BDWU, the   partnership between government   and DeBeers  ends  at DTCB along  the pipeline after which  DeBeers  literally  appropriates all the diamonds and assumes monopoly over the marketing  and selling of   the stones to the international market. “An arrangement  of this kind  renders local  diamond factories at the mercy  of the supplier, especially that they are obliged to buy  only  from DeBeers in order to retain their licenses, “ said Bontshetse.
The government’s involvement with DeBeers according to the union is not helping the situation either as now she is forced to play two conflicting roles, that of a regulator and that   of a businessman. “Government has active and major interests right from the mining of diamonds, through to the sorting and valuing of diamonds at DTCB, selling rough diamonds at Okavango Diamond Company, ending with shares with site holders,” said Bontshetse.
This rather compromising arrangement according to Botshetse is severely constraining government to exercise its regulatory role of creating an enabling environment for all participants in the industry. In fact Bontshetse says as the union they reckon this is the very same reason why they are failing to ensure labour practices and protection of employees against life threatening health and safety hazards in the industry. “It is very shameful for diamond workers to be still paid poverty wages like P850.00 per month in the industry that deals with a product of such high value that contributes significantly to the country’s GDP,” he said.
BDWU Leadership accused government and diamond manufacturing companies of prejudice and conniving against them and their members.
Bontshetse said it is disturbing that  employers  and their associations   in the diamond industry  are not willing  to share at  least  some of the  problems  that they are   encountering but rather  prefer  to hold secret  meetings with  government at the exclusion of the union. "These employers are also hesitant  to consult  with us as well in time regarding  the imminent retrenchments , but rather  prefer to engage  us after  they have  taken  final decisions, “ said Bontshetse.
The diamond industry has suffered job losses from the beginning of this year. According to a press statement from the union, the union lost members at its Serowe based Teemane Manufacturing Company; the Gaborone based Diamond Manufacturing Botswana (DMB), after the employer’s closed shop, leaving 490 without employment. A Molepolole based  Leo Schechter  retrenched 28 workers last year  and later retrenched 42 more workers by end of March this year. The press statement further points out that there was yet another retrenchment at Eurostar Botswana where around 105 employees were laid off.
Now the above mentioned job losses may be to most a clear indication that indeed the diamond cutting and polishing industry is currently going through some serious problems. Despite this BDWU says they are  surprised that Botswana government have chosen to remain mum about the issue, and rather choosing to handle it with so much secrecy that  not even union leaders were afforded the chance to confer. Bontshetse said the union    has long demonstrated willingness to work with  both employers  and government over issues  that affect  the diamond  industry including  labour issues but were rather left with an egg on their face every time as their concerns were either ignored or took long to be addressed.
The BDWU Executive Secretary further   indicated how as a union they have battled with retrenchments and dismissals in the industry over the years only to be met by resistance from difficult employers who have little regard for workers’ rights and interests. “They accuse the union of wanting to usurp the powers bestowed on management or that we want to control their companies,“ Bontshetse said.
The union is now seeking government to facilitate an establishment of a national social dialogue forum for diamond industry which is provided for by ILO Convention No. 144. They also want government to register an industrial bargaining council which they say they have long proposed. BDWU say government should also develop an empowerment policy for local diamond entrepreneurs and ensure fair labour practices and protection of workers.
When briefing parliament about the state of affairs in the mining industry recently, the Minister of Minerals, Energy and Water Resources Kitso Mokaila said his ministry was monitory the situation in the  mining industry with keen  interest.



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