Namibian Newspaper Raises Concerns About Transparency of Government Diamond Company

Mining and Exploration
14/10/2016 10:00

The Namibian newspaper has raised concerns that a new government independent sales company called Namib Desert Diamonds (Namdia), which is designated to sell stones worth over an estimated US$150 million (N$2.1 billion) per year as stipulated by a 10-year agreement between De Beers and the Namibian government, is allegedly operating without the desired level of transparency when it comes to selling Namibian resources. The arrangement leading to the creation of Namdia states that Namdeb Holdings (the De Beers-Namibian company) will provide US$430 million of rough diamonds annually to Namibia Diamond Trading Company (NDTC), which will channel 15% of these diamonds to Namdia. And indeed, mines minister Obeth Kandjoze said that, "Namdia received its first purchase entitlement from NDTC during September. It received 15%.” Asked whether the stones have been sold, the minister replied, “Yes, the company sold the entire diamonds received from NDTC”.

However, writes The Namibian, the secrecy surrounding the entire affair means that the public has not been informed about how much the government received from the sale of those diamonds, where that money is and how it will be used. When asked, it appears that Kandjoze was forthright about the directors of the Namdia, including: Kennedy Hamutenya as CEO, whom Kandjoze says, "has experience in and knowledge of the diamond industry, and has served as the chairperson of the government negotiating team which lobbied De Beers for the decade-long diamond deal"; lawyer Shakespeare Masiza, who is the chairperson; and businesswoman Tania Hangula, the chairperson of the Development Bank of Namibia's board, who will serve as the vice chairperson of the new diamond company; and several others. The Namibian writes, "The government normally announces heads of state-owned enterprises such as boards of directors and chief executive officers," but in this case only provided this information when asked; it also says it, "understands that several well-connected business people lobbied to influence the appointment of the board." 

In response, Kandjoze maintained that Namdia selected beneficiaries from known international diamond dealers, although The Namibian says he declined to name them. Kandjoze: “This information is proprietary and is bound by confidentiality provisions between the parties to the agreement, and as such, it is protected information. By divulging that information, it will end up with the competitors, which will not be in the best interest of the company,” the minister stated. Kandjoze said Namdia has a mandate to sell to whoever in the international market, with the objective of getting maximum returns. He strenously denied that government has been secretive about Namdia, because the signing of the agreement was done publicly and reported in the media. He further claimed that he also answered questions in parliament regarding Namdia. The appointment of the permanent CEO is set to be made before the end of the year, and it will be publicly advertised. A newspaper is certainly within its rights to investigate appointments to government positions, and concerns always seem to be raised particularly when diamond resources are involved, but perhaps it is also precipitous to assume that the fledgling company is intentionally shrouding its activities in secrecy.