Volume I, Issue I
Page3

Special Feature
Focus on the Diamond Industry


  Corruption Watch
  The Pujeh Case: A Dangerous Precedent
The successful appeal of the Anti-Corruption Commission’s conviction of the prominent former Minister for Transport and Communications and Kailahun District M.P. Momoh Pujeh illustrates the pitfalls of legitimately prosecuting illegal mining and diamond smuggling in Sierra Leone as well as the need for the reform of this critical sector of the economy.
The importance of diamonds to Sierra Leone’s future is obvious and cannot be overstated. It is the country’s most valuable asset and its revenue vital for national development. However, the plague of widespread illegal mining and smuggling drastically reduces much-needed income for the state and people, as the Ministry of Mineral Resources estimates that roughly half of the country’s potential diamond revenue is lost through illegal activities.
The recent highly politicised Pujeh case proved to be a high-profile battleground over this critical issue of illegal mining, and in particular the issue of licensing. In the year 2001 Momoh Pujeh was arrested and investigated by the Sierra Leone Police and charged by the Anti-Corruption Commission for the illegal possession of Le 73,000,000 (US$26,000) worth of diamonds. Pujeh

had bought and sold the diamonds without a valid licence, having instead used the licence of his colleague, John Ndomawa. He was then convicted in accordance with existing legislation in September 2003 after a 13-month trial, and Pujeh immediately appealed the verdict to the High Court. Interestingly, Mr. Pujeh was issued mining licences by the Ministry of Mines while he was standing trial.
In his appeal, Pujeh claimed that the deal had been legitimate since he was given Mr. Ndomawa’s licence “to travel with the diamonds for onward sale,” claiming that the law did not require him to register with the Ministry of Mineral Resources or to possess a license to export, deal, or mine diamonds in his own name. This erroneous assertion would imply that the mere physical possession of another’s licence conferred its rights, in clear contravention of existing laws and even the rules printed on the front of each mining licence, which clearly state that “This licence is not transferable.”
The judge’s unfortunate decision to uphold the appeal and overturn the conviction was made in blatant disregard of existing laws designed to ensure that diamond miners, sellers and

exporters contribute to national revenue and thus development through the purchase of licenses and the legal sale of diamonds. This case was surely a litmus test of mining legislation and its effectiveness was seriously undermined, while a dangerous and unfortunate precedent was set. Thus, the informal “customs and practices” of dealers to not abide by licensing regulations are upheld, allowing diamond sellers free reign to operate without a licence.
Another issue that arose from the proceedings concerns the Government Gold and Diamond Office’s (GDDO) system of diamond valuations, as it was revealed that Pujeh was able to have his diamonds valued despite not possessing evidence that they were legally in his possession. This points to the need for greater scrutiny of persons wishing to value their diamonds.
In the Pujeh case, surely a travesty of justice prevails, which indicates a pressing need for the reform of mining legislation, for as long as blatant perpetrators of corruption remain free from effective prosecution, particularly in the all-important diamond sector, meaningful progress in the country will remain elusive.


A Remedy
The Extractive IndustriesTransparency Initiative
mining areas, while revenue generated from mining companies to the government is minimal and fraught with allegations of corruption.
To address this pressing global predicament, British Prime Minister Tony Blair announced in September 2002 the establishment of the Extractive Industries Transparency Initiative (EITI) at the World Summit on Sustainable Development in Johannesburg. This global multi-stakeholder initiative brings together developing countries’ governments, donors, companies, investors and civil society organizations in an effort to reduce corruption in the extractive sector through increased transparency of extractive companies and government.

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The sensible use of natural resources is necessary for a country’s sustainable economic growth, development and poverty reduction. However, many countries possessing a wealth of resources, particularly in the developing world, suffer gross mismanagement and the diversion of funds at the hands of business and government, who often collaborate toward their own private interests at the expense of the general population who must bear the subsequent negative economic, social and environmental impacts.
Nowhere are the effects felt as deeply as in Sierra Leone, whose

history of the misuse of its mineral resources is notorious worldwide, and indeed its wealth of diamonds (and to a lesser extent rutile, gold, bauxite and timber) has been more of a curse than a blessing as corrupt politicians and others have enriched themselves from illicit dealings virtually since their discovery. The collapse of the state was largely precipitated by rampant corruption, and the consequent decade-long civil war was continually fueled by the illegal diamond trade. Even after the restoration of democratic rule, government continues to lack the capacity to secure and monitor the extensive diamond