File:Thirion 1985 Eighth Interim Report.pdf

Summary

Commission of Inquiry

In 1982, Natal Supreme Court Judge Pieter Thirion led a Commission of Inquiry into Alleged Irregulaties and Misapplication of Property in Representative Authorities and the Central Authority of South West Africa (Namibia). It was a wide-ranging investigation into political corruption and the divisive tribal structures imposed on Namibia by apartheid South Africa.

Minerals

Judge Thirion extended his investigation into the behaviour of multinational mining companies in the former German colony and found:

• at one mine 420,000 tonnes of ore were sent out of the country as "geological samples";
• at another, the state leased the mining rights to a businessman at £1,500 per year, who then reassigned them for an income of £650,000 per year;
• at the British owned Tsumeb mine, lead and copper were exported with undisclosed amounts of gold and silver;
• and the British South-West Africa Company exported £7 million-worth of minerals without paying tax.

Gem diamonds

Judge Thirion focused upon the stewardship of the nation's principal economic resource - gem diamonds of the Atlantic beaches north of the Orange River. The Commission's main findings were:

• There were no meaningful controls over Namibia's most important industry;
• The premises of the supposedly independent Diamond Board for South-West Africa were provided by De Beers;
• All of the Board's agents were De Beers' employees;
• The entire costs of running the Board were met by De Beers as a tax deductible expense;
• Stanley Jackson, the Diamond Board Secretary, was also Secretary to Consolidated Diamond Mines.

Conclusions

The Commission and investigators produced detailed evidence linking De Beers to tax evasion in Namibia. One of the allegations was that diamonds were exported through a host of De Beers subsidiaries, who each took a cut of profit, before the diamonds were channelled through the tax haven of Bermuda. This meant that the Namibian holding company would receive only 86% of the selling price. In the first six months of 1983 diamonds worth US$171 million were channelled in this way.^[1]

In 1985, the 350-page "Eighth Interim Report–Control by the State over the Prospecting and Mining for, and Disposing of Minerals in South West Africa" found that De Beers had overmined the diamond reserves in the Sperrgebiet ahead of Namibia's independence: The excessive depletion of the deposit was a preferential depletion of the more valuable deposits to the detriment of the low grade deposits, and therefore a breach of the provisions of Clause 3 of the 1921 Halbscheid Agreement. The probabilities were that the effect of the excessive depletion of the deposit would be to shorten the life of the mine and to detrimentally affect its profitability towards the end of its life.^[2][3]

Disappearing diamonds

Broadcast in September 1987, a Granada TV World in Action documentary film "The Case of the Disappearing Diamonds" featured Judge Thirion's three-year investigation and his report.^[4]

References