Information
Equipo Nizkor
        Bookshop | Donate
Derechos | Equipo Nizkor       

05Jun16

Greed, Corruption and Danger: A Tarnished Afghan Gem Trade

The local people called the militia's takeover of the giant lapis mine in northeastern Badakhshan Province a white coup — easy and bloodless. Perhaps, but the seizure has become a lesson in how the lack of accountability and rule of law in Afghanistan can turn bounty into ruin.

Riding waves of excitement after a 2010 report by the United States military that Afghanistan's mineral wealth could be worth as much as $1 trillion, the Lajwardeen Mining Company won a 15-year contract in 2013 to extract lapis lazuli in Badakhshan. For thousands of years, Afghanistan has been one of the chief sources of lapis lazuli, a prized blue gemstone associated with love and purity and admired by poets as well as jewelers.

Valued at about $125 million a year in 2014, the lapis trade had the potential to be worth at least double that, and Lajwardeen, owned by an Afghan family in the import-export business for three generations, saw a great opportunity.

Yet within 21 days of officially beginning its work, the company lost the mine to a local militia supported by the Afghan political elite.

In the two years since, according to interviews with company employees, Afghan officials and militia commanders, the government has done little to restore the mine to the company. Lapis is still being mined, with the rent split between the militia and the Taliban, who have established a strong foothold in a province long resistant to them.

With the plunge in global commodity prices deflating some of the enthusiasm for Afghanistan's mineral wealth, the initial excitement has faded into broader — and, among Afghans, all-too-familiar — concerns over mismanagement, impunity and corruption. The country has failed to make even the most basic legal and regulatory changes, and even President Ashraf Ghani recently expressed fear that "we are faced with the curse of natural resources."

Javed Noorani, an Afghan analyst who has written extensively about extractive industries, said: "We have to define a vision for our mines and how we go about extracting each. In the current reality, where do we have security control and can provide the most basic governance and oversight?"

But Mr. Ghani's government, which promised a more judicious approach to the mines, seems to be perpetuating the old way of doing business. The Afghan National Security Council, over which Mr. Ghani presides, ordered the termination of the Lajwardeen contract and moved to reopen the bidding. The council also proposed bringing the militia into the government framework. Such a change would set a strange precedent: failing to protect a contractor from a seizure of assets and then legalizing the takeover.

The decision to cancel the contract was made in November 2014, the National Security Council said in a statement, because the contractor's progress had not met the terms of the agreement and the mine was being used by "irresponsible armed men."

While other parts of the National Security Council's decision, such as dispatching forces to protect the mine, have not been carried out, the government said it still considered the contract annulled because Lajwardeen had not followed up on its appeal in the courts. The company, though, says it is still pursuing the case.

Expansion of the mineral industry is essential to cultivating Afghanistan's economic growth and weaning the country from foreign aid, said Stephen Carter, the leader of the Afghanistan campaign at Global Witness, an organization that investigates corruption and environmental degradation in the exploitation of natural resources.

"What the lapis mines of Badakhshan show better than almost any other example is that the realistic expectation is that they are going to do precisely the opposite — that they are going to be a source of conflict and corruption and actually possibly fuel a long-term, chronic resource-based conflict," Mr. Carter said. "So what should be a treasure is actually a poison for Afghanistan."

A new Global Witness report explains how interests of the Taliban and the political elite align to keep the government weak and the resources in the hands of an unlawful few. The report also shows how Lajwardeen was essentially caught in a larger rivalry between two local strongmen.

For much of this century, the mine was controlled by local strongmen including Zalmai Mujadidi, a member of Parliament who made his brother the leader of the security force protecting the mine. When Lajwardeen (the word is a Persian description of lapis) won the contract in 2013, the government struggled to hand over the mine as rival factions vied for control.

Company executives agreed to a compromise: They gave illegal miners a few months to take as much of the stone as they could. The executives also offered them a chance to buy shares in the company once it began operations.

But the company's perceived closeness to Mr. Mujadidi set off a vicious backlash. While saying Mr. Mujadidi had not been awarded shares, company officials acknowledged that they had enlisted the support of powerful people like him, especially since his brother's guards essentially controlled the mine; such was the reality of doing business in Badakhshan.

In January 2014, Abdul Malik, a militia commander and a longtime rival to Mr. Mujadidi, spread rumors that the Taliban were about to take the mine. Instead, fighters loyal to him seized it.

"There was no Taliban in the district at the time they took over the mine," said Noor Agha Nadery, who was then the district governor of Kuran wa Munjan, where the mine is situated. "The truth of the matter is that the mine was taken over with the help of senior officials in Kabul and Badakhshan, who are still trying to keep the mine in the hands of Malik."

Imamuddin, one of Mr. Malik's commanders, who helped take the mine but has since had a falling-out with him, said, "There were no Taliban in the district." That rumor, said Imamuddin, who like many Afghans uses only one name, "was spread by Malik himself."

Mr. Malik, who believes in restoring local ownership of the mine, has said he led a popular uprising against outsiders exploiting it.

Mr. Malik's militia made about $18 million in 2014 and $12 million in 2015 from renting the mine to local extractors and collecting tolls on the roads, the Global Witness report said. As the Taliban have encroached on the area, he has been forced to pay them. He split the income 50-50 in the first four months of 2016, the Global Witness report said, meaning the Taliban would get an estimated $6 million for the full year.

Global Witness lists Bismillah Khan Mohammadi, who was Afghanistan's defense minister at the time of the takeover, as one of Mr. Malik's supporters. A longtime guerrilla commander with the anti-Taliban Northern Alliance, a movement that for decades tapped into the lapis trade to pay for its campaigns, Mr. Mohammadi knew the value of the mine.

If the allegation is true, it shows just how complex and counterintuitive war at the local level can be. It would mean that a former anti-Taliban political figure tasked with defending against the insurgency became involved in a scheme that brought the Taliban huge profits, making them a force in a province that had long resisted them.

Mr. Mohammadi was traveling and could not be reached for comment, said Shafiq Salangi, an aide.

"Minister Bismillah Khan was not supporting Malik; he did not support him in getting the lapis mines in Badakhshan," Mr. Salangi said. "This claim does not have logical grounds. We reject this claim."

But local commanders said Mr. Mohammadi had been one of the first people Mr. Malik contacted after seizing the mine.

"Commander Malik called Bismillah Mohammadi to assure him that the mine was taken over, and that no one had been killed and that he would follow orders from him," Imamuddin said.

Lajwardeen hopes to reclaim the mine one day. In the meantime, it is buying lapis — from Mr. Malik's militia.

[Source: By Mujib Mashal, International New York Times, Kabul, 05Jun16]
Bookshop Donate Radio Nizkor

War in Afghanistan & Iraq
small logoThis document has been published on 08Jun16 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.