A British company, DFC, that was hired by the IFC to evaluate AMSCO operations way before it entered into the agreement with River Ranch, said AMSCO had abandoned its mandate.
“AMSCO’s client base included too many companies that appeared to have little or no need for its services,” the evaluation report said. “These tended to be larger foreign-affiliated companies capable of finding their own managers and likely to provide training on their own. Too many exhibited a modest interest, if any, in the substantive services AMSCO provided and an overwhelming interest in the financial benefits AMSCO confers, particularly the tax exemptions.”
The Management seconded by AMSCO to River Ranch were paid by River Ranch through the Netherlands bank ABN-Amro but it was never clear how River Ranch paid them when it was not selling its diamonds and also in view of the foreign currency restrictions in Zimbabwe at the time.
This is what led to allegations of smuggling as River Ranch was not only able to pay its 300 workers but also said it was engaged in community projects in Beitbridge town.
The smuggling allegations were tied to two vehicles which had ordinary (yellow) number plates- AAQ9041 and AAQ9042 but were registered in the name of the UNDP, which meant that they enjoyed diplomatic status and crossed into South Africa without being searched.
The managers seconded to River Ranch by AMSCO also had diplomatic passports as they had UNDP permits and were therefore also not subject to search.
When the allegations of smuggling heated up, AAQ9041 was allegedly stolen in South Africa on 26 October 2006 but there was wide speculation that it was dumped to destroy evidence of smuggling.
The UNDP vehemently denied allegations of smuggling saying it carried out three internal investigations that cleared the organisation of the smuggling allegations. A fourth investigation was carried out by an independent expert, Frank Dutton, a former South African police officer who founded the crack Scorpions unit now renamed the Hawks. Dutton was hired by the UNDP head office in New York in July 2008 to carry out a six month investigation into the operations of the UNDP office in Harare. He completed his report in January 2009 but the UNDP refused to release the report.
“We do not share investigation reports, regardless of their outcome,” it said in a statement obtained through a Capitol Hill staffer. “This is – among other things – to preserve the due process rights and the reputation of a staff member who may have been accused of wrongdoing. Disclosure of investigators’ reports could result in irreparable harm to a person accused, but against whom no subsequent disciplinary action may be warranted”.
“UNDP has indeed investigated the accusation of collusion in diamond smuggling in Zimbabwe,” it said. “The allegations were found to be unsubstantiated. On the particular accusation that UNDP vehicles were used to smuggle diamonds, the investigation found that those vehicles were fraudulently registered in the name of UNDP.”
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