Flaws in the state's diamond plan
The constitutional court has upheld government’s right to regulate how small diamond miners can sell their carats, despite their plea that this infringes on their freedom to trade and get the highest prices
The profitability of small diamond producers will be squeezed by a recent constitutional court judgment affecting the way they can sell their product. According to one commentator, this is another example of how government claims to support small business and a free market but effectively puts them out of business by over-regulation. The issue dates back to a lawsuit brought in 2007 by the SA Diamond Producers Organisation (Sadpo), which represents 200-300 small diamond miners operating mainly in the Northern Cape. Sadpo objected to a newly introduced clause to the Diamonds Amendment Act, section 20A. The clause forbids anyone who does not have a licence that allows him or her to view, buy or sell diamonds from helping a licensee wherever diamonds are offered for sale (foreigners may not hold these licences). The only exception is at the Diamond Exchange & Export Centre, where foreigners can hold a temporary diamond buyer’s permit. Under the Diamonds Amendment Act of 2005, local dia...
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