MADAGASCAR: Feature - Gem industry in need of regulation

[ This report does not necessarily reflect the views of the United Nations]

ILAKAKA., 17 Sep 2003 (IRIN) - The chance discovery of sapphires in Madagascar five years ago has brought in its wake a frantic scramble for the precious stones. But there are concerns that the industry has had little regulation.

In the towns of Sakaraha and Ilakaka, in southern Madagascar's sapphire belt - believed to be the largest in the world - rows of gem shops line the road where just a few years ago there was nothing at all.

The industry has remained largely unregulated since the first prospectors discovered sapphires in 1998. One politician recently told a local newspaper that just 20 kilograms of sapphires could repay all the country's outstanding international debts.

Consequently, the Malagasy government wants to clean up the industry, regulate the trade in precious stones and, above all, ensure that Madagascar reaps the rewards of its own resources.

In May, the World Bank approved a US $32 million loan agreement to help the country manage its mineral resources more effectively.

The Mineral Resources Governance Project will be implemented by the Ministry of Energy and Mines over the next five years. Advisers from the World Bank say the project should address the problem of the country's inefficient small-scale mining methods that damage the environment and allow gems to be smuggled out of Madagascar with little economic benefit to the country.

The project aims to reduce smuggling, reform the sector's legal framework, establish administration offices close to the mines, set up a certification programme for dealers and attract more investment from the private sector.

A further effort to improve the sector is the creation of an Institute of Gemmology. The World Bank has brought in Tom Cushman, a gem dealer from the United States, as a consultant.

"One part (of the institute) will be a gemmology school which will teach a complete course, and a second part will deal with the lapidary arts - that is, cutting stones from raw pebbles into gemstones," he told IRIN.

"[Development of lapidary arts] is an area where you can really leave some added value in Madagascar. Stones here are never well cut and almost all of them are exported overseas, which provides profit in other countries, which they would really like to have here," he added.

One of the most disturbing aspects of Madagascar's gem industry has been the use of children to work in the mines. A report by the International Programme for the Elimination of Child Labour (IPEC), a branch of the International Labour Organisation, has warned that children as young as eight are being used in mines - because they can get into the cramped spaces in the mines more easily than an adult.

The report noted that children are often exposed to very serious dangers and can, for example, die of suffocation if the mine caves in.

Dominique Rakotomanga, who works for IPEC in the capital, Antananarivo, told IRIN: "This is a really big problem, especially in Ilakaka. We are trying to raise awareness about the problem, find alternative ways for the children to make a living, and ensure that they don't miss out on their education. But because of the poverty here and elsewhere, it is very tempting for them to work underground."

These findings were confirmed in Ilakaka by Mahatesa Rakotoarisoa, who works in one of the gem stalls and acts as an interpreter for sapphire dealers from Sri Lanka. "We think safety must be improved in the mines. Quite a few people who have gone down the mineshafts have been hurt. It is not good that children have to work like this. They are too young."

At only five years old, the sapphire industry is still in its infancy and gemmologists predict that there are many more sapphires to be unearthed. Madagascar is one of the poorest nations on earth, so managing this precious resource is crucial to the country's future.

[ENDS]