The diamond mining giant last year launched a probe after identifying suspicious fronting incidents, with initial findings confirming three cases. After recognising the severity of the issue, it engaged a consultant to conduct a comprehensive review and provide detailed reports on these matters, while ensuring that appropriate action is taken where necessary. Preliminary findings from the consultant confirmed that fronting was indeed prevalent within the company’s procurement processes. Of the 12 companies suspected of fronting and subsequently investigated, six were found guilty of the practice and have since been blacklisted.
The Minister of Minerals and Energy, Bogolo Kenewendo, told Parliament recently that Debswana has acknowledged fronting as a significant risk to its operations. As a result, she said, the company has implemented a robust governance framework to detect and prevent such unethical practices. “While no system is entirely foolproof, Debswana continues to enhance its assurance mechanisms to swiftly identify and address policy violations,” she said. Kenewendo added that beyond enforcing compliance, the company remains focused on strengthening due diligence within its supply chain. Additionally, to counter emerging fronting tactics, the diamond miner has appointed a consultant to further tighten oversight in tender award processes. Debswana had earlier estimated that up to 90% of diamond mining contractors under its Citizen Economic Empowerment Programme (CEEP) were fronting for private sector players outside the country. At the core of its procurement strategy is the CEEP, which aims to support citizen-owned businesses. Launched in 2007 and refined in 2019, the programme has significantly expanded opportunities for local entrepreneurs. Over the past four years (2020 to 2024), Debswana spent P23.56 billion on citizen-owned businesses, surpassing its initial P20 billion target. This investment accounts for 50% of the company’s total procurement spend. Currently, 3, 116 suppliers are registered in Debswana’s database, with 73% (2, 262) being citizen-owned companies.
On average, 700 citizen businesses transact with Debswana annually, benefiting from procurement opportunities. Additionally, 200 companies have received capacity development training, while 145 suppliers have gained access to financing through Debswana’s partnerships with local financial institutions. To further empower citizen suppliers, Debswana signed Memoranda of Understanding (MoUs) with banks in 2020, securing P4.7 billion in funding. As of December 2024, P1.8 billion had been disbursed to support citizen-owned enterprises.
