Human Security Centre Human Rights and International Security Research
More Recent Developments: The Dodd-Frank Act
Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act(3), which was passed by the US Congress in July 2010, is aimed at cutting down the trade in conflict minerals. Scheduled to take effect in 2014, the legislation requires US-listed companies to carry out supply chain due diligence to determine whether their products contain conflict minerals from the DRC or surrounding region. The Act does not ban or penalise the use of conflict minerals. But while it remains legal for companies to source these minerals from the DRC, they must report this to the Securities and Exchange Commission (SEC). The new law was met with stark resistance from many key actors in the industry. Together the US Chamber of Commerce, National Association of Manufacturers (NAM) and Business Roundtable mounted a legal challenge against the SEC’s final rule on section 1052. However, the plaintiffs’ arguments were rejected as ‘overinflated’ and ‘lack[ing] merit’ by Judge Wilkins in July 2013 as the Washington D.C. District Court upheld the SEC’s final rule(4).
While section 1052 has been hailed a big victory for human rights and corporate accountability by many activists, concerns have been voiced that it may actually have a detrimental impact on the people in the eastern DRC. Critics have suggested that by far the easiest way for mineral buyers to comply with the disclosure requirements in section 1052 will be to avoid completely any minerals which could have been sourced in the DRC or surrounding region. But if US companies turn away from the Congo this will impede, and possibly doom, the efforts of NGOs and ethically concerned companies who have been trying to set up tracing-systems for conflict-free minerals from the DRC(5). After all, many people in the region are dependent on the mines, the closure of which would rob them and their families of their livelihoods. There are additional concerns that other buyers, who do not have to comply with the Dodd-Frank Act, such as companies from China or India, could move in to fill the gap left by the departure of US-listed concerns, taking advantage of the situation to obtain the minerals for a lower price.
Meanwhile, the European Union has also proposed to introduce legislation with the aim of establishing a system which encourages the responsible sourcing of minerals in ‘conflict areas’. While the initial consultation period has passed, there has been a delay in the introduction of the EU Regulations and it is unclear whether and when such legislation will be enacted.
In Search of a Viable Solution
If a complete ban on the export of minerals from the DRC threatens to potentially exacerbate the situation of the local population, then how else can the problem of conflict minerals be constructively addressed? Global progress in promoting clean mineral markets depends on the availability of secure and reliable regional certification and tracing systems. In recent years significant progress has been made by multi-organisational groups in demonstrating the feasibility of sourcing verified conflict-free minerals. There are currently two pilot projects running in the DRC: the Solutions for Hope Project, which focuses on tantalum; and the Conflict Free Tin Initiative (CFTI). In partnership with the Dutch government the CFTI demonstrates how the OECD Due Diligence requirements(6) can be implemented in practice. Its pilot mine in Kalimi, South Kivu Province has so far generated more than 200 tonnes of material with an approximate value of around USD$ 1.7 million(7). In 2012, Solution for Hope started producing verified conflict-free tantalum sourced from a mine in the Northern Katanga province. A further expansion of the project to a mine in Goma, North Kivu is currently under consideration(8). In addition, the development of the Conflict Free Smelter Program (CFSM) enables companies who want to source responsibly to buy from smelters who only process conflict free minerals.
While these projects are a good starting point, guaranteeing the conflict-free status of minerals sourced in the DRC remains an incredibly difficult enterprise. Due to the unstable and dangerous conditions in the region, keeping both the military and militias out of the mine can be very challenging. In addition, the reliable certification of minerals as conflict-free remains problematic, mainly due to the short-comings of the “bag and tag” system. Employed to transport the minerals from the mines until exportation, this system is unfortunately vulnerable to interference by intermediate traders and other external parties. As loopholes in the monitoring of the minerals are difficult to remedy under the current regional conditions, “bag and tag” lacks the independent checks and balances that a reliable certification system needs to provide. Due to the widespread prevalence of corruption and high levels of poverty, it can be difficult to ensure the credibility of independent observers and monitoring personnel. Only the implementation of a more reliable in-region certification and tracing systems will enable companies to know with absolute certainty that the minerals they are buying from the regions are really conflict-free.
Where to now?
Even though change is forthcoming, it still has a very long way to go. While it is not yet possible to buy guaranteed conflict-free electronics, the Enough Project has ranked the largest electronic companies on their efforts towards using and investing in in conflict-free minerals in their products(9). As consumers, everyone can play an active role in making more responsible purchasing decisions, as well as in demonstrating an increased consumer demand for ethically-sourced electronic products. While it is true that the conflict mineral problem is only one aspect of the conflict in the DRC, overlying a host of other deep-rooted problems tackling it will set the country on the path to a considerably better future. But as long as there is no change in attitude by those who profit from the exploitation of its natural resources, local war lords, corrupt governments, as well as western companies, the end users of conflict minerals and their customers, the Democratic Republic of Congo is likely to remain a largely lawless space where a human life has little to no value.
Eva Brockschmidt is contactable at:
Eva.Brockschmidt@hscentre.org
Please cite this article as:
Brockschmidt, E. (2014) ‘How Cell Phones Help Fund Civil Wars: Conflict Minerals in the Democratic Republic of Congo’. Human Security Centre, Human Rights and Conflict Resolution, Issue 1, No. 3.
