Section 1502 of the Dodd-Frank Consumer Protection and Wall Street Reform Act -- "the conflict minerals" clause -- has attracted controversy concerning its effects on the ground in Democratic Republic of the Congo (DRC) and the broader region whose conflicts the law intends to allay. Section 1502 was never intended as a stand-alone policy to bring peace and prosperity to Congo after two decades of conflict. The law has resulted in unintended consequences that must be addressed directly and urgently, yet the law has become a positive catalyst for change in the African Great Lakes.
The central criticism of the law is that it promotes an embargo -- or at least steep price cuts -- on minerals from the region. It is true that individuals and local economies have felt the sting of western companies' policies to require minerals that come from Congo, Rwanda, and the region to prove that they originate from conflict-free mines.
This obstacle must be overcome to break the link between minerals trade and war. There is a significant reform process that is beginning to transform the minerals trade in Congo and move the region from a war economy to a peaceful trading zone. But we must not stop there -- we also must join forces to help those temporarily displaced by the journey toward a stable and economically attractive Congo.
These challenges are starting to be addressed by forward-thinking companies, international donors, civil society, and governments. Collaborative groups like the Public Private Alliance for Responsible Minerals, the Conflict-Free Sourcing Initiative (CFSI) * and the DRC Multi-Stakeholder Group .
There are real signs of progress on the ground: for the first time ever, DRC has validated 125 mines as conflict-free**, and the plan is to triple that number over the next year, with funding from a U.S. government-supported project. In stark contrast to five years ago, three-quarters of the miners of tin, tantalum, and tungsten are now working in areas free of armed groups, according to a recent independent study ***. Those minerals were previously major sources of income for warlords such as Bosco Ntaganda "The Terminator" who is now on trial for war crimes. While the illicit gold trade is still a significant problem, the law has already helped to make life safer for thousands of people.
Another benefit of the law is supply chain transparency. Each of the 1,315 companies that reported on conflict minerals last year under Dodd-Frank rules mapped its supply chain all the way back to mineral smelters, the critical choke point in supply chains. As of December 7, 2014, 125 smelters have gone through rigorous CFSI conflict-free audits. As a result, companies not only have a better understanding of their supply chains, they now have the capacity to responsibly manage mineral sourcing decisions. Public reporting has also inspired a new level of conscious consumerism. While conflict minerals was once an obscure issue, conflict-free electronics and jewelry are now being marketed.
But more must be done. The Congolese, Rwandan, and regional governments must implement good governance at all levels of the mining sector and expand minerals certification. Donors including the World Bank, European Union, and others must contribute much more to livelihood projects in mining communities. Businesses must support responsible sourcing from the region. Investors must communicate responsible mineral sourcing expectations to companies in their portfolios and invest in the region. Civil society must oversee the progress and play the whistleblower when needed.
With a coordinated, focused approach among all stakeholders, Dodd-Frank will fulfill its potential of diminishing conflict while building a viable minerals sector in Congo that will assure its economic success.This piece was written by Representatives of the DRC Multi-Stakeholder Group:
- Tim Mohin, Director of Corporate Responsibility, AMD and Chairman, Electronic Industry Citizenship Coalition (EICC)
- Bennett Freeman, Senior Vice President of Sustainability Research and Policy, Calvert Investments
- Patricia Jurewicz, Director, Responsible Sourcing Network
Additional sources cited above include:
*CFSI is an initiative of the Electronic Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI)
**In November 2014 at the OECD meeting in Kinshasa, DRC, representatives from the Congolese Ministry of Mines stated that 125 mines have been validated as conflict-free.
***With contributions from Congolese mining cadastre (CAMI), mining service SAESSCAM, and representatives from local civil society organisations, European NGO IPIS visited mines an analyzed the security situation throughout the DRC. Results were published as a report and an interactive map in May 2014.