Europe’s conflict minerals regulation would allow a deadly trade to continue
Published on Fri, 2016-10-14 18:01
In certain countries and especially those rich in resources, the extraction and trade of minerals, gas, oil or wood are financing armed groups who commit serious violations of human rights, rather than contributing to human development. To stop this circle of suffering, the U.S. Securities and Exchange Commission passed in 2012 the section 1502 of the Dodd Franck Act, requiring U.S. and certain foreign companies to report and make public their use of so-called “conflict minerals” from the Democratic Republic of the Congo (DRC) or adjoining countries in their products. Following this legislation, companies must certify that 4 minerals (Tungsten, Tin, Tantalum and Gold, the “3TGs”) extracted in DRC and neighboring countries did not contribute to fund armed groups. Through this certification system, American consumers have stronger guarantees that their purchases of electronic products containing 3TGs did not contribute to human rights violations.
Reacting to this problem, the European Commission proposed the “conflict minerals” regulation in March 2014. The proposal was disappointing in many ways: it consisted of a self-certification system that companies could voluntarily join, and it only applied to 19 smelters and refiners based in the EU (while not covering all products entering the EU market that contain the targeted minerals). On May 20, 2015, the European Parliament (EP) strengthened the proposal by requiring all European companies manufacturing or importing components and final products containing 3TGs to check their supply chains to make sure they do not fuel conflicts or participate in human rights violations.
While EU representatives negotiating the text celebrated a political deal reached on June 15, 2016, CIDSE and its member organizations points to the weaknesses of the agreement that will limit its tangible impacts for populations living near mining areas. Despite a strong call from 150 Catholic leaders from 38 countries around the world, despiteactions taken by citizens, despite many advocacy meetings and public conferences, EU member states resisted calls for a fairly shared responsibility along the entire supply chain, and remained out of step with efforts to strengthen international standards through a coherent approach.
The current regulation takes a partial approach as only the importers of metals and raw minerals will have to check their supply chains. All other companies importing the minerals to use them within finished or semi finished products have no obligations at all. Without the important role that downstream companies have in driving change, we can only have serious concerns about the effectiveness of the regulation to meet its objective of breaking the links between minerals, trade and conflicts. The two-year review clause will thus be essential because it is likely we will see limited improvements by a small set of business actors, while communities experience continuing abuses by armed groups on a significant level due to the huge gaps left by allowing the majority of businesses to continue with a self-regulatory approach.