Eastern Congo

Progress and Challenges on Conflict Minerals: Facts on Dodd-Frank 1502

 

Miners in Eastern Congo

Minerals and Conflict

Justine Masika Bihamba

"10 years ago, we were under de facto control of armed groups...today, let's admit we are a long way from that. And if we’re honest, that’s in part because of Dodd-Frank – it came to shine the light on those illicit actors. Today, despite the problems with governance, you can feel more government control.Justine Masika Bihamba, Coordinator of the organization Synergy of Women for Victims of Sexual Violence

Conflict minerals have fueled and continue to help sustain armed violence in eastern Democratic Republic of Congo (Congo), linking them to the deadliest conflict globally since World War II.The four conflict minerals (gold, along with the 3Ts - tin, tantalum, and tungsten) are not the only sources of income to armed groups, but they are some of the most lucrative. The illegal exploitation of natural resources today is a manifestation of the grand corruption linked to violence that has marked successive governments in Kinshasa and the broader region since colonial times.

  • The U.N. Group of Experts on Congo found in 2016 that gold provides the most significant financial benefit to armed groups”[1] and “is the most lucrative and easily smuggled of the natural resources in the eastern Democratic Republic of the Congo."[2] A study from the Enough Project found that armed groups made an estimated $185 million from conflict minerals in 2008.[3] In 2007 the Pole Institute noted “minerals are a major source of income and of conflict in North Kivu as in the whole of the DRC,”[4] 

  • A mortality study by the International Rescue Committee looking at conflict-related deaths between August 1998 and April 2007 estimated that more than 5.4 million people died as a result of armed conflict in Congo.[5] There has been continuing violence since that study, but no definitive follow up has been conducted on the mortality toll.

 

The Law

Dr. Denis Mukwege

"A conflict-free minerals industry would contribute to ending the unspeakable violence the people of Congo have endured for years.” Dr. Denis Mukwege, Founder and Medical Director of Panzi Hospital

Section 1502 on conflict minerals of the Dodd-Frank Wall Street Reform and Consumer Protection Act is a transparency measure, one part of a comprehensive approach to Congo’s challenges. Passed in 2010 and implemented by the U.S. Securities and Exchange Commission in 2012, it creates a reporting requirement for all companies publicly traded in the United States with products containing any of the four conflict minerals. This creates a lever to support transparency, security, and the rule of law in the mining sector. Companies must now publicly disclose annually whether any of the gold or 3Ts in their supply chains originated in Congo or a neighboring country and, if so, describe the due diligence measures taken to determine the source of the minerals. Dodd-Frank 1502 does not require companies to divest from Congo or source from conflict-free mines. The law only requires companies to report on their mineral sourcing and due diligence practices.

  • The cost of compliance has been significantly overestimated by industry lobbyists. Claigan, an independent environmental consulting firm with expertise in supply chain management, estimates the total cost of Dodd-Frank 1502 compliance was approximately $140 million for 2014.[6] This is a fraction of the U.S. Securities and Exchange Commission’s estimate of $3-4 billion for the first year.[7]​​

“In 2014, we educated suppliers who mistakenly believed that CFSP-compliant smelters are, by definition, not sourcing from the Covered Countries, or whose conflict minerals policies indicated that they intend not to source from the Covered Countries at all.” – EMC Corporation (Source: Conflict Minerals Report 2014)

Impact

Consistent with its objective, Dodd-Frank 1502 along with related reforms has led to significant improvements in the transparency of corporate supply chains and to a major reduction in the number of 3T conflict mines in eastern Congo. More than 70 percent of the world’s smelters for the four minerals have now passed conflict-free audits.  Before Dodd-Frank 1502, there was no certification mechanism for distinguishing conflict mines (i.e. mines controlled by armed groups or the Congolese army) from conflict-free mines, and there were no federal transparency requirements for companies on conflict minerals. The law and related reforms have changed these circumstances and created a two-tier market whereby the price for untraceable 3T conflict minerals is significantly lower than the price for verified conflict-free minerals. This price difference has made the trade in 3T minerals significantly less lucrative for armed groups.

 

PROGRESS

 

 

Number of conflict free mines: 204 (as of April 2016)

 

 

Number of refiners that have passed audits: 242 (as of December 5th, 2016)

 

  • As of 2016, the International Peace Information Service (IPIS) found that over three-quarters (79
    percent) of 3T miners surveyed in eastern Congo were working in mines where no armed group involvement has been reported.[8] This is a significant change given that the U.N. Group of Experts stated as recently as 2010 that “in the Kivu provinces, almost every mining deposit [was] controlled by a military group.”[9]
  • As of December 5th, 2016, 75 percent of smelters/refiners worldwide (242 out of 319 total) for the four conflict minerals have passed audits by the Conflict-Free Sourcing Initiative or associated programs, and an additional 24 smelters/refiners are participating in the program (i.e. are in the process of being audited) for a total of 266 participants (over 80 percent).[11]
  • There is now an emerging certification mechanism run by the International Conference on the Great Lakes Region (ICGLR), and mines have begun to be validated as conflict-free.[12] As of June 25, 2015, 141 mines in eastern Congo had been validated as conflict-free by multi-stakeholder teams made up of U.N. officials and Congolese civil society, business, and government representatives.[13]
  • In surveyed locations, “minerals that do not go through conflict-free programs sell for 30 to 60 percent less” than minerals verified as conflict-free,[14] thus reducing profits for armed group trying to sell conflict minerals.

 

"...Alcatel-Lucent does not want to prevent its suppliers from sourcing from legitimate mines located within the Democratic Republic of the Congo and its neighboring countries (as doing so could be detrimental to the legitimate economies and populations of those countries).” – Alcatel-Lucent (Source: Conflict Minerals Report 2013)

Mining Communities

Dodd-Frank 1502 must be fully implemented, not abandoned, and strengthened with livelihood projects and other support to mining communities.  As often occurs in places where black markets are disrupted by reform, Congo’s 3T mining sector is being affected by the transition to a conflict-free economy, and many miners have experienced livelihood challenges. The original conflict minerals draft legislation included resources for livelihood programs for mining communities, but unfortunately those provisions were omitted from the final law and thus resources were not forthcoming in a timely way, causing hardship for some communities. Some aid has been disbursed to support conflict-free mining, but more support for livelihoods projects is needed. The solution to uncovering and eliminating these harmful illicit markets is not to reduce transparency measures but rather to strengthen and expand them.

  • Livelihood projects should include alternative livelihoods programs and artisanal mining support. Project planning should involve concerted community consultations and decision-making, and projects should encompass microfinance programs, programs to increase women’s accessibility to mining and other livelihoods, and transition programs for child miners. Projects should also include aid for the formalization of artisanal mining—including the creation of artisanal mining zones, validation of more conflict-free mines, capacity building for mining cooperatives, provision of equipment, and development of safety standards for miners. [15]
  • Section 5 of the original “Conflict Minerals Trade Act” (introduced on Nov. 11, 2009) included provisions for livelihood support.[16] Since that time, the Enough Project has repeatedly called on the United Nations, the United States, and other governments to engage in a process of dialogue and reform in Congo that is broadly inclusive of Congolese civil society, business, and government representatives.[17]

Congolese Support

Archbishop Francois Rusengo

"Armed men have been free to exploit minerals away from any eyes. The formula for exploitation has been to attack civilians. To do that, they harm the women. When women are raped, the men are forced to flee, the children can’t survive, and the village is abandoned - then the area is free for exploitation.” Archbishop Francois Rusengo, Archbishop of Bukavu, South Kivu

Many Congolese communities and leaders—including Nobel Peace Prize nominee and Sakharov Prize winner Dr. Denis Mukwege, community activist Justine Masika Bihamba, and Archbishop François-Xavier Maroy Rusengo of Bukavu, South Kivu—support Dodd-Frank 1502. Leaders and activists support the law because they have seen direct positive impacts, because they believe in transparency and the rule of law, or both.

  • Dr. Denis Mukwege: "A conflict-free minerals industry would contribute to ending the unspeakable violence the people of Congo have endured for years. Government must not only enact strong legislation, they must be willing to enforce the law. Companies bear the responsibility of compliance and public disclosure, and acting transparently as consumers are increasingly aware of conflict-free components on the market. Tens of thousands of legitimate miners would benefit from a clean, transparent minerals industry…The mineral trade is one of the components that drive suffering in Congo.”[18]
  • Open letter signed by 31 Congolese civil society leaders, experts, and former ambassadors: “It is time for another broader push for reform on conflict minerals and natural resource governance in order to complement the Dodd-Frank legislation and deepen related minerals reforms. Dodd-Frank has been the primary driver of corporate and regional policy change on conflict minerals.”[19]

 


WATCH: Conflict Minerals Legislation - View from Eastern Congo

Congolese miners and human rights activists speak about the impact of Dodd-Frank in Congo in this video from 2012.

 

More Resources and Information

 


Citations

[1] U.N. Security Council, “Final report of the Group of Experts (2016),” S/2016/166, pg 2, May 23, 2016, available at;http://www.un.org/ga/search/view_doc.asp?symbol=S/2016/466..

[2] U.N. Security Council, “Final report of the Group of Experts (2016),” S/2016/166, para. 115, May 23, 2016, available at;http://www.un.org/ga/search/view_doc.asp?symbol=S/2016/466..

[3] The Enough Project Team and the Grassroots Reconciliation Group, “A Comprehensive Approach to Congo’s Conflict Minerals,” Appendix 2, p. 17 (Washington: April 2009), available at http://www.enoughproject.org/publications/comprehensive-approach-conflict-minerals-strategy-paper.

[4] Aloys Tegera and Dominic Johnson, “Rules for Sale: Formal and informal cross-border trade in Eastern DRC,” p. 40 (Goma: Pole Institute, May 2007), available at http://www.pole-institute.org/sites/default/files/regard19_anglais.pdf.

[5] Benjamin Coghlan, Pascal Ngoy, Flavien Mulumba, Colleen Hardy, Valerie Nkamgang Bemo, Tony Stewart, Jennifer Lewis, and Richard Brennan, “Mortality in the Democratic Republic of Congo: An ongoing crisis,” pp. ii, 16 (New York: International Rescue Committee, January 2008), available at http://www.rescue.org/sites/default/files/resource-file/2006-7_congoMortalitySurvey.pdf.

[6] Email correspondence with Claigan, August 2015.

[7] U.S. Securities and Exchange Commission, Release No. 34-67716, p. 302, August 22, 2012, available at http://www.sec.gov/rules/final/2012/34-67716.pdf.

[8] IPIS surveyed 2,026 mines. However, 64% of gold miners still work at conflict mines. “Analysis of the Interactive Map of artisanal mining areas in eastern DR Congo,” October 2016, available at http://ipisresearch.be/wp-content/uploads/2016/10/Analysis-and-map-artisanal-mining-DR-Congo_v005-1.pdf

[9] U.N. Security Council, “Interim report of the Group of Experts on the DRC,” S/2010/252, para. 77, p.17, May 24, 2010, available at http://www.un.org/ga/search/view_doc.asp?symbol=S/2010/252.

[10] Steven Spittaels, Ken Matthysen, Yannick Weyns, Filip Hilgert and Anna Bulzomi, “Analysis of the interactive map of artisanal mining areas in Eastern DR Congo: May 2014 update” (Antwerp: International Peace Information Service, May 2014), available at http://ipisresearch.be/wp-content/uploads/2014/04/20141031-Promines_analysis.pdf.

[11]  “Conflict-Free Smelter Program Indicators,” available at http://www.conflictfreesourcing.org/members/active-and-compliant-smelter-count/ (last accessed December 5, 2016).

[12] International Conference on the Great Lakes Region Mineral Certification Scheme, “ICGLR Regional Certification Mechanism (RCM) Certification Manual,” available at http://www.oecd.org/investment/mne/49111368.pdf (last accessed August 2015).

[13] Uwe Naeher and Yasmine Nzuma, “Summary of Joint Missions and CTC Mine Site Audits in Eastern DRC,” Federal Bureau of Geosciences and Natural Resources (BGR), Kinshasa, June 2015.

[14]  Fidel Bafilemba, Timo Mueller, and Sasha Lezhnev, “The Impact of Dodd-Frank and Conflict Minerals Reforms on Eastern Congo’s Conflict,” endnote 5, p. 20 (Washington: The Enough Project, June 2014), available at http://www.enoughproject.org/reports/impact-dodd-frank-and-conflict-minerals-reforms-eastern-congo’s-war.

[15] Fidel Bafilemba and Sasha Lezhnev, “Congo’s Conflict Gold Rush: Bringing gold into the legal trade in the Democratic Republic of Congo,” pp 15-17 (Washington: The Enough Project, April 2015), available at http://www.enoughproject.org/reports/congo%E2%80%99s-conflict-gold-rush; Holly Dranginis, “Doing Good, while Doing Well: Is There a Win-Win Formula for Investing Responsibly in Congo’s Minerals Sector?” pp. 5, 7 (Washington: The Enough Project, July 2014), available at http://www.enoughproject.org/reports/doing-good-while-doing-well.

[16] Conflict Minerals Trade Act, H.R.4128 111th Congress (2009-2010), section 5, “Sense of Congress on Assistance for Affected Communities and Sustainable Livelihoods,” available at https://www.congress.gov/bill/111th-congress/house-bill/4128/text?q=%7B%22search%22%3A%5B%22conflict+minerals+trade+act%22%5D%7D.

[17] The Enough Project Team and the Grassroots Reconciliation Group, “A Comprehensive Approach to Congo’s Conflict Minerals”; John Prendergast and Sasha Lezhnev, “Opinion: Electronics companies and consumers can help stop Congolese bloodshed,” San Jose Mercury News, July 28, 2009, available at http://www.mercurynews.com/opinion/ci_12931613; Enough Project, “Conflict Minerals: A Broader Push for Reform is Essential,” available at http://www.enoughproject.org/special-topics/conflict-minerals-broader-push-reform-essential.

[18] Panzi Foundation, “Statement from Dr. Denis Mukwege: EU Vote is a Victory for Human Rights,” May 20, 2015, available at http://www.panzifoundation.org/news/dr-mukwege-statement-eu-conflict-minerals-vote.

[19] “Open Letter: Conflict Minerals: A Broader Push for Reform is Essential,” October 30, 2014, available at http://www.enoughproject.org/files/OpenLetterConflictMinerals_October_2014.pdf.

Eastern Congo

Over 5.4 million dead. Over 2 million displaced. Congo is home to the deadliest conflict since World War II.

The war in eastern Congo began in the early 1990s and continues to this day. It has encompassed two international wars—from 1996 to 1997 and 1998 to 2003—and multiple invasions from neighboring countries, with combatants from many armed groups, both foreign and domestic. While Congo has abundant natural resources, it is also the world’s poorest country per capita, according to the United Nations. Congo is also home to the largest and most expensive U.N. peacekeeping mission in the world, MONUSCO, which has more than 20,000 personnel and an annual budget of $1.4 billion. The eastern part of the country is plagued by instability, as militias continue to wreak havoc on the population. Meanwhile, the conflict gets very little coverage by the international media.

The conflict in Congo is notorious for serious violations of human rights, including violence against women and the use of child soldiers. Since 1996 the International Rescue Committee has calculated that approximately 5.4 million people have died from war-related causes. In 2012 Congo ranked lowest on the United Nations Human Development Index.

Armed GroupsArmed Groups

Armed groups wreak havoc in eastern Congo by terrorizing communities and fighting for power and access to mineral resources. Read More

Conflict MineralsConflict Minerals

Armed groups and Congolese military use profits from trading in conflict minerals to self-finance campaigns of brutal violence against civilians. Read More

Justice and AccountabilityJustice and Accountability

Congo needs a system of justice and accountability by which perpetrators of atrocity crimes are caught, tried, and punished for their crimes. Read More

Security Sector ReformSecurity Sector Reform

Congolese security forces pose a significant threat to civilians. In eastern Congo, they commit murder and rape, and carry out torture and extortion. Read More

Congolese WomanSexual Violence

Every day, women and girls face threats from armed militias, the military, and even the police who are responsible for protecting them. Read More

Sustaining LivelihoodsSustaining Livelihoods

As Congo's mining industry transitions from conflict minerals trade to legitimate business, miners need help transitioning to other sustainable sources of livelihood. Read More

 

Help end the crisis in eastern Congo: Take action now. 

Stay updated on Eastern Congo: Read the latest reports.

Enough Project Statement on U.N. Investigators Killed in the Democratic Republic of the Congo

The Enough Project is deeply saddened by the deaths of United Nations Group of Experts investigators Michael Sharp and Zaida Catalán and their interpreter, Betu Tshintela. Their driver, Isaac Kabuayi and two unidentified motorbike drivers traveling with the group are still missing. We extend our condolences to all of their families and colleagues.  Read More »

Enough Project Statement on U.N. Investigators Killed in the Democratic Republic of the Congo

Date: 
Mar 29, 2017

 

The Enough Project is deeply saddened by the deaths of United Nations Group of Experts investigators Michael Sharp and Zaida Catalán and their interpreter, Betu Tshintela. Their driver, Isaac Kabuayi and two unidentified motorbike drivers traveling with the group are still missing. We extend our condolences to all of their families and colleagues.

Michael and Zaida were essential contributors to the fight against impunity for human rights abuses and the pursuit of truth in the context of armed conflict in the DRC. Their disappearances and deaths come at a time when freedom and access for human rights investigators is increasingly limited there. 
 
The circumstances of the three deaths and related disappearances should be thoroughly and independently investigated in order to provide a clear record of events, help prevent future such circumstances, and bring perpetrators to justice. The groups of experts established for each UN Security Council sanctions program play a critical role in monitoring the integrity of these efforts.
 
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For media inquiries or interview requests, please contact: Greg Hittelman, Director of Communications, +1 310 717 0606gh@enoughproject.org.
 
About THE ENOUGH PROJECT
The Enough Project, an atrocity prevention research and policy non-profit organization, builds leverage for peace, human rights in Africa’s deadliest conflict zones by working to create real consequences for the perpetrators and facilitators of genocide and other mass atrocities. Enough, and its investigative partner The Sentry, aims to counter armed groups and violent kleptocratic regimes that are fueled by grand corruption, transnational crime and terror, and the pillaging and trafficking of ivory, gold, diamonds, conflict minerals, and other natural resources. Enough conducts field research in conflict zones, develops and advocates for policy recommendations, and mobilizes public campaigns. Learn more – and join us – at www.EnoughProject.org.

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In recent weeks, numerous American businesses have come out publicly in support of the Securities and Exchange Commission’s Conflict Minerals Rule, pursuant to Dodd-Frank Section 1502.  Read More »

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It was not long ago that central Africa was mired in its "first world war" that led to 5.4 million deaths in the Democratic Republic of Congo. Slowly and painstakingly, conflict-affected areas have started to recover. But peace is fragile, and a reversion to widespread violence is never a far-off prospect.  Read More »

The De Facto Embargo is Over: Record-High Conflict-Free Minerals Exports from Eastern Congo

Tin ore

The conflict-free minerals trade has been slowly but steadily increasing in recent years, and 2016 resulted in record-high exports from the eastern Democratic Republic of Congo once again. The North Kivu province, the most 3T-rich minerals province in Congo, exported record-high conflict-free export numbers for both tin and tantalum in 2016. This counters the claims that Dodd-Frank 1502, often referred to as the conflict minerals law, is leading to a de facto embargo on eastern Congo’s minerals.  Read More »

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