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Resource Page - Conflict Minerals: A Broader Push for Reform is Essential

Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act has been a primary driver of corporate and regional policy change on conflict minerals in the Democratic Republic of Congo (Congo), helping create an economic incentive for ending exploitative mining practices and reforming the region’s minerals sector. However, Dodd-Frank 1502 is only one component in a broad set of peacebuilding tools, and it must be accompanied by other initiatives to advance development of a responsible minerals trade that improves the livelihoods and security of people living in eastern Congo. These changes toward peace must include government and corporate responses, programs directly supporting the livelihoods of community members in eastern Congo, and full implementation of the regional peace agreement known as the Peace, Security and Cooperation (PSC) Framework in a way that is truly inclusive of those most affected by it.

This resource page is designed to provide an update on the efforts to end the conflict minerals trade that finances numerous brutal armed groups in eastern Congo, note remaining challenges, and suggest strategies for encouraging lasting peace.

For more information, please see the additional resources below - and check out the letter published by Congolese civil society members here and joint open letter here.

Background

For nearly two decades, the war and widespread illicit exploitation of natural resources in eastern Congo has subjected Congolese citizens to a humanitarian crisis that desperately needs to be addressed. Broad reform of the minerals sector is part of a comprehensive strategy to end violence in eastern Congo, and Dodd-Frank 1502 is one catalytic component of that effort.

As part of the wider Wall Street reform effort, Dodd-Frank 1502 ordered the Securities and Exchange Commission (SEC) to develop a rule that requires companies to find out where their minerals come from. The rule, adopted in 2012, aims to interrupt long-standing practices of supply chain opacity, replacing them with mandatory corporate transparency, due diligence, and public awareness about four minerals that are known to fuel unspeakable violence in Congo and the surrounding region. The law has provided an economic incentive for change, which has led to increased security for many mining communities once directly controlled or terrorized by armed groups.

However, governments, donors, and companies have yet to deliver or finalize many of the other critical reforms necessary to end the conflict minerals trade.

Three main areas of reform are needed:

  1. Livelihood programs for mining communities
  2. Increased transparency and due diligence
  3. Governance and mining reforms in Congo and the region
     

Without attention to these three categories, Dodd-Frank 1502 and any other complementary initiatives to end the conflict minerals trade in eastern Congo will be incomplete.

Livelihood Projects for Mining Communities

Dodd-Frank 1502 is making it less profitable for armed groups to illegally trade minerals in Congo and the region, helping begin the shift of the economic environment in eastern Congo and the region away from benefiting armed groups and towards creating incentives for a peaceful trade. Although miners who worked in conflict mines were subject to immense harassment, debt slavery, and attacks by armed groups and military officers, the shifts away from conflict mining also mean that many miners have had to move to other areas to try to earn a livelihood, while the responsible minerals trade slowly develops. From the beginning, human rights and mineral reform advocates have called for livelihood programs for these miners to complement Dodd-Frank 1502, but the programs have been too slow in coming to the ground in Congo. They must be boosted now. This includes:

  • Increasing capacity-building and micro-finance programs for artisanal mining cooperatives in eastern Congo
  • Finalizing reforms to the minerals sector
  • Respecting the rights of artisanal miners and ensuring they are given access to a legal, profitable market for their minerals
  • Significantly enhancing programs to develop alternative sources of income, such as high-value agriculture

Some donors have set up programs, like USAID’s $20 million community recovery project, its $5.8 million Capacity Building for a Responsible Minerals Trade project, and the World Bank’s $79 million “Eastern Recovery Project.” These are helpful starts, but they have yet to be felt by many mining communities that deserve more support. Much more must be done in this area.

Increased Transparency and Due Diligence in Tin, Tantalum, Tungsten, and Gold Supply Chains

The International Conference on the Great Lakes Region (ICGLR) has spearheaded a new regional minerals certification process. Certification is a means to the goals of transparency, compliance, and rule of law. The process has been slow and must advance with more expediency for Congo to see outside investment and experience benefits on the ground.

Retail companies are increasingly engaged in developing positive supply chain management tools, joining multi-stakeholder groups to advance the tools and policies for conflict-free minerals sourcing, and taking an increasing interest in supporting peace in the Great Lakes region. This evolution is largely due to Dodd-Frank 1502’s disclosure requirements and has positive implications for numerous industries and minerals-rich regions around the world.

Governance and Mining Reforms in Congo and the Region

Governance reform in the region’s mining sector must be strengthened, and we must not lose momentum for meaningful, lasting change. Great Lakes governments, particularly Congo, Rwanda and Uganda, must be at the forefront of these efforts, but the U.S. and other governments, international financial institutions, private investors, mining companies, consumers, and other international actors all have roles to play. They should work closely with Congolese mining communities and regional stakeholders to improve mine inspections in Congo and the ICGLR minerals certification process, increase meaningful support to Congolese miners, and invest in conflict-free mines, particularly for gold.

Conclusion

In large part due to Dodd-Frank 1502 and related reform efforts, there is progress toward the development of a conflict-free minerals sector in Congo. There are laws in place to prevent multinational companies from having opaque supply chains, and an increasing number of mines are being validated as conflict-free. Dodd-Frank 1502 is only one part of the solution, but if it is undermined or dispensed with, companies will return to a climate of impunity for profiting from violent conflict and lucrative minerals will continue to enrich warlords in Congo.

Additional Resources

- Six Facts from the North Kivu Civil Society Organizations Specialized in the Sector of Natural Resources     

- Open Letter - Conflict Minerals: A Broader Push for Reform is Essential

- Expectations for Companies’ Conflict Minerals Reporting

- Understanding Conflict Minerals Provisions

- The Impact of Dodd-Frank and Conflict Minerals Reforms on Eastern Congo's War

- Conflict Minerals 101 and Conflict Gold 101 Videos

- Activist Brief - Striking Gold: Why the Illicit Gold Trade in Eastern Congo Matters

 

Understanding Conflict Minerals Provisions

The passage of provisions on conflict minerals from the eastern region of Democratic Republic of Congo (Congo) in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 has brought unprecedented attention to the linkages between trade in minerals crucial to electronics and other industries and the ongoing conflict in DRC. These provisions have been welcomed by the State Department, the Congolese government, a diverse coalition of NGOs, and by leading companies. But the passage of the legislation also raised important questions about how it will be implemented, potential unintended consequences from the law, its linkages with other initiatives to curb resource-fueled conflict, and how it fits with wider peacebuilding efforts in the DRC. Alongside these important issues, there are ripples of discontent and complaints from various industry representatives about burdensome reporting requirements, and warnings about de facto boycotts on minerals sourced in the region and massive job losses causing increased instability.

To help put these concerns in context and provide more information about Enough’s approach to conflict minerals and peace in Congo, we’ve put together this set of frequently asked questions:

What does the conflict minerals provision in the Dodd-Frank Reform bill require companies to do?

First, companies who report to the Securities and Exchanges Commission, or SEC, who manufacture products that require tin, tantalum, tungsten, or gold must report on the due diligence procedures they have in place to determine whether or not their minerals originated in Congo or a neighboring country and if they are supporting armed conflict there. Until now, many companies have relied upon assurances from their suppliers that they do not purchase conflict minerals, without independent verification. With this law, the burden of proof shifts: now companies must find out from which countries their suppliers source.

If a company finds that its minerals do originate in Congo or one of its neighbors, more reporting is required. They then must report on the measures they have taken to understand the source and chain of custody of the minerals.

Dodd Frank section 1502 is intended to combine U.S. government, private sector, activist, and consumer pressure to bolster reform efforts within the government of Congo and to reduce the presence of armed groups in the region known to have committed some of the worst human rights atrocities in history.

The instability in the eastern region of Congo continues to cause immense suffering, including staggering mortality rates, mass displacement, as well as widespread sexual violence, often used as a weapon to terrorize and humiliate communities. The illicit exploitation of natural resources contributes to this instability. By creating a system that will eliminate funding mechanisms for the belligerents, the U.S. is paving the way for legitimate and sustainable resource management that will benefit the Congolese people, the government of Congo, private sector stakeholders, and concerned consumers here in the U.S.

How is the law being implemented?

Section 1502 of the Dodd-Frank act involves a range of government actors including the SEC, the Secretary of State, the Comptroller General, and the United States Agency for International Development, or USAID. The center piece of the law is the disclosure requirement.

Companies are responsible for disclosing whether one or more of the four conflict minerals are a necessary component of their product or products. If they are and the minerals originated in Congo or an adjoining country then a company must file a report with the SEC that describes the measures taken by the company to exercise due diligence on the source and chain of custody of the minerals.

In 2011, the Secretary of State, in consultation with USAID, developed a strategy to address the link between armed groups, conflict minerals, and human rights abuses. Both organizations were also tasked with providing guidance to commercial entities seeking to exercise due diligence on the source and chain of custody of activities involving such minerals to ensure they did not directly or indirectly finance or benefit armed groups in Congo. Lastly, the Secretary of State developed a conflict minerals map that shows trade routes, mineral rich zones and areas under control of armed groups.

Over 1,000 companies filed their first reports with the SEC on June 2nd, 2014, and four had independent audits conducted. While some were very thorough in documenting their efforts, overall there is need for companies to revamp their processes in the coming year.

What are other governments and international organizations doing about this issue?

Many different governments and multilateral organizations have made statements or committed resources to breaking the link between conflict and natural resources in Congo. This includes the U.N. Security Council, which has recognized “the linkage between the illegal exploitation of natural resources, illicit trade in such resources and the proliferation and trafficking of arms as one of the major factors fuelling and exacerbating conflicts in the Great Lakes region of Africa.”

The 2010 G8 Communiqué also highlighted conflict minerals:

“The illicit exploitation of and trade in natural resources from the eastern Democratic Republic of the Congo has directly contributed to the instability and violence that is causing undue suffering among the people of the DRC. We urge the DRC to do more to end the conflict and to extend urgently the rule of law. We welcome the recent initiatives of the private sector and the international community to work with the Congolese authorities and to enhance their due diligence to ensure that supply chains do not support trade in conflict materials.”

The Organization for Economic Cooperation and Development, or OECD, is in the process of helping to develop due diligence guidelines for “managing the supply chain of key minerals from conflict-affected and high-risk areas, with particular regard to the Democratic Republic of Congo.”

Does the government in Congo support this law? Who else supports this law?

The Congolese government welcomed this law. In a statement, Minister of Information and Spokesperson Lambert Mende called it a “noble initiative.” In addition, the Catholic Church in Congo has issued a statement in support of the law, which they lobbied in support of through groups like Catholic Relief Services and the U.S. Conference of Catholic Bishops.

The bill has also been welcomed by international human rights groups, such as Amnesty International and Global Witness, as well as humanitarian groups like World Vision.

Congolese civil society organizations in North and South Kivu have expressed support for the legislation, but understandably also have questions about this legislation. Why has this happened now? How is it being implemented? How do we deal with potential unintended consequences? For these reasons it is imperative that the United States government, as well as groups supportive of the legislation, facilitate the full participation of Congolese groups in the process of implementation.

Is the conflict minerals law intended to be a "silver bullet" solution to stop all armed violence in the Congo?

Not at all. As we’ve written: “While eastern Congo is a complex crisis—fueled by tensions over land, rights, identity, regional power struggles, and the fundamental weaknesses of Congo as a state—the trade in conflict minerals remains one of the key drivers of the conflict.” Efforts to curb the trade in conflict minerals are just one component of a comprehensive policy.

How will this legislation and related reforms contribute to reducing violence in eastern Congo?

By complying with this law and ensuring that their products are conflict-free, companies will contribute to excluding armed groups and military units from their supply chains. This will not only reduce the resources available to these groups, who are among the worst human rights violators in the conflict, it will also create an incentive for minerals traders to reform their business practices and contribute to a more legitimate trade, one that would deliver more benefits to the Congolese people.

Besides compliance with the law, what additional steps can tech companies begin to take?

This legislation is just one step toward conflict-free products and a minerals trade that benefits the Congolese people. Achieving this will require a combination of companies, governments, and consumers taking action to trace, audit, and certify their minerals supply chain:

  • Trace: Companies must determine the precise sources of their minerals. We should support efforts to develop rigorous means of ensuring that the origin and production volume of minerals are transparent.
  • Audit: Companies should have detailed examinations of their mineral supply chains conducted to ensure that a) minerals are not sourced from conflict mines; and b) no illegal taxes/bribes are paid to armed groups in Congo. Credible third parties should conduct or verify these audits.
  • Certify: For consumers to be able to purchase conflict-free electronics made with Congolese minerals, a certification scheme that builds upon the lessons of the Kimberley Process will be required. Donor governments and industry should provide financial and technical assistance to galvanize this process within the International Conference on the Great Lakes Region (ICGLR).

In addition to these steps, there are other important contributions that companies should make. Electronics, jewelry and minerals companies should partner with donors to set up a miners' livelihood fund to offer real economic opportunities and help the Congolese economy through small business, microfinance and agriculture.

Can we buy conflict-free products now? Which companies are leaders and which are laggards in taking steps to rid their supply chains of conflict minerals?

In January 2014, Intel announced the creation of the first verifiably conflict-free product containing minerals from eastern DRC – a microprocessor. Other companies are also taking positive steps to clean up their supply chains, though much work remains to be done before there is truly a market available for conflict-free products.

Should companies stop buying minerals from Congo?

No. Enough is not calling for a boycott of minerals from Congo. In fact, we are advocating for more investment in the region, provided that investment occurs in a responsible manner that benefits the Congolese people. We are demanding greater transparency in supply chains and calling for companies to undertake the due diligence required to ensure they are not contributing to the conflict. The legislation does not ban Congolese minerals. International traders and refiners that have been purchasing minerals from eastern Congo may depend more on these sources than they admit and the interdependence between these multinational companies and their suppliers in Congo presents an opportunity to create greater due diligence down the supply chain.

What about Congolese miners? Will this impoverish them even further?

Ending the conflict in eastern Congo is the best way to help the Congolese people recover from more than a decade of suffering and violence. A critical aspect of this effort is severing the link between the minerals trade and the armed groups committing atrocities in Congo. But a comprehensive approach is required to improve the Congolese mining sector, one that improves livelihoods for miners and complements corporate responsibility.

Artisanal miners work in extremely difficult conditions in eastern Congo and earn an average of $1-5 per day, largely because the armed groups extract such enormous profits on the backs of their labor. The bill is meant to help industry differentiate between legal and illegal mining—which is built on brutality, extortion, and slave labor including the use of children. The State Department produced a map that shows which mines in North and South Kivu are controlled by armed groups, and the legislation mandates that this map be updated every six months. However because of the fluid nature of the conflict, it will likely require even more frequent updates.

Further, the new bill requires the Secretary of State and USAID, to develop a plan to address the link between human rights abuses and armed conflict in Congo. These measures would reinforce efforts by companies to clean up their supply chains, and help to create a new market for conflict-free minerals. A legitimate supply chain would open up the private sector in Congo to responsible operators and improve the livelihoods of artisanal miners.

Are conflict minerals too difficult for companies to identify?

No, industry is required to know what goes into its products, for quality control and health and safety reasons. Standards exist to eliminate lead paint, prison labor, and carcinogens in manufacturing. This is no different.

Some companies already have policies that they do not buy conflict minerals from conflict areas in the Congo. What is wrong with these policies?

Several electronics companies have issued statements that they ask suppliers not to source materials from conflict areas in Congo. However, these are merely written assurances that do not provide proof of where the minerals actually come from. They are not verified by any independent source. We currently have no way of knowing whether the minerals passed through the hands of armed groups in Congo or whether they came from another source. That is why we need more definitive proof, through tracing, auditing, and certifying.

Since the passage of the recent bill many industry leaders in the U.S. have shown support for the initiative and have also shown expressed concern about the unconscionable human rights abuses associated with conflict mineral extraction in Congo. The bill is not aiming to put unwarranted or undue burden on the private sector, rather asking leaders of industry to step-up to the plate and be involved in creating an effective and sustainable regulatory process in conjunction with the U.S. Government and NGOs.

Are electronics companies solely responsible for solving Congo's conflict minerals problem?

No. The Congo conflict minerals problem requires a comprehensive strategy, which must include serious policy action by the international community, the Obama Administration, the Congolese government, the UN, and NGOs - on issues of land tenure, security, governance, rule of law, and livelihoods. But electronics companies, as the main end user of minerals from Congo, bear a responsibility for cleaning up their supply chains. Our cell phones should not be fueling violent conflict. The companies have an important role to play in being part of the bigger solution.

Are there alternative sources of these minerals besides eastern Congo?

Yes. The percentages of the global supply of the 3Ts coming from Congo is relatively small, from one percent to 12 percent, depending on the specific mineral. Tantalum is temporarily much higher, at approximately 30 percent, because the largest supplier of tantalum, Australia, recently suspended production. Major alternative sources of these minerals include:

Tin: China, Indonesia, Peru, Bolivia, Brazil

Tantalum: Australia, Brazil, Canada

Tungsten: China, Russia, Canada

Gold: South Africa, Australia, the United States, China

It is important to note that the Enough Project is not calling for a ban or boycott of Congolese minerals, which would hurt miners. Instead, we encourage the development of legitimate, conflict-free mineral supply chains from Congo through the development of tracing and auditing.

What are cassiterite, coltan, and wolframite? Why do some articles talk about metals and not minerals?

Before they are processed later down the supply chain into metals, the 3Ts minerals in Congo are often referred to in their mineral ore form.

  • Tin ore = cassiterite
  • Tanatalum ore = coltan or columbite-tantalite
  • Tungsten ore = wolframite

The mineral ores are what make up the metals tin, tantalum, and tungsten. They change names once they are smelted and/or chemically processed by refining companies. To be consistent, we refer to "conflict minerals" because it is the mineral ores that fuel violence in eastern Congo.

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