Conflict Minerals

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: 230 (as of August 1st, 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/publication/analysis-interactive- map-artisanal-mining- areas-eastern- dr-congo- 2/

[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.

New Comprehensive Study - "A Criminal State: Understanding and Countering Institutionalized Corruption and Violence in Congo"

Enough's new comprehensive study reveals how the Democratic Republic of Congo is not a failed state—for everyone. It is a failure for the vast majority of Congolese who suffer from abysmal security, healthcare, and education services. However, it is an efficient state for ruling elites and their commercial partners who seek to extract or traffic resources at the expense of Congo’s development. Over the past 130 years, Congo has had many elements of violent kleptocracy, a system of state capture in which ruling networks and commercial partners hijack governing institutions and maintain impunity for the purpose of resource extraction and for the security of the regime. Violence has been the systemic companion of these regimes.  This study argues that President Kabila and his close associates rely in large part on theft, violence, and impunity to stay in power at the expense of the country’s development. If international policymakers are to have a real impact in helping Congolese reformers actually reform the system, they need to shift the lens through which they view the conflict.  Read More »

U.S. House Votes to Undermine Transparency and Conflict-Free Supply Chains in Democratic Republic of Congo

Date: 
Jul 7, 2016

Rep. Huizenga's Appropriations Amendment Seeks to Defund Critical SEC Conflict Minerals Enforcement

Efforts to support peace, corporate accountability, and transparency in the Democratic Republic of Congo faced a setback today, as the House of Representatives passed an amendment introduced by Rep. Bill Huizenga (R-MI) to defund implementation of the Security Exchange Commission (SEC)’s rule to address conflict minerals. 

The 11th-hour amendment, added to a larger financial services appropriations bill, states that no government funds can be used to enforce the SEC’s conflict mineral rule pursuant to Provision 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Defunding this provision would undermine years of progress that has been made by companies, private sector initiatives, and regional governments to support conflict-free minerals sourcing from Congo.

Sasha Lezhnev, Associate Director of Policy at the Enough Project, said: “The conflict minerals provision in Dodd-Frank has spurred major progress in starting rule of law in Congo's minerals sector and helping make the majority of tin, tantalum, and tungsten mines conflict-free. Before the law was passed, armed groups and their sponsors profited hand-over-fist from the minerals trade, but today 70% of surveyed 3T mines are conflict-free. It's time to focus on addressing the gaps -- particularly conflict gold and artisanal miners' livelihood programs -- instead of moving backwards and undermining the law, as proposed by Rep. Huizenga’s amendment.”

Many Congolese communities and leaders support Dodd-Frank 1502 because they have seen direct positive impacts, because they believe in transparency and the rule of law, or both. Additionally, major corporations such as Intel, KEMET, and Apple have embraced these regulations and used them as a catalyst to reform their own supply chains and deliberately source conflict-free minerals. Rep. Huizenga’s proposed amendment would unravel years of work that has led to significant positive developments continuing to build both in Congo and within corporate supply chains.

Holly Dranginis, Senior Policy Analyst at the Enough Project, said: “The defunding of section 1502 in today's bill is an attempt to halt momentum toward corporate transparency and responsible sourcing. It ignores real progress in eastern Congo, where people once beset by brutal violence have said their lives are safer since 1502 and related reforms have come to be. This fight is not over - the Senate should send a clear message that corporate executives cannot turn a blind eye to where their minerals come from by voting no on this amendment.”

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. 69 percent of the world’s smelters for the four minerals, the choke points in minerals supply chains, have now passed conflict-free audits (223 smelters in total). In 2015, 948 tons of conflict-free tantalum was exported from eastern Congo -- a 19 percent increase over the 2014 record, and a 387 percent increase over 2013.

Brad Brooks-Rubin, Director of Policy at the Enough Project, said: “Section 1502 has prompted many companies to take concrete and positive steps to improve their supply chain sourcing practices.  In particular, companies in many sectors now implement stronger due diligence practices to ensure their supply chains are conflict-free, and they can demonstrate this to their customers and an increasingly socially conscious consuming public.  Having survived a vigorous court challenge, Section 1502 must remain fully funded and enforced so that these gains can be leveraged and expanded.”    

For more information about the impact of Dodd-Frank 1502:  http://eno.ug/1iCJiVj

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 policy group, seeks to build leverage for peace and justice in Africa by helping to create real consequences for the perpetrators and facilitators of genocide and other mass atrocities. Enough aims to counter rights-abusing armed groups and violent kleptocratic regimes that are fueled by grand corruption, transnational crime and terror, and the pillaging and trafficking of minerals, ivory, diamonds, and other natural resources. Enough conducts field research in conflict zones, develops and advocates for policy recommendations, supports social movements in affected countries, and mobilizes public campaigns. Learn more – and join us – at www.EnoughProject.org

Over 1,200 Companies File Conflict Minerals Reports with the SEC

Elm Sustainbaility Partners LLC has been tracking the 2016 SEC conflict minerals reports.  Read More »

Companies File Third Round of Conflict Minerals Reports, SEC, Government Agencies Must Follow Through

May 31st marks the third annual deadline for electronics, manufacturing, and other companies to file conflict minerals reports with the U.S. Securities and Exchange Commission (SEC), as part of their obligation under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. With three years of reporting now completed, the SEC must follow through on its responsibility to hold companies accountable for the content of these reports by ensuring that companies have filed complete and accurate reports that meet regulatory requirements.  Read More »

Number of Certified Conflict-Free Mines in Congo Increases by 31%: 204 Mines Certified

The number of officially certified conflict-free mines in eastern Democratic Republic of Congo has increased by 31% since June 2015, according to recent data from the German Federal Institute for Geosciences and Natural Resources (BGR) and Congo's Mining Ministry. Multi-stakeholder teams made up of business persons, government officials, and civil society members have validated that 204 mines in eastern Congo are now free of armed groups, the military, and the worst forms of child labor.  Read More »

Companies File Third Round of Conflict Minerals Reports, SEC, Government Agencies Must Follow Through

Date: 
May 26, 2016

 

May 31st marks the third annual deadline for electronics, manufacturing, and other companies to file conflict minerals reports with the U.S. Securities and Exchange Commission (SEC), as part of their obligation under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. With three years of reporting now completed, the SEC must follow through on its responsibility to hold companies accountable for the content of these reports by ensuring that companies have filed complete and accurate reports that meet regulatory requirements. 

The reporting requirement impacts all companies publicly traded in the United States with products containing any of the four conflict minerals: tin, tungsten, tantalum, and gold.

Dodd-Frank 1502, the corresponding SEC Conflict Minerals Rule, and the OECD Due Diligence Guidance are important transparency measures to help stem the flow of conflict minerals from eastern Democratic Republic of the Congo (Congo), where over 5.4 million people have died since 1993 as a result of armed conflict. These measures are one part of a comprehensive approach to addressing this issue. Other policy steps on governance are also needed to end the conflict, grand corruption, and wider repression in Congo.

Since the first filing deadline in 2014, there has been steady progress both in supply chain management and impact on armed group funding in Congo. Today, 216 out of approximately 324 smelters and refiners worldwide (67 percent) have passed conflict-free audits and an additional 50 smelters/refiners are in the process of being audited, for a total of 266 participating companies (82 percent).  These audits are a crucial step towards ensuring conflict-free supply chains. Additionally, a 2014 independent study by the International Peace Information Service (IPIS) found that 70 percent of tin, tungsten, and tantalum mines surveyed in eastern Congo were no longer controlled by armed groups, and 204 mines in Congo are now officially certified as conflict-free.

Sasha Lezhnev, Associate Director of Policy at the Enough Project, said: “Dodd-Frank Section 1502 is increasing the rule of law in a previously conflict-rife minerals trade in Congo and the region, helping to make 70% of tin, tantalum, and tungsten mines conflict-free, as IPIS found. Several companies such as Intel, Apple, and Ford are leading the way to implement the law and go beyond, demanding increased transparency from suppliers and traders – a far cry from the pre-Dodd-Frank era of zero supply chain transparency. However, some companies are still choosing to do next to nothing to show that they actually investigated their supply chains to know whether or not there are conflict minerals in them. That must change.”

Brad Brooks-Rubin, Director of Policy at the Enough Project, said: “It is time for the SEC to follow through on company compliance on conflict minerals. Not all companies are doing proper due diligence and taking this regulatory reporting requirement seriously. In order for there to be meaningful industry-wide change, the SEC must take steps to demonstrate that companies will be held appropriately accountable for the content of their reports.”

Annie Callaway, Advocacy & Activist Manager at the Enough Project, said: “Through the Conflict-Free Campus Initiative, dozens of schools, cities, and states across the country and internationally have implemented policies that alter their procurement structures to favor companies that are working to become conflict-free. These entities, as well as consumers and investors more broadly, rely on accurate conflict minerals reports in order to make informed purchasing decisions and evaluate whether product supply chains directly or indirectly fund armed violence in Congo.” 

Companies and governments, both in the West and in Central Africa, must take further steps in addition to the SEC reporting requirement to help end the conflict minerals trade in Congo. Companies should urge their suppliers to source from conflict-free mines in Congo, and commit resources to livelihoods support for Congolese mining communities. The U.S. and European governments should provide additional funding to the minerals certification system in the region, in particular to the Independent Mineral Chain Auditor of the International Conference on the Great Lakes Region (ICGLR); they must also pressure the Congolese government to hold elections on time in accordance with Congo’s constitution. However, Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the corresponding Conflict Minerals Rule establish an important baseline for transparency that must be enforced in order to remain effective. 

For media inquiries or interview requests, please contact: Megha Swamy, Media Relations Specialist, +1 202 478 5323mswamy@enoughproject.org.

About THE ENOUGH PROJECT
The Enough Project, an atrocity prevention policy group, seeks to build leverage for peace and justice in Africa by helping to create real consequences for the perpetrators and facilitators of genocide and other mass atrocities. Enough aims to counter rights-abusing armed groups and violent kleptocratic regimes that are fueled by grand corruption, transnational crime and terror, and the pillaging and trafficking of minerals, ivory, diamonds, and other natural resources. Enough conducts field research in conflict zones, develops and advocates for policy recommendations, supports social movements in affected countries, and mobilizes public campaigns. Learn more – and join us – at www.EnoughProject.org

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Apple Steps Up on Conflict Minerals

Date: 
Mar 31, 2016

 

Tech giant’s firm but fair measures with suppliers and investigations in eastern Congo are key steps in the right direction to fight the deadly trade. Enough Project highlights where Apple could take next steps.

This week, Apple released a new report that revealed the company had taken several groundbreaking steps to combat the deadly in trade in conflict minerals. Four minerals used in electronics, jewelry, and other products – gold, tin, tantalum, and tungsten – have helped fund armed conflict in the Democratic Republic of Congo, in which over 5.4 million people have died since 1994. 

Enough Project experts are available for comment and analysis on Apple’s new report. The Enough Project has been monitoring Apple’s work on conflict minerals since 2009.

Sasha Lezhnev, Associate Director of Policy at the Enough Project, said: “Apple's new supplier report is a model for how companies should be addressing conflict minerals. Apple's tough love with its suppliers is critical to solving the problem of deadly conflict minerals -- it offered assistance to suppliers but then took the difficult step of cutting out those who were unwilling to undergo an audit. Firm but fair follow-through by tech and other companies with their suppliers is a key step that's needed to cut off global markets for conflict minerals.”

Brad Brooks-Rubin, Director of Policy at the Enough Project, said: “We appreciate Apple's commitment to issuing an honest and thoughtful reflection on the progress it has made as a company and that conflict-free initiatives have made to date overall.  We agree strongly with Apple's assessment that it will "take the contributions of many different stakeholders to effect lasting change in the minerals sector of the Region" and encourage others to work with Apple and other leaders to do just that.”

Apple’s detailed report highlighted that 100% of the smelters in the company’s supply chain were participating in third-party independent audits on conflict minerals issues. That is an industry first. The company also conducted deeper investigations into tin, tantalum, and gold supply chain issues in eastern Congo and the surrounding region, in particular of incidents in the iTSCi traceability and due diligence system and the Dubai-based gold refiner Kaloti.

Lezhnev added: “Apple’s deeper investigations and push to the tin industry to make it more transparent about incidents in its iTSCi traceability system are critically important steps. The tin industry has responded by improving some of its reporting, but much work remains to be done. Following up, Apple and other leading tech and jewelry companies should press the Congolese government to improve its system to approve mines as conflict-free and have its state-owned companies be independently audited. A push from industry could help reduce rampant corruption in Congo.”

Apple offered more detail in its Conflict Minerals Report to the Securities and Exchange Commission than the vast majority of company reports on this issue. Intel, Signet Jewelers, and Ford have also provided transparent, detailed reports on due diligence in the recent past. The openness of this reporting and due diligence that the company conducted are welcome and should be emulated by other companies – over 1,300 companies report to the SEC on this issue. Going forward, Apple should also set up direct sourcing initiatives in Congo to purchase conflict-free gold and other minerals, and support livelihood projects for artisanal mining communities.

Link to Apple’s report: http://www.apple.com/supplier-responsibility/progress-report

Link to Apple’s SEC filing: http://www.sec.gov/Archives/edgar/data/320193/000119312516523320/d168894dex101.htm

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 policy group, seeks to build leverage for peace and justice in Africa by helping to create real consequences for the perpetrators and facilitators of genocide and other mass atrocities. Enough aims to counter rights-abusing armed groups and violent kleptocratic regimes that are fueled by grand corruption, transnational crime and terror, and the pillaging and trafficking of minerals, ivory, diamonds, and other natural resources. Enough conducts field research in conflict zones, develops and advocates for policy recommendations, supports social movements in affected countries, and mobilizes public campaigns. Learn more – and join us – at www.EnoughProject.org.

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