Category Archives: Coflict Minerals

Conflict Minerals 101

John Prendergast from the Enough Project lends his voice to explain the major issues facing the DRC. He answers questions such as: “How does the process work? What is the human cost? What can consumers do to help end the violence being fueled by Congo’s illicit mineral trade?”

Conflict Mineral Exposure is “Too Burdensome” for Industry

A UN peacekeeping patrol drives through the eastern Congolese city of Goma.

There was a law passed in August of 2012 mandating applicable companies to disclose information to the public that they are utilizing conflict minerals such as Gold, Tin, Tungsten, and Tantalum from areas in and surrounding the Democratic Republic of Congo. This act was put in place because of the fear that the exploitation of these minerals by various armed groups is contributing to an “emergency humanitarian crisis” in the DRC. Once the companies using these minerals have done a thorough study, it must exercise due diligence measures that comply with the Organization for Economic Cooperation and Development (OECD) and classify its mineral origin under certain categories: DRC Conflict Free, Not Been Found to Be “DRC Conflict Free”, DRC Conflict Undeterminable, Recycled or Scrap Due Diligence. More information can be found at the link below (5).

This doesn’t come into effect for companies in the United States until May 2014 and companies have already started complaining about it. A lawsuit was filed by the National Association of Manufacturers against U.S. Securities and Exchange Commission, 12-1422, US Court of Appeals for the District of Columbia Circuit (Washington). They are complaining that this conflict mineral exposure is “too burdensome.” An article from Environmental Leader: Environmental Management and Energy News identifies “solutions to conflict minerals traceability and compliance assurance.”

One option is for American companies to buy mining rights in the DRC. This way they can know precisely where they are obtaining their minerals and the methods used. Cutting out the middle man. I like it. Another option is to use technology as a way to monitor traceability, using trade compliance assurance software.

The issue of conflict minerals will never be resolved if those fueling the conflict don’t even attempt to put out the fire or are put off by the difficulty of the solution.

Companies like Apple and Boeing who have issues with the conflict mineral ruling announced they had 8 specific problems on November 26 2012. We were already aware from the previous article that this mandate would be burdensome, but they also claim it will be severely expensive as well, costing an estimated $3-4 billion upfront if they showed compliance, as well as $200 million a year. This ruling is affecting about 6,000 companies in the US, even some that aren’t very apparent, like manufacturers making footwear. The companies also state that the SEC (Security and Exchange Commision) admitted there may be little to no benefit from this ruling. The full list of issues as listed in the article are as follows:

  • Whether the Commission’s economic analysis of Rule 13p-1 and Form SD is inadequate, in violation of 15 U.S.C. § 78c(f), 15 U.S.C. § 78w(a)(2), and 5 U.S.C. § 603.
  • Whether the Commission’s refusal to adopt a de minimis exception to Rule 13p-1 is erroneous, arbitrary and capricious, or an abuse of discretion.
  • Whether the Commission’s interpretation of 15 U.S.C. § 78m(p )(2)(B) as including non-manufacturers who “contract to manufacture” products is erroneous, arbitrary and capricious, or an abuse of discretion.
  • Whether the Commission’s interpretation of “did originate” m 15 U.S.C. § 78m(p )(1 )(A) as “reason to believe . . . may have originated” is erroneous, arbitrary and capricious, or an abuse of discretion.
  • Whether the standard and requirements imposed by Rule 13p-1 ‘s “reasonable country of origin inquiry” are erroneous, arbitrary and capricious, or an abuse of discretion.
  • Whether the structure of the transition period established by the rule is erroneous, arbitrary and capricious, or an abuse of discretion.
  • Whether 15 U.S.C. § 78m(p) compels speech in violation of the First Amendment to the United States Constitution.
  • Whether the Commission otherwise acted in a manner that was arbitrary and capricious, an abuse of discretion, unlawful, or contrary to a constitutional right within the meaning of the Administrative Procedure Act, 5 U.S.C. § 706, or other applicable law in adopting Rule 13p-1 and Form SD.

Sources:

http://www.environmentalleader.com/2012/11/15/conflict-minerals-compliance-and-quality/

http://blogs.wsj.com/corruption-currents/2012/11/26/business-groups-specify-conflict-minerals-issues/

http://blogs.wsj.com/corruption-currents/2012/10/23/in-conflict-minerals-challenge-a-familiar-strategy/

photo courtesy of: http://blogs.wsj.com/corruption-currents/2012/10/23/in-conflict-minerals-challenge-a-familiar-strategy/

International Crisis Group

The International Crisis Group is an INGO that is attempting to cool disputes regarding conflict minerals in Eastern DRC.

The International Crisis Group is committed to resolving and preventing deadly conflicts around the world. They analyze potentially problematic areas and publish around 80 reports and papers every year for governments, and intergovernmental bodies, such as the World Bank, the UN, and the EU to utilize. They provide detailed information on terrorism, and mass violence that cannot be found elsewhere.

They are currently working in the Democratic Republic of Congo.

DRC

I believe that the government of the DRC is attempting to uphold the ideals of the International Crisis Group’s mission, but they may not have the resources needed to ensure compliance. The armed groups operating in and around the country are posing problems that the Congolese government, as well as other countries’ governments, are attempting to eradicate. The DRC has recently passed national laws in an attempt to prevent companies from purchasing conflict minerals that would benefit armed groups. Also, in 2012, the Congolese government passed a law to carry out supply chain due-diligence that coincides with standards set by the Organization for Economic Cooperation and Development.

“Ntaganda and his cronies are accused of rape, murder and recruitment of child soldiers. This latest insurgency stands to be financed by a war chest filled with proceeds from their illegal involvement in the minerals trade,” said Pickles. “Enforcing due diligence laws and ensuring that companies source minerals responsibly will help to break the cycle of violence in eastern DRC (1). “

I believe that the presence of the International Crisis Group has helped integrate the DRC (and many countries that associate with it into a global human rights culture. Many countries are affected because of the benefit from the minerals mined in the Congo. Many of these countries have their own forms of legislation to prevent violence and to ensure due-diligence of the supply chain concerning the conflict minerals. Globally, sexual and gender based violence, child soldiers and labor, health and safety requirements for workers, and legal and fair trade and exportation of natural resources are agreed upon. This coincides with World Polity theorists, especially when considering and supporting Western views. Transnational interaction and global social change are being accomplished through the help of the International Crisis Group, which World Polity theorists would agree upon.

1.)    http://www.globalwitness.org/library/congo-government-enforces-law-curb-conflict-mineral-trade

What Can You Do?

Looking for a way to help? Here is a way that doesn’t involve much work on your end. The current 2012 updated listing by The Enough Campaign has major electronic company rankings based on their investment and efforts toward obtaining their important minerals from sources that don’t promote conflict.

Rankings are based on questions such as:

  • Has the company developed at least one verifiably conflict-free product, with independently audited supply chains all the way to the point of extraction?
  • Has the company investigated and come to know precisely which companies refine/smelt the company’s supply of 3TG, with third-party verification?
  • Has the company published the refiners it uses for 3TG?
  • Has the company visited at least two of its refiners and inquired about the use of conflict minerals within the past year?

Companies can receive a maximum score of 48 points. Currently, the highest score has been a 60% with a score of 29 by Intel.

http://www.raisehopeforcongo.org/company-rankings/detailed-responses.pdf

Conflict Minerals: Why You Should Care

Let’s be honest, the majority of us reading this blog have an everyday access to a computer (since that’s how I will assume you are reading this blog). We have Internet access that is easy to come by and probably a fancy cell phone able to things are grandparents don’t even know are possibilities. We are spoiled rotten, able to come back to our homes and cuddle knowing we are safe.

The armed forces benefitting from the minerals obtain them through deliberate terrorization of the Congolese people. Unlawful killings, forced labor, and rapes are happening constantly. We don’t see the mass rapes and torture that are happening constantly in the DRC. We aren’t being hurt. I don’t know about y’all, but if I’m not told over and over again, if I’m personally not being hurt by an issue, if I can’t see an issue and see how it relates to me, its easy for me to turn my head and pretend I don’t have a hand in the matter. We aren’t actively causing it, not doing anything purposely to hurt anyone, but in perfect honesty, people are being treated poorly via our nonchalance. The electronic goods we buy contain the minerals that the Congolese people are being harmed for. The Raise Hope for the Congo initiative has published a list of companies that do well (or not so well) in their ability to strive to use conflict free minerals in their products. Intel, HP, and Phillips, along with several other well-known companies have done an excellent job in obtaining its Tungsten, Tin, and Tantalum from other providers that do not stir up conflict. On the other side of the spectrum though, Nikon, Cannon, HTC and Nintendo have done either nothing or very little to get their products elsewhere. (http://www.raisehopeforcongo.org/content/conflict-minerals-company-rankings).