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A Step Forward on Conflict Minerals via Financial Reform

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A Step Forward on Conflict Minerals via Financial Reform

Posted by David Sullivan on May 20, 2010

A Step Forward on Conflict Minerals via Financial Reform

UPDATE 5/22: The New York Times picked up the story today. Read it here.

UPDATE 5/21: With the passage of the financial regulatory bill, the conflict minerals amendment will also proceed to conference committee where the differences in the House and Senate versions of the legislation will be worked out. Stay tuned.

The prospects of actually passing legislation to hold companies to account on conflict minerals increased dramatically this week, with the addition of Amendment 3997 to the financial reform bill that is advancing in the Senate. The amendment was introduced by Senator Sam Brownback and co-sponsored by a bipartisan coalition of nine senators.

Building off of the Congo Conflict Minerals Act (S.891), the amendment requires companies listed with the Securities and Exchange Commission to disclose if minerals in their products may have originated in Congo or a neighboring country. Moreover, it requires companies to disclose the measures they’ve taken to ensure such materials didn’t benefit armed groups.

This is a major victory, and a testament to the tenacious commitment of Senator Brownback and his colleagues, who persevered over a coalition of industry groups, including the U.S. Chamber of Commerce, who circulated a letter opposed to the amendment. Enough and a coalition of activists and human rights organizations weighed in with our own letter to Banking Committee Chair Chris Dodd and ranking member Shelby. Special recognition goes out to Connecticut activists who used their leverage as constituents to help secure Dodd’s support. Senator Russ Feingold (D-WI) commended his colleagues for accepting the amendment, saying that these steps to promote transparency “will help the United States and our allies more effectively deal with these complex problems, at the same time that they will also help American consumers and investors make more informed decisions.”

Curiously, the electronics industry did not come out with a public statement on the amendment, and we hope to see them do the right thing by supporting it moving forward.

This means the frontline battle on legislation will play out in the conference committee that reconciles this bill with the House financial reform bill passed earlier this year (which didn’t contain anything on conflict minerals). This also means that the legislation will be based on the Senate’s SEC disclosure model, rather than the import-based process that was the basis for the Conflict Minerals Trade Act (H.R. 4128).

In the coming weeks, we will need to fight tooth and nail to make sure we get language that effectively holds companies to account. We need legislation that actually creates transparency, has serious penalties for lying, and which would enable the naming and shaming of companies that source from conflict zones. Ultimately, we need a bill that paves the way for consumers to be able to choose be conflict free, because given that choice, we think consumers will side with helping to break the link between mineral resources and human rights abuses in eastern Congo.


Photo: Minerals dealer shows the difference between tin ore from a rebel-held mine and a non-conflict mine. (Grassroots Group/Sasha Lezhnev)