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

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

Posted by Enough Team on October 31, 2014

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