Progress and Challenges on Conflict Minerals

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 grand corruption linked to violence that has plagued Congo for the past 130 years.

• 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.

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

Section 1502 on conflict minerals of the Dodd-Frank Wall Street Reform and Consumer Protection Act is a transparency measure, and 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. Dodd-Frank 1502 creates a lever to support transparency, security, and the rule of law in the region’s mining sectors. Companies must now publicly disclose annually whether any of the gold or 3Ts in their supply chains originated in Congo or one of its nine neighboring countries 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. . Elm Sustainability Partners estimates the cost for U.S. businesses to comply with the Rule has been 74 to 85 percent less^[6] than the original SEC estimate of $3-4 billion for the first year.^[7]​​

“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

Consistent with its objective, Dodd-Frank 1502 along with related reforms have led to significant improvements in the transparency of corporate supply chains and to a major reduction in the number of conflict mines for the 3T minerals in eastern Congo. More than 75 percent of the world’s smelters and refiners for the four minerals have now passed third party 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.

• 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 had 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]  IPIS is currently updating this study.
• As of June 7, 2018, 78 percent of smelters/refiners worldwide (253 out of 324 total) for the four conflict minerals have passed independent, third-party audits by the Responsible Minerals Assurance Process, and an additional 11 smelters/refiners are participating in the program (i.e. are in the process of being audited) for a total of 264 participants (over 81 percent).^[10]
• 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.^[11] As of December 2017, 495 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.^[12]
• An April 2018 study from the University of Radboud found that individuals, academics, and companies that continue to argue that the U.S. Dodd-Frank has resulted in unintended negative consequences in Congo are largely relying on outdated data and therefore exaggerating the negative impacts of the law they claim to be occurring today.^[13]

Many Congolese communities and leaders—including Nobel Peace Prize nominee and Sakharov Prize winner Dr. Denis Mukwege, and over 100 other Congolese civil society groups and the Congolese Ministry of Mines—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.

• • 111 Congolese civil society groups and the Congolese Ministry of Mines wrote to the SEC in 2017 saying that Dodd-Frank 1502 should not be suspended, repealed, or weakened because that would lead to increased violence and conflict minerals smuggling.^[17] For example, a coalition of 31 civil society groups from South Kivu wrote, “Dodd-Frank… led to a positive change: cut off from the illegal extraction of minerals, which was a major source of funding, armed groups are significantly less active. In the east of the DRC, around 8,500 children left armed groups between 2009 and 2015. … The suspension of some high-level military officers in South Kivu due to their likely involvement in the illegal extraction of minerals. … Any step to suspend Section 1502 would undoubtedly lead to conflict minerals infiltrating the supply chain with devastating effects. Namely, the reactivation of armed groups and the feeding of terrorist and mafia networks.”^[18]
  • Dr. Denis Mukwege, in a New York Times opinion piece: “A conflict-free minerals industry would greatly benefit the people of Congo and contribute to ending the unspeakable violence they have endured for years. The legislative tools to help make this a reality are available to international policy makers, but they must be enacted and enforced. Companies must conduct honest, rigorous investigations of their supply chains, publicly report their findings, and act on the results to ensure that their money — and ours — no longer ends up in the hands of violent rebels. If they are unwilling to do so, governments must compel them to action.”^[19](2015)
  • Open letter from 41 civil society groups in North Kivu: “Thanks to the Dodd-Frank Act, Eastern DRC has to date more than 220 certified green mining sites, more than 300 mining police officers trained and deployed to secure mining sites, an independent audit mechanism, and a regional certification system. These advances undoubtedly contribute to reducing the rate of crime and human rights violations, including rape of women and exploitation of children in mining areas.”^[20](2017)

“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