Posted by Senior Director Juliette Terzieff:
A new set of rules for mineral suppliers in Central Africa backed by the world’s leading electronics companies came into effect April 1 in a bid to remove conflict minerals from international supply chains and end the trade’s contribution to violence in the Democratic Republic of Congo. While the Conflict-Free Smelter Program has broad support from stakeholders, there is near universal acknowledgement that the effort will only ultimately be successful as part of a comprehensive multi-pronged approach to ending the association between DRC minerals and conflict.
Mineral trade in the DRC has been a central feature of conflict in the country – with combatant groups locked in deadly battles for control of mines, perpetrating abuses against local populations to ensure control and using profits from the trade to obtain weapons and drive armed conflict.
For years activist stakeholders have applied pressure on governments and industry to take action and keep so-called conflict minerals out of the international supply chain. The electronics industry in particular – which uses DRC-sourced minerals to produce a variety of consumer products including cellular telephones, GPS and computers — has faced intense pressure to find an effective way to address the issue.
And now the time may have come.
The Conflict-Free Smelter Program requires participating mineral processing players in the DRC and neighboring countries to provide proof their supply purchases do not contribute to conflict in the DRC by funding militia groups or other armed combatants. The program, developed by the Electronics Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI), covers tin, tungsten, gold and coltan.
While the program is voluntary both for smelters and buyers, the creators expect companies from other industries will use the system, or something similar to it, as other regulatory requirements come into force. U.S. companies will be required to provide accountings of the mineral supply in their products under reporting provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act due as of 2012. The U.S. Securities and Exchange Commission regulations to implement the provisions were expected April 15, but have now likely been delayed by as much as three months.
The April 1 Conflict-Free Smelter Program launch met with immediate, but in some cases tempered, support from stakeholders.
“We believe it is a step in the right direction that companies are cleaning up their supply chain,” says Kambale Musavuli from Friends of the Congo, a Congolese youth group that emphasizes the use of technology to drive change. “We also don’t think it will have an impact on the conflict but more so create a de facto ban of Congo’s minerals thus allowing more illegal smuggling of Congo’s minerals.”
Indeed within a couple days of the program’s official launch NGO observers began receiving reports from the DRC that militia commanders were finding it challenging to find willing buyers for their product. Until domestic and regional verification systems can be put in place, however, most stakeholders agree militias will find ways to get their product into the export stream.
Buyers for Chinese, Indian and other countries’ manufacturers who are not part of the program or subject to U.S. legislative requirements coming in effect in early 2012 face no regulatory requirements to ensuring their purchases are conflict-free. This could prove particularly valuable for those seeking to sidestep controls given that Chinese demand for minerals like copper are predicted to rise 7% every year between 2010 and 2014.
Other powerful private and public stakeholders are working to create and implement additional elements of a more comprehensive strategy to end the use of conflict minerals. The Organization for Economic Cooperation and Development (OECD) and the United Nations, for example, have been working on tracing and certification programs. The International Tin Research Institute began implementation of the first phase of a tracing program in 2009 that it has been working with Congolese authorities, representatives from other industries and stakeholders on to refine and increase effectiveness.
Supporters of the efforts hope the initiatives will apply pressure on the DRC government to demilitarize mining sites and throw genuine support behind tracing programs. But some observers worry the pressure will merely push DRC mining enterprises towards less-restrictive markets and do little to alleviate the poverty and conflict that afflicts the country.
