Electronics are at the top of many holiday gift lists in the U.S. this season, but some of those products could be made using minerals from areas of the world where conflicts have led to widespread human rights abuses.
Much like “blood diamonds”, observers say the sale of the so-called “conflict minerals” by armed militias to corporations making consumer goods for U.S markets is fueling – and funding – atrocities in the Democratic Republic of Congo (DRC), where an ongoing war has killed over five million people in the most bloody conflict in Africa since the Rwandan genocide.
The Dodd-Frank Wall Street Reform and Consumer Protection Act is legislation best known for regulating the U.S. financial market, but part of the act would also address corporate accountability outside the U.S. when it comes to conflict minerals.
Part of the law would require all companies listed with the Securities and Exchange Commission (SEC) to report whether they are sourcing tungsten, tin, tantalum and gold from areas of the DRC linked to militia human rights abuses.
The rule would force companies to investigate whether their products contain conflict minerals and then report that information to the SEC as part of the public record. In legal terms, the process is called "supply chain due diligence".
But the provision is hung up in a rule-making process at the SEC – the body charged with outlining how that particular provision of Dodd-Frank will be spelled out. The SEC has missed its own deadline to outline rules by eight months. The SEC’s website has the task on a to-do list for 2011.
Supporters of the law, including international human rights groups and civil society groups in the United States and DRC, are asking what the hold-up is, and Global Witness, a natural resource conflict watch group, says lives are on the line.
According to Global Witness, the delay "in effect buys extra time for those armed groups responsible for horrendous attacks against civilians in Congo to further benefit from the minerals trade."
An investigation carried out by the United Nations Joint Human Rights Office in the DRC reported that 300 civilians in three villages located close to mining sites in North Kivu province were raped in August 2010. The U.N. has linked that incident directly to competition over access to minerals.
Global Witness has carried out its own investigations, including supply chain mapping, and reports that the trade in conflict minerals is fueling land-grabs and displacements in eastern Kivu Province of DRC, where "human rights abuses, including gender-based violence such as rape and sexual slavery have reached catastrophic proportions."
Opponents of the provision – many of them corporate interest groups – argue that the rules could cut off trade with DRC or cost too much to enforce, and that tracking the origin of their minerals would be extremely difficult.
Supporters of the rules say the minerals covered – tungsten, tin, tantalum – can be traced to just a few smelters globally. They also counter that the provisions won’t block trade, and that the rules will simply require that corporations find out whether they are buying minerals supplied by armed groups in the DRC, disclose that information, and then take "due diligence" measures to source from other mines.
The governor of North Kivu province told Global Witness researchers in April the war had been going on since 1996, and wondered "why didn’t the U.S. government pass this law 10 years ago?"
Representative Jim McDermott, a supporter of the legislation, said the bill was a modern-day measure that would allow consumers and corporate investors to decide for themselves whether to do business with companies that source conflict minerals.
“It is important if we believe in social justice that we cut off the money to those who are killing and raping all over Africa,” McDermott told IPS.
The U.S. state of California – the eighth largest economy in the world – used the provision as a model for its own bill, passed in September, which prohibits the state from doing business with companies that use conflict minerals.
"I think there has been a lot of political pressure by different groups – some of the industry groups – (not to issue the rules)," Corinna Gilfillan, head of the U.S. office for Global Witness, told IPS. “We are talking about two really critical provisions that are important for human rights and we are now eight months delayed. What are the impacts?”
Another, geographically broader provision of Dodd-Frank, also related to transparency, is held up in the rule-making process at the SEC.
That provision would require oil, gas, and mining companies to report to the SEC what they pay in taxes, royalties, fees, production entitlements, and bonuses to governments around the world. Publish What You Pay, an anti-corruption coalition of 600 religious, environmental, and civil society organisations, has been working to implement the measure since 2004.
“In a lot of resource-rich countries, people are living on less than two dollars per day,” said Isabel Munilla, director of Publish What You Pay, at a forum hosted by the Brookings Institution last week in Washington. She said payment reporting initiatives lessened corruption and increased the power of citizens of resource-rich countries to demand their fair share of benefits.
McDermott urged U.S. citizens to throw their support behind full implementation of Dodd-Frank.
"My belief is that honest profit can live beside social justice, and that is what these bills are all about," he said.