A crucial few weeks for Congo

The Democratic Republic of Congo’s (DRC) mineral market has vast potential, and if properly regulated, could be the catalyst for the country’s development while offering solid returns for international investors. Instead, for over a decade, it has fuelled a brutal conflict that has claimed millions of lives. 

Congo minerals are found in a wide range of products, from cell phones and laptops to cars and medical devices.

The coming weeks should mark a turning point. The Securities and Exchange Commission (SEC) is expected to publish the final rules for Section 1502 of the Dodd-Frank Wall Street Reform Act, which covers conflict minerals.

Passed last July with bipartisan support, this groundbreaking law aims to cut off a major funding source for abusive armed groups active in eastern DRC, including the Congolese army. It requires companies using tin, tantalum, tungsten and gold to apply due diligence checks on their supply chains to ensure that they are not fanning the flames of conflict through their purchases. And companies have to report back to the SEC.

Alongside Global Witness and a range of human rights, development and faith-based groups, Calvert and a large coalition of other investors have been calling for such measures for several years. 

Tapping into Congo’s mineral wealth is potentially profitable, but is unacceptable if it finances conflict. The Dodd-Frank conflict minerals provision offers the best chance in over a decade to purge the international marketplace of its links to civilian suffering in Congo. 

If properly implemented and regulated, the law will provide investors and consumers with the assurance that they are not inadvertently supporting brutality in eastern Congo. It can improve the dismal humanitarian situation on the ground both by choking the trade of these minerals whose proceeds fund violent armed groups and by legitimizing trade in commodities that must be part of the country’s regeneration.

For these reasons it is vitally important that the SEC publishes quickly final rules for Section 1502. And it is crucial that companies using these minerals implement the law fully and in good faith.

Alas, some business lobby groups are currently pulling out the stops in a bid to delay or dilute the forthcoming regulations. These interventions are creating confusion and hindering the urgent action that is needed.

International demand for Congolese minerals is currently low. This downturn stems from a six-month suspension of mining and trading by the Congolese government and an overly restrictive interpretation of Dodd-Frank’s requirements by some industry players. It has serious implications for miners and their families, and is not an outcome that is in the interest of anyone with a stake in ending the conflict, easing the suffering and building a peaceful and prosperous Congo.  

Companies looking to source minerals from eastern Congo already have the blueprint they need, in the shape of the OECD supply chain due diligence standards. Developed by a broad coalition of governments, NGOs and a range of companies in 2010, and supported by the UN Security Council, these guidelines will provide industry with the basis for complying with Dodd-Frank’s requirements. The SEC would do well to acknowledge the existing consensus and mirror the OECD due diligence framework in its final rules. 

Taking the gun out of the supply chains that feed our electronics market will not single-handedly solve a conflict that has been driven by complex ethnic, political and economic grievances. But wars need money, and the international community has a direct influence over the mineral trade in the Congo. Investors, companies and governments must use this leverage before the human cost rises further.

Bennett Freeman, former U.S. Deputy Assistant Secretary of State for Democracy, Human Rights and Labor, is senior vice-president of Sustainability Research and Policy at Calvert Investments. Simon Taylor is a founding director of Global Witness.

---