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The eastern
Democratic Republic of the Congo The Democratic Republic of the Congo (french: République démocratique du Congo (RDC), colloquially "La RDC" ), informally Congo-Kinshasa, DR Congo, the DRC, the DROC, or the Congo, and formerly and also colloquially Zaire, is a country in ...
(DRC) has a history of conflict, where various armies, rebel groups, and outside actors have profited from mining while contributing to violence and exploitation during wars in the region. The four main end products of mining in the eastern DRC are tin,
tungsten Tungsten, or wolfram, is a chemical element with the symbol W and atomic number 74. Tungsten is a rare metal found naturally on Earth almost exclusively as compounds with other elements. It was identified as a new element in 1781 and first isol ...
,
tantalum Tantalum is a chemical element with the symbol Ta and atomic number 73. Previously known as ''tantalium'', it is named after Tantalus, a villain in Greek mythology. Tantalum is a very hard, ductile, lustrous, blue-gray transition metal that ...
, and
gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile ...
, which are extracted and passed through a variety of intermediaries before being sold to international markets. These four products, (known as the 3TGs) are essential in the manufacture of a variety of devices, including
consumer electronics Consumer electronics or home electronics are electronic ( analog or digital) equipment intended for everyday use, typically in private homes. Consumer electronics include devices used for entertainment, communications and recreation. Usuall ...
such as smartphones, tablets, and computers. Some have identified the conflict as significantly motivated by control over resources. In response, several countries and organizations, including the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...
,
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
, and
OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate ...
have designated 3TG minerals connected to conflict in the DRC as conflict minerals and legally require companies to report trade or use of conflict minerals as a way to reduce incentives for armed groups to extract and fight over the minerals. In the United States, the 2010
Dodd–Frank Wall Street Reform and Consumer Protection Act The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Rece ...
required manufacturers to audit their
supply chain In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, activ ...
s and report use of conflict minerals. In 2015 a US
federal appeals court The United States courts of appeals are the intermediate appellate courts of the United States federal judiciary. The courts of appeals are divided into 11 numbered circuits that cover geographic areas of the United States and hear appeals fro ...
struck down some aspects of the reporting requirements as a violation of corporations’ freedom of speech, but left others in place.


Democratic Republic of the Congo

As of 2010, the conflict resource fueling the world's deadliest war is
gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile ...
in the Congo.
Gold bar A gold bar, also called gold bullion or gold ingot, is a quantity of refined metallic gold of any shape that is made by a bar producer meeting standard conditions of manufacture, labeling, and record keeping. Larger gold bars that are produced ...
s are less traceable than diamonds, and gold is abundant in the Kivu conflict region. In any case, no
jewellery Jewellery ( UK) or jewelry ( U.S.) consists of decorative items worn for personal adornment, such as brooches, rings, necklaces, earrings, pendants, bracelets, and cufflinks. Jewellery may be attached to the body or the clothes. From a w ...
industry standard exists for verifying gold origination, as it does for diamonds (though jewelers’ total outlay on gold is five times that on diamonds). Other conflict minerals being illicitly exported from the Congo include tungsten,
cassiterite Cassiterite is a tin oxide mineral, SnO2. It is generally opaque, but it is translucent in thin crystals. Its luster and multiple crystal faces produce a desirable gem. Cassiterite was the chief tin ore throughout ancient history and remains ...
, and
coltan Coltan (short for columbite–tantalites and known industrially as tantalite) is a dull black metallic ore from which the elements niobium and tantalum are extracted. The niobium-dominant mineral in coltan is columbite (after niobium's original ...
(which provides the
tantalum Tantalum is a chemical element with the symbol Ta and atomic number 73. Previously known as ''tantalium'', it is named after Tantalus, a villain in Greek mythology. Tantalum is a very hard, ductile, lustrous, blue-gray transition metal that ...
for mobile phones, and is also said to be directly sustaining the conflict). Armed conflict and mineral resource looting by the Congolese National Army and various armed rebel groups, including the
Democratic Forces for the Liberation of Rwanda The Democratic Forces for the Liberation of Rwanda (french: Forces démocratiques de libération du Rwanda, FDLR) is an armed rebel group active in the eastern Democratic Republic of the Congo. As an ethnic Hutu group opposed to the ethnic Tuts ...
(FDLR) and the National Congress for the Defense of the People (CNDP), a proxy Rwandan militia group, has occurred throughout the late 20th century and the early 21st century. Additionally, the looting of the Congo's natural resources is not limited to domestic actors. During the Congo Wars (
First Congo War The First Congo War, group=lower-alpha (1996–1997), also nicknamed Africa's First World War, was a civil war and international military conflict which took place mostly in Zaire (present-day Democratic Republic of the Congo), with major spillo ...
(1996–1997) and
Second Congo War The Second Congo War,, group=lower-alpha also known as the Great War of Africa or the Great African War and sometimes referred to as the African World War, began in the Democratic Republic of the Congo in August 1998, little more than a year a ...
(1998–2003)), Rwanda, Uganda and Burundi particularly profited from the Congo's resources. These governments continue to smuggle resources out of the Congo to this day. The profits from the sale of these minerals have financed fighting in the Second Congo War and ongoing follow-on conflicts. Control of lucrative mines has also itself become a military objective. A major research report from November 2012 by the Southern Africa Resource Watch revealed that gold miners in the east of the
Democratic Republic of Congo The Democratic Republic of the Congo (french: République démocratique du Congo (RDC), colloquially "La RDC" ), informally Congo-Kinshasa, DR Congo, the DRC, the DROC, or the Congo, and formerly and also colloquially Zaire, is a country in ...
were being exploited by corrupt government officials, bureaucrats and security personnel, who all demand illegal tax, fees and levies from the miners without delivering any services in return. Despite the alleged gold rush in regions of the country, none of the population and workforce is benefiting from this highly lucrative industry.


Mines

Mines, in eastern Congo, are often located far from populated areas in remote and dangerous regions. A recent study by International Peace Information Service (IPIS) indicates that armed groups are present at more than 50% of mining sites. At many sites, armed groups illegally tax, extort, and coerce civilians to work. Miners, including children, work up to 48-hour shifts amidst mudslides and tunnel collapses that kill many. The groups are often affiliated with rebel groups, or with the Congolese National Army, but both use rape and violence to control the local population.


United States law


Conflict minerals

The four conflict minerals codified in the U.S. Conflict Minerals Law, are: *Columbite-tantalite (or ''
coltan Coltan (short for columbite–tantalites and known industrially as tantalite) is a dull black metallic ore from which the elements niobium and tantalum are extracted. The niobium-dominant mineral in coltan is columbite (after niobium's original ...
'', the colloquial African term) is the metal ore from which the element
tantalum Tantalum is a chemical element with the symbol Ta and atomic number 73. Previously known as ''tantalium'', it is named after Tantalus, a villain in Greek mythology. Tantalum is a very hard, ductile, lustrous, blue-gray transition metal that ...
is extracted. Tantalum is used primarily for the production of
tantalum capacitor A tantalum electrolytic capacitor is an electrolytic capacitor, a passive component of electronic circuits. It consists of a pellet of porous tantalum metal as an anode, covered by an insulating oxide layer that forms the dielectric, surrounde ...
s, particularly for applications requiring high performance, a small compact format and high reliability, from
hearing aid A hearing aid is a device designed to improve hearing by making sound audible to a person with hearing loss. Hearing aids are classified as medical devices in most countries, and regulated by the respective regulations. Small audio amplifiers s ...
s and
pacemaker An artificial cardiac pacemaker (or artificial pacemaker, so as not to be confused with the natural cardiac pacemaker) or pacemaker is a medical device that generates electrical impulses delivered by electrodes to the chambers of the heart ei ...
s, to
airbag An airbag is a vehicle occupant-restraint system using a bag designed to inflate extremely quickly, then quickly deflate during a collision. It consists of the airbag cushion, a flexible fabric bag, an inflation module, and an impact sensor. T ...
s, GPS, ignition systems and anti-lock braking systems in automobiles, through to laptop computers, mobile phones, video game consoles, video cameras and digital cameras. In its carbide form, tantalum possesses significant hardness and wear resistance properties. As a result, it is used in jet engine/turbine blades, drill bits, end mills and other tools. *Cassiterite is the chief ore needed to produce tin, essential for the production of tin cans and the
solder Solder (; NA: ) is a fusible metal alloy used to create a permanent bond between metal workpieces. Solder is melted in order to wet the parts of the joint, where it adheres to and connects the pieces after cooling. Metals or alloys suitable ...
on the circuit boards of electronic equipment. Tin is also commonly a component of biocides, fungicides and as tetrabutyl tin/tetraoctyl tin, an intermediate in polyvinyl chloride (PVC) and high performance paint manufacturing. *
Wolframite Wolframite is an iron, manganese, and tungstate mineral with a chemical formula of that is the intermediate between ferberite ( rich) and hübnerite ( rich). Along with scheelite, the wolframite series are the most important tungsten ore mineral ...
is an important source of the element
tungsten Tungsten, or wolfram, is a chemical element with the symbol W and atomic number 74. Tungsten is a rare metal found naturally on Earth almost exclusively as compounds with other elements. It was identified as a new element in 1781 and first isol ...
. Tungsten is a very dense metal and is frequently used for this property, such as in fishing weights, dart tips and golf club heads. Like
tantalum carbide Tantalum carbides (TaC) form a family of binary chemical compounds of tantalum and carbon with the empirical formula TaC''x'', where ''x'' usually varies between 0.4 and 1. They are extremely hard, brittle, refractory ceramic materials with metal ...
,
tungsten carbide Tungsten carbide (chemical formula: WC) is a chemical compound (specifically, a carbide) containing equal parts of tungsten and carbon atoms. In its most basic form, tungsten carbide is a fine gray powder, but it can be pressed and formed into ...
possesses hardness and wear resistance properties and is frequently used in applications like metalworking tools, drill bits and milling. Smaller amounts are used to substitute lead in "green ammunition". Minimal amounts are used in electronic devices, including the vibration mechanism of cell phones. *Gold is used in jewelry, investments, electronics, and dental products. It is also present in some chemical compounds used in certain semiconductor manufacturing processes. These are sometimes termed "''the 3T's and gold''", "''3TG''", or even simply the "''3T's''", referring to the elements of interest they contain (
tantalum Tantalum is a chemical element with the symbol Ta and atomic number 73. Previously known as ''tantalium'', it is named after Tantalus, a villain in Greek mythology. Tantalum is a very hard, ductile, lustrous, blue-gray transition metal that ...
, tin,
tungsten Tungsten, or wolfram, is a chemical element with the symbol W and atomic number 74. Tungsten is a rare metal found naturally on Earth almost exclusively as compounds with other elements. It was identified as a new element in 1781 and first isol ...
,
gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile ...
). Under the US Conflict Minerals Law, additional minerals may be added to this list in the future.


History

In April 2009, Senator
Sam Brownback Samuel Dale Brownback (born September 12, 1956) is an American attorney, politician, diplomat, and member of the Republican Party (United States), Republican Party who served as the United States Ambassador-at-Large for International Religious Fr ...
(R-KS) introduced the Congo Conflict Minerals Act of 2009 () to require electronics companies to verify and disclose their sources of cassiterite, wolframite, and tantalum. This legislation died in committee. However, Brownback added similar language as Section 1502 of the
Dodd–Frank Wall Street Reform and Consumer Protection Act The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Rece ...
, which passed Congress and was signed into law by President
Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party (United States), Democratic Party, Obama was the first Af ...
on July 21, 2010. This Conflict Mineral Law was published in the
Federal Register The ''Federal Register'' (FR or sometimes Fed. Reg.) is the official journal of the federal government of the United States that contains government agency rules, proposed rules, and public notices. It is published every weekday, except on fede ...
of December 23, 2010. The U.S. Securities and Exchange Commission (SEC) draft regulations to implement the law would have required U.S. and certain foreign companies to report and make public their use of so-called "conflict minerals" from the Democratic Republic of the Congo or adjoining countries in their products. Comments on this proposal were extended until March 2, 2011. The comments on the proposal were reviewable by the public. One report on the proposal stated the following statistics for the submitted comments: * Slightly more than 700 comment letters were submitted to SEC on the proposal; * Approximately 65% of those were form letters or basic letters from the general public supporting the rule's intent; * The remaining 35% (roughly 270) represent views of businesses, trade/industry associations, the investment/financial community, professional auditing firms, and other relevant governmental entities; and * Of those 270 comments, an estimated 200 contained substantive and/or technical comments. That report also contained what it calls a "preview of the final SEC regulations" synthesized from their detailed research and analysis of a large body of documents, reports and other information on the law, proposed regulation and the current budget/political setting facing the SEC in the current administration. The final rule went into effect 13 November 2012. The SEC rule did not go unnoticed by the international community, including entities seeking to undermine traceability efforts. A report published by a metals trading publication illustrated one DRC ore/mineral flow method that has apparently been devised to thwart detection. On July 15, 2011, the US State Department issued a statement on the subject. Section 1502(c) of the Law mandates that the
State Department The United States Department of State (DOS), or State Department, is an executive department of the U.S. federal government responsible for the country's foreign policy and relations. Equivalent to the ministry of foreign affairs of other na ...
work in conjunction with SEC on certain elements of conflict minerals policy development and support. On October 23, 2012, U.S. State Dept Officials asserted that ultimately, it falls on the U.S. State Dept. to determine when this rule would no longer apply. In April 2014, the United States Court of Appeals for the District of Columbia Circuit struck down several parts of the SEC Rules as unconstitutional.


Auditing and reporting requirements

US Conflict Minerals Law contains two requirements that are closely connected: *independent third party supply chain traceability audits * reporting of audit information to the public and SEC. Even companies not directly regulated by the SEC will be impacted by the audit requirements because they will be pushed down through entire supply chains, including privately held and foreign-owned companies. SEC estimated that 1,199 "issuers" (i.e., companies subject to filing other SEC reports) will be required to submit full conflict mineral reports. This estimate was developed by finding the amount of tantalum produced by the DRC in comparison to global production (15% – 20%). The Commission selected the higher figure of 20% and multiplied that by 6,000 (the total number of "issuers" SEC will be required to do initial product/process evaluations). This estimate does not account for the companies who supply materials to the "issuers" (but are not themselves SEC-regulated) but who will almost certainly be required to conduct conflict minerals audits to meet the demands of those customers. Other estimates indicate that the total number of US companies likely impacted may exceed 12,000. A study of the potential impact of the regulation in early 2011 by the '' IPC – Association Connecting Electronic Industries'' trade association. was submitted with the association's comments to the SEC. The study states that the IPC survey respondents had a median of 163 direct suppliers. Applying that number to the SEC's estimated number of impacted issuers results in the possibility of over 195,000 businesses that could be subject to some level of supply chain traceability effort.


Applicability in general

Under the law, companies have to submit an annual conflict minerals report to the SEC if: *(a) they are required to file reports with the SEC under the Exchange Act of 1934 *(b) conflict minerals are ''necessary to the functionality or production of a product that they manufacture or contract to be manufactured.'' That statement contains two separate – but critical concepts: the purpose of the conflict mineral in the product/process, and the control that the company exerts over the manufacturing process/specifications. A company would be deemed to contract an item to be manufactured if it: *Exerts any influence over the manufacturing process; or, *Offers a generic product under its own brand name or a separate brand name (regardless of whether the company has any influence over the manufacturing process) and the company contracted to have the product manufactured specifically for itself. This language implied that some retailers who are not manufacturers might be subject to the audit and disclosure requirements. "Contracting to manufacture" a product requires some actual influence over the manufacturing of process that product, a determination based on facts and circumstances. A company is not to be deemed to have influence over the manufacturing process if it merely: * Affixes its brand, marks, logo, or label to a generic product manufactured by a third party. * Services, maintains, or repairs a product manufactured by a third party. * Specifies or negotiates contractual terms with a manufacturer that do not directly relate to the manufacturing of the product. The proposed regulations attempted to clarify that tools used in assembly and manufacturing will not trigger the law. The intent was to cover minerals/metals in the final product only. Nothing specifically addresses intermediate chemical processes that use chemicals that contain conflict minerals. Additionally, neither the law nor the proposed regulation established a
de minimis ''De minimis'' is a Latin expression meaning "pertaining to minimal things", normally in the terms ''de minimis non curat praetor'' ("The praetor does not concern himself with trifles") or ''de minimis non curat lex'' ("The law does not concern i ...
quantity or other form of materiality threshold that would preclude the applicability of the auditing/reporting requirements.


Supply chain traceability auditing

The law mandates the use of an "independent private sector auditor" to conduct the audits. SEC has proposed two different standards for the audits: the "reasonable inquiry" and the "
due diligence Due diligence is the investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract with another party or an act with a certain standard of care. It can be a ...
". Should the final rule include this structure, the reasonable inquiry would be the first step to determine if the company can on its own, using reasonable efforts and trustworthy information, make a reliable determination as to the source/origin of its tin, tantalum, tungsten and/or gold. Where companies are unable to make such a determination for any reason, they would then be required to take the next step of the "due diligence", which is the independent private sector audit. The statute specified that the audits be "conducted in accordance with standards established by the
Comptroller General of the United States The Comptroller General of the United States is the director of the Government Accountability Office (GAO, formerly known as the General Accounting Office), a legislative-branch agency established by Congress in 1921 to ensure the fiscal and man ...
, in accordance with rules promulgated by the Commission". This means that the same auditing standards that apply to other SEC auditing requirements will apply to conflict minerals auditsSection 1502(b). Because of this language, SEC will have little discretion to allow companies to issue self-generated statements or certifications to satisfy the law. Third party audits for conflict minerals supply chain traceability began in summer 2010 under the Electronic Industry Citizenship Coalition (EICC), a US-based electronics manufacturing trade association. Under this program, EICC selected three audit firms to conduct the actual audits, with two of the three participating in the pilot audits in 2010. After concluding the pilot, one of the two firms involved in 2010 withdrew from the program specifically in response to the SEC's proposal and to reduce potential legal risks to the audited entities. Neither the law nor the proposed regulations provide guidance on what will be considered an acceptable audit scope or process, preferring to allow companies the flexibility meeting the requirement in a manner that is responsive to their own individual business and supply chain. At the same time, the law contains a provision that preserves the government's rights to deem any report, audit or other due diligence processes as being unreliable, and in such cases, the report shall not satisfy the requirements of the regulations, further emphasizing the need for such audits to conform to established SEC auditing standards. Comments on the proposed regulation pointed out that, should SEC not specify an applicable audit standard, it cannot also be silent or ambiguous on the auditor standards as well, or the commission will violate the plain language of the Law mandating "standards established by the Comptroller General of the United States".See numerous comments filed at https://www.sec.gov/comments/s7-40-10/s74010.shtml It is generally expected that SEC will provide specificity on both the audit standard and the auditor standard. SEC's proposal attempted to clarify its position on auditor requirements. The
Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate ...
(OECD) published its Guidance on conflict minerals supply chain traceability. This guidance is gaining much momentum as "the" standard within US policy. However, a recent critical analysis of the standard in comparison to existing US auditing standards under SEC highlighted a number of significant inconsistencies and conflict with relevant US standards. Companies subject to the US law who implement the OECD Guidance without regard for the SEC auditing standards may face legal compliance risks.


Reporting and disclosure

Companies subject to the SEC reporting requirement would be required to disclose whether the minerals used in their products originated in the DRC or adjoining countries (as defined above). The law mandates that this reporting be submitted/made available annually. Many comments to the proposed regulation asked SEC to clarify whether the report must be "furnished"—meaning it is made available to SEC but not directly incorporated within the company's formal financial report—or "submitted"—meaning the report is directly incorporated into the financial report. At first glance, this may appear to be a minor point; however, this difference is very important in determining the audit/auditor standards and related liabilities. If it is determined that none of the minerals originated in the DRC or adjoining countries, the report must include a statement to that effect and provide an explanation of the country of origin analysis that was used to arrive at the ultimate conclusion. On the other hand, if conflict minerals originating in the DRC or adjoining countries were used (or if it is not possible to determine the country of origin of the conflict minerals used), companies would be required to state as such in the annual report. In either case, companies would also be required to make this information public by posting their annual conflict minerals report on their websites, and providing the SEC with the internet addresses where the reports may be found. Further, the proposed regulations would require companies to maintain records relating to the country of origin of conflict minerals used in their products. Media outlets have reported that many companies required to file Specialized Disclosure Reports to the U.S. Securities and Exchange Commission (SEC) and any necessary conflict minerals reports for 2013 under the SEC's conflict minerals rule are struggling to meet the June 2, 2014 report filing deadline. Many impacted companies were hoping for clarification regarding filing requirements, from the
United States Court of Appeals for the District of Columbia Circuit The United States Court of Appeals for the District of Columbia Circuit (in case citations, D.C. Cir.) is one of the thirteen United States Courts of Appeals. It has the smallest geographical jurisdiction of any of the U.S. federal appellate co ...
from a lawsuit filed by the
National Association of Manufacturers The National Association of Manufacturers (NAM) is an advocacy group headquartered in Washington, D.C., with additional offices across the United States. It is the nation's largest manufacturing industrial trade association, representing 14,000 s ...
. The appellate court's ruling left the necessary conflict minerals reporting requirements largely intact and it has been suggested that impacted companies should review the SEC's Division of Corporation Finance's response to the court's ruling which provides guidance regarding the effect of the appellate court's ruling. On August 18, 2015, the divided D.C. Circuit Court again held the SEC's conflict materials rule violates the
First Amendment First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and reco ...
. Senior Circuit Judge A. Raymond Randolph, joined by Senior Circuit Judge
David B. Sentelle David Bryan Sentelle (born February 12, 1943) is a Senior United States circuit judge of the United States Court of Appeals for the District of Columbia Circuit. Early life, family and education David Sentelle was born in Canton, North Carolina. ...
, weighed if the required disclosures were effective and uncontroversial.''Recent Cases - D.C. Circuit Limits Compelled Commercial Disclosures to Voluntary Advertising
129 Harv. L. Rev. 819 (2016).
Citing news reports and a Congressional hearing, the court decided the policy was ineffective. The court next found the required label was controversial because it "is a metaphor that conveys moral responsibility for the Congo war". As such, the court struck down the conflict materials rule's disclosure requirements as a violation of corporations’
freedom of speech Freedom of speech is a principle that supports the freedom of an individual or a community to articulate their opinions and ideas without fear of retaliation, censorship, or legal sanction. The right to freedom of expression has been recogni ...
. Circuit Judge Sri Srinivasan dissented, writing that the required disclosures were not controversial because they were truthful.


Criticism of the law

The law has been criticised for not addressing the root causes of the conflict, leaving to the Congolese government the responsibility for providing an environment in which companies can practice due diligence and legitimately purchase the minerals they need, when the reality is that mechanisms for transparency do not exist. The effect has been to halt legitimate mining ventures that provided livelihoods for people, reducing the Congo's legal exports of tantalum by 90%. An investigation by the U.S.
Government Accountability Office The U.S. Government Accountability Office (GAO) is a legislative branch government agency that provides auditing, evaluative, and investigative services for the United States Congress. It is the supreme audit institution of the federal gover ...
(GAO) found that most companies were unable to determine the source of their conflict minerals. Technology manufacturers criticized a law which required them to label a product as not "DRC Conflict Free" as
compelled speech Compelled speech is a transmission of expression required by law. A related legal concept is '' protected speech''. Just as freedom of speech protects free expression, in many cases it similarly protects an individual from being required to utter ...
, and in violation of the
First Amendment First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and reco ...
.


Conflict Minerals Regulation in the EU

Like the US, the EU wanted to stabilise and guarantee the steady supply of 3TG. On 16 June 2016 the European Parliament confirmed that "mandatory due diligence" would be required for "all but the smallest EU firms importing tin, tungsten, tantalum, gold and their ores". On May 17, 2017, the EU passed Regulation (EU) 2017/821 of the Parliament and of the council on the supply chain due diligence obligations for importers of tin, tantalum, tungsten, their ores, and gold from conflict-affected and high risk areas. The regulation took effect in January 2021, and directly applies to certain companies that mineral ores, concentrates and processed metals containing or consisting of 3TG into the EU from conflict-affected or high-risk areas. On August 10, 2018, The European Commission published their non-binding guidelines for the identification of conflict-affected and high-risk areas and other supply chain risks under Regulation (EU) 2017/821 of the European Parliament and of the council.


Conflict resources in supply chains

Increases in business process outsourcing to globally dispersed production facilities means that social problems and human rights violations are no longer only an organization matter, but also often occur in companies’ supply chains, and challenge for supply chain managers.Hannes Hofmann, Martin C. Schleper, Constantin Blome: ''Conflict Minerals and Supply Chain Due Diligence: An Exploratory Study of Multitier Supply Chains.'' In: ''Journal of Business Ethics.'' DOI 10.1007/s10551-015-2963-z Besides the harm conflict minerals do where they are produced, human rights violations also raise an enormous risk to corporate reputations. Consumers, mass media and employees expect companies to behave responsibly and have become intolerant of those who don't. Consequently, firms that are located downstream in the supply chain and that are more visible to stakeholders are particularly threatened by social supply chain problems. The recent debate concerning conflict minerals illustrates the importance of social and human rights issues in supply chain management practice as well as the emerging need to react to social conflicts. Conflict minerals are processed in many different components throughout various industries and hence have a high overall impact on business. Initiatives like the
Dodd–Frank Wall Street Reform and Consumer Protection Act The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Rece ...
or the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk AreasOECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
/ref> demand that supply chain managers verify purchased goods as ‘‘conflict-free’’ or implement measures to better manage any inability to do so. Minerals mined in Eastern Congo pass through the hands of numerous middlemen as they are shipped out of Congo, through neighboring countries such as
Rwanda Rwanda (; rw, u Rwanda ), officially the Republic of Rwanda, is a landlocked country in the Great Rift Valley of Central Africa, where the African Great Lakes region and Southeast Africa converge. Located a few degrees south of the Equator ...
or
Burundi Burundi (, ), officially the Republic of Burundi ( rn, Repuburika y’Uburundi ; Swahili: ''Jamuhuri ya Burundi''; French: ''République du Burundi'' ), is a landlocked country in the Great Rift Valley at the junction between the African Gr ...
, to East Asian processing plants. Because of this, the US Conflict Minerals Law applies to materials originating (or claimed to originate) from the DRC as well as the nine adjoining countries:
Angola , national_anthem = "Angola Avante"() , image_map = , map_caption = , capital = Luanda , religion = , religion_year = 2020 , religion_ref = , coordinat ...
,
Burundi Burundi (, ), officially the Republic of Burundi ( rn, Repuburika y’Uburundi ; Swahili: ''Jamuhuri ya Burundi''; French: ''République du Burundi'' ), is a landlocked country in the Great Rift Valley at the junction between the African Gr ...
,
Central African Republic The Central African Republic (CAR; ; , RCA; , or , ) is a landlocked country in Central Africa. It is bordered by Chad to the north, Sudan to the northeast, South Sudan to the southeast, the DR Congo to the south, the Republic of th ...
,
Republic of Congo The Republic of the Congo (french: République du Congo, ln, Republíki ya Kongó), also known as Congo-Brazzaville, the Congo Republic or simply either Congo or the Congo, is a country located in the western coast of Central Africa to the w ...
,
Rwanda Rwanda (; rw, u Rwanda ), officially the Republic of Rwanda, is a landlocked country in the Great Rift Valley of Central Africa, where the African Great Lakes region and Southeast Africa converge. Located a few degrees south of the Equator ...
,
South Sudan South Sudan (; din, Paguot Thudän), officially the Republic of South Sudan ( din, Paankɔc Cuëny Thudän), is a landlocked country in East Africa. It is bordered by Ethiopia, Sudan, Central African Republic, Democratic Republic of th ...
,
Zimbabwe Zimbabwe (), officially the Republic of Zimbabwe, is a landlocked country located in Southeast Africa, between the Zambezi and Limpopo Rivers, bordered by South Africa to the south, Botswana to the south-west, Zambia to the north, and ...
,
Uganda }), is a landlocked country in East Africa. The country is bordered to the east by Kenya, to the north by South Sudan, to the west by the Democratic Republic of the Congo, to the south-west by Rwanda, and to the south by Tanzania. The ...
, and
Zambia Zambia (), officially the Republic of Zambia, is a landlocked country at the crossroads of Central, Southern and East Africa, although it is typically referred to as being in Southern Africa at its most central point. Its neighbours are t ...
. Firms have begun to apply governance mechanisms to avoid adverse effects of conflict mineral sourcing. However, the mere transfer of responsibilities upstream in the supply chain apparently will not stop the trade with conflict minerals, notably due to two reasons: *On the one hand, globalization has created governance gaps in a sense that companies are able to abuse human rights without being sanctioned by independent third parties. This gap results in a non-allocation of responsibility that makes the problem of human rights abuses and social conflicts within dispersed supply chains very likely to endure, particularly without collaborative approaches to remedy these deficiencies. *On the other hand, conflict minerals usually originate from globally diverse deposits and are difficult to track within components and manufactured products. This is the case because they are mixed with minerals of different origin and added to metal alloys. Consequently, although the share of these minerals in single end products may be negligible, they are prevalent in numerous products and commodities. Together, these circumstances leave downstream firms nearly incapable of detecting risks associated with conflict minerals. Hence, the topic of conflict minerals becomes one of supply chain management rather than of individual companies’ legal or compliance divisions alone. What is needed is effective and supply-chain wide-mechanisms of traceability and due diligence that allow firms to take individual and collective responsibility as parts of supply chains. In the context of mineral supply chains, due diligence represents a holistic concept that aims at providing a chain of custody tracking from mine to export at country level, regional tracking of mineral flows through the creation of a database on their purchases, independent audits on all actors in the supply chain, and a monitoring of the whole mineral chain by a mineral chain auditor. In this sense, due diligence transcends conventional risk management approaches that usually focus on the prevention of direct impacts on the core business activities of companies. Moreover, due diligence focuses on a maximum of transparency as an end itself while risk management is always directed towards the end of averting direct damages. However, besides the
Dodd–Frank Wall Street Reform and Consumer Protection Act The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Rece ...
and the OECD Guidance, there is still a gap in due diligence practices as international norms are just emerging. Studies found that the motivation for supply chain due diligence as well as expected outcomes of these processes vary among firms. Furthermore, different barriers, drivers, and implementation patterns of supply chain due diligence have been identified in scholarly research.


Implementation

Several industry organizations are responsible for actually conducting due diligence tracking of minerals through the supply chain. The OECD has assessed five industry initiatives have been assessed for whether they fulfill the OECD guidance on conflict minerals. * The
Dubai Multi Commodities Centre Dubai Multi Commodities Centre (DMCC) is the UAE's largest free-trade zone that is located in the Jumeirah Lake Towers district of Dubai. Created in 2002, it serves as a commodities exchange that deals in four main sectors: precious commod ...
is a trade zone in the
United Arab Emirates The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia (Middle East, The Middle East). It is ...
that is a major market for gold and diamonds. * The ''International Tin Association'' (ITA), previously known as the ''International Tin Research Institute'' (ITRI) until 2018, is a tin
trade association A trade association, also known as an industry trade group, business association, sector association or industry body, is an organization founded and funded by businesses that operate in a specific industry. An industry trade association partic ...
based in the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...
. The ''Tantalum-Niobium International Study Center'' (TIC) is a tantalum-niobium
trade association A trade association, also known as an industry trade group, business association, sector association or industry body, is an organization founded and funded by businesses that operate in a specific industry. An industry trade association partic ...
based in
Belgium Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to ...
. The organizations represent major buyers of tin, tantalum, and tungsten. Following the passage of the Dodd Frank bill, the two associations launched the launched the ''ITRI Tin Supply Chain Initiative'' (ITSCI) in 2010. * The
London bullion market The London bullion market is a wholesale over-the-counter market for the trading of gold and silver. Trading is conducted amongst members of the London Bullion Market Association (LBMA), loosely overseen by the Bank of England. Most of the member ...
is a market for gold and silver and runs the ''Responsible Gold Guidance'' (RGG). * The ''Responsible Jewellery Council'' is an industry organization for the watch and jewellery industry. * The ''Responsible Business Alliance'' (RBI), previously known as the ''Electronic Industry Citizenship Coalition'' (EICC), heads the ''Responsible Minerals Initiative'' (RMI), previously known as the ''Conflict Free Sourcing Initiative'' (CFSI).


Organizations and activists involved

The FairPhone Foundation raises awareness of conflict minerals in the mobile industry and is a company which tries to produce a smart phone with 'fair' conditions along the supply chain. Various industry and trade associations are also monitoring developments in conflict minerals laws and traceability frameworks. Some of these represent electronics, retailers, jewelry, mining, electronics components, and general manufacturing sectors. One organization – ITRI (a UK-based international non-profit organization representing the tin industry and sponsored/supported by its members, principally miners and smelters.) had spearheaded efforts for the development and implementation of a "bag and tag" scheme at the mine as a key element of credible traceability. The program and related efforts were initially not likely to extend beyond the pilot phase due to a variety of implementation and funding problems that occurred. In the end however, the device did enter the market. In late March 2011, the UK government launched an informational section on its Foreign & Commonwealth Office website dedicated to conflict minerals. This information resource is intended to assist British companies in understanding the issues and, specifically, the US requirements. On Jan 6th 2014, the semiconductor giant Intel announced that it would distance itself from conflict minerals. As a result, all Intel microprocessors henceforth will be conflict-free.


See also

*
Blood diamond ''Blood Diamond'' is a 2006 American political war action thriller film directed and co-produced by Edward Zwick and starring Leonardo DiCaprio, Jennifer Connelly, and Djimon Hounsou. The title refers to blood diamonds, which are diamonds min ...
*
Water conflict Water conflict is a term describing a conflict between countries, states, or groups over the rights to access water resources. The United Nations recognizes that water disputes result from opposing interests of water users, public or private. A ...
*
Oil war An oil war is a conflict about petroleum resources, or their transportation, consumption, or regulation. The term may also refer generally to any conflict in a region that contains oil reserves or is geographically positioned in a location where a ...
*
Resource war A resource war is a type of war caused by conflict over resources. In a resource war, there is typically a nation or group that controls the resource and an aggressor that wishes to seize control over said resource. This power dynamic between nati ...
* Coltan mining and ethics


References


Further reading

* * *


External links

{{Commons category, Conflict minerals
Conflict Minerals 101KPMG: Conflict Minerals Provision of Dodd-Frank
Politics of mining in Africa Minerals Environmental controversies Global issues Mining in the Democratic Republic of the Congo