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One Step Forward for Conflict Minerals, but What Impact on Congo?

<p>The financial reform law's requirements for conflict-free sourcing of electronics materials is a good step, but abandoning the DRC altogether is a knee-jerk reaction that won't fix the country's problems.</p>

The issue of conflict minerals is finally center stage, as reported two weeks ago on Greener Computing, thanks to a provision in the new Dodd-Frank Wall Street Reform and Consumer Protection Act that requires U.S. manufacturers to demonstrate that their sourcing practices aren't contributing to human rights atrocities in the Democratic Republic of Congo (DRC). The issue is also news on the other side of the pond, where human rights NGO Global Witness is suing the U.K. government, claiming it "turns a blind eye" to British firms who trade in "lucrative" Congolese conflict minerals.

The DRC has tremendous mineral wealth, and at issue are columbite-tantalite (coltan), cassiterite, wolframite (and gold) -- a number of minerals with tongue-twisting names found in a wide range of industrial and consumer products, including many of our beloved high-tech electronics.

While the term "conflict minerals" may not be top of mind when we're texting OMG to our BFFs, the magic of all these gadgets is possible thanks in large part to tin, used to solder electronic components together; tungsten, used in light-bulb filaments and to make cell phones vibrate; and metallic tantalum, a heat-resistant powder capable of holding an electrical charge.

The DRC is hardly the world's largest producer of any of these elements, but it has nonetheless become the poster child for "conflict minerals." Although the country's mineral wealth should be fueling social and economic development, it has instead fueled years of conflict and left a wake of misery for much of this decade. Since the late 1990s when the current conflict erupted, more than 5 million people have died and the eastern Congo has earned the unfortunate label of "rape capital of the world."

Most of the deaths are actually because of malaria, diarrhea, pneumonia and malnutrition, all non-violent causes and normally preventable. As the U.N reported as long ago as 2003, "The flow of arms, exploitation and the continuation of the conflict are inextricably linked."

Conflict aside, from the first time I saw images of people mining coltan (really, digging in the mud with whatever tools available) I've long wondered when consumers would finally make a connection between their purchasing decisions and the suffering of people in the DRC. Artisanal miners, even the ones not working as forced labor, toil in awful conditions.

In addition to the human suffering, the extraction of coltan and other industrial minerals also causes environmental damage and habitat destruction. However, this type of artisanal mining is critical to an economy where there are few alternatives. Workers who produce 1kg of coltan a day may earn $10 to $50 a week, a good wage by Congolese standards.

While the Dodd-Frank bill doesn't set out to ban mineral imports from the DRC, legitimate operators in the region fear this outcome. As John Kanyoni, head of the North Kivu exporters association, told the tin mining association ITRI: "By asking all the manufacturers to track every piece of metal in every single item they make, it is just telling them don't buy from DRC and adjoining countries -- which is an embargo de facto. The consequence of the U.S. regulations will be that thousands of Congolese will be jobless and might most probably be joining the armed groups."

Smelters in Malaysia and Rwanda are the primary destinations for minerals from the DRC and at least two stopped sourcing minerals in the region last year alone. Abandoning the DRC altogether is a knee-jerk reaction that doesn't fix the country's problems. Having a fully functional DRC government capable of bringing peace and stability to a region where this is none would certainly help.

Meanwhile, some kind of certification scheme similar to the Kimberly Process seems inevitable. Without it, there is no way to provide any degree of assurance to those further down the supply chain that they are not complicit in human rights abuses. As Apple CEO Steve Jobs points out, certifying the source of minerals isn't going to be an easy task for anyone.

Further as the Kimberly Process and other multi-stakeholder initiatives illustrate, it takes years to develop, implement and see any traction from these international accords.

Undaunted, however, there is at least one effort already under way to move towards more responsible mining practices in the DRC. The ITRI, who "aim to work towards a sustainable tin mining industry," are working to develop voluntary industry declarations [PDF] or an audited certification program for cassiterite. While nascent, these efforts are step in the right direction that could probably use broader support from governments, civil society and the private sector.

Meanwhile, many firms in the high-tech sector, including Dell, HP, Intel, and Motorola, have been trying for years to ensure their suppliers don't use conflict minerals. HP is one that has worked with its key suppliers since 2001 to avoid tantalum sourced from the DRC altogether and issued a release supporting the Dodd-Frank legislation. While Intel publicly supported the bill also, that didn't stop passionate consumers and issue advocates from using the company's Facebook page to accuse the company of attempting to water it down.

For other manufacturers whose supply chain responsibility efforts are less well developed than these Silicon Valley icons, there will undoubtedly be a scramble to certify the source of their raw materials and get up to speed with good sourcing practices through the EICC and other industry forums.

Once enacted, the Dodd-Frank bill gives companies about six months to report to the Securities and Exchange Commission (SEC) regarding their DRC "exposure." The law doesn't impose penalties on companies who report taking no action if they find they are sourcing from the DRC, but information regarding their sourcing practices has to be independently verified and published on their websites.

One consequence of the bill may be that manufacturers end up disclosing details about their supply chain partners, manufacturing processes, product designs and operating systems that they previously wouldn't have dreamt of sharing. This level of transparency may be required, however, to help consumers, regulators and other stakeholders better understand whether conflict minerals are material to their business and whether companies are positioned to positively influence change.

Such disclosures will make many companies understandably uncomfortable, and I predict there will be rigorous discussion regarding what constitutes proprietary information and what can realistically be disclosed. My hope, however, is that companies disclose sufficient information to educate stakeholders regarding this issue, and to allow them to make truly informed decisions and draw correct conclusions regarding companies' sourcing practices.

While this legislation is an important step, getting consumers to care -- let alone change their behavior -- is an equally important step. Consumers arguably have a higher-than-ever awareness of CSR issues these days, particularly with regard to labor rights and working conditions at factories that make consumer goods.

At the same time the news about the financial reform law's conflict minerals impacts hit the airwaves, the New York Times reported on Nike's efforts to pay "severance" to workers after vendors in Guatemala closed their factories, while earlier this year there were reports about a string of worker suicides. Given the success of campaigns such as " No Dirty Gold" and consumer parlance regarding "blood diamonds," I'm confident that getting consumers to care about conflict minerals won't be much of a stretch.

Ultimately, that's what the Dodd-Frank bill is all about: Raising awareness of a critical issue, encouraging companies to be more transparent, and enabling consumers to make more informed choices. Hopefully these efforts help bring an end to the trade of conflict minerals and in some small way usher in an era of peace and stability in the DRC where its legitimate mining industry may thrive and foster a more prosperous and promising future.

Doug Bannerman is senior consultant for Two Tomorrows (North America). Two Tomorrows is a global sustainability consulting firm with services in communication, strategy development and implementation, training and assurance;

Photo CC-licensed by greenhem.

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