A U.S. bill aimed at preventing armed groups from enriching themselves and funding conflict through the sale of minerals is effectively an embargo on the Democratic Republic of Congo, according to an industry group.
“We are totally shocked by the passing of this bill which is in spirit an embargo on materials from DRC and adjoining countries,” said John Kanyoni, head of the Association of Mineral Exporters in Congo’s eastern North Kivu province.
An amendment to the financial reform bill, passed by the Senate July 15, requires companies buying coltan, cassiterite, wolframite and gold from Congo and its neighbors to certify the purchases aren’t funding armed groups. War in Congo killed more than 3 million people from 1998 to 2007, says the International Rescue Committee, and rebels still roam the mineral-rich east of the country.
The demands of the bill are infeasible, Kanyoni wrote yesterday in an open letter to the U.S. embassy’s economic consular in Congo. The requirements will also undermine efforts to increase transparency in the trade, he said.
Congo is Africa’s largest producer of cassiterite, or tin ore, making up 6 percent of world output. It’s also home to the biggest undeveloped gold deposit on the continent, held by a joint venture between Randgold Resources Ltd. and AngloGold Ashanti Ltd. More than 80 percent of the country’s gold trade is unregistered, according to mines ministry estimates.
Minerals from the nine countries adjoining Congo, including Angola, Tanzania, Rwanda and Uganda, also require certification that they are “DRC conflict free,” according to the bill.
Human Rights
Activists and humanitarian groups applauded the amendment, which gives the U.S. Securities and Exchange Commission nine months to come up with an implementation plan. U.K.-based Global Witness called the bill’s passage a “breakthrough against conflict and corruption,” according to an e-mailed statement. U.S.-based Catholic Relief Services said on its website that the bill was a “huge victory for those ravaged by conflict.”
“The world moved a step closer to ensuring that the supply chains for our laptops and cell phones do not finance violence in eastern Congo,” John Prendergast, co-founder of the U.S.- based Enough Project, said in an e-mailed statement July 15.
The New York-based Jewelers of America trade group was “very concerned” the bill “could encourage jewelry companies to avoid trading in gold from the region, in order to bypass the issue completely,” it said yesterday on its website.
The amendment, introduced by Senator Sam Brownback (R-KS), is expected to be signed into law by President Barack Obama next week along with the financial reform bill.
To contact the reporter on this story: Michael Kavanagh in Kinshasa atmkavanagh9@bloomberg.net
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/20/AR2010072006212.html
U.S. financial reform bill also targets 'conflict minerals' from Congo
The financial regulation bill thatPresident Obama will sign into law on Wednesday is supposed to clean up Wall Street. But an obscure passage buried deep in the 2,300-page legislation aims to transform a very different place -- eastern Congo, labeled the "rape capital of the world."
The passage, tucked into the bill's "Miscellaneous Provisions," will require thousands of U.S. companies to disclose what steps they are taking to ensure that their products, including laptops, cellphones and medical devices, don't contain "conflict minerals" from the Democratic Republic of the Congo. The sale of such minerals has fueled a nearly 15-year war that has been marked by a horrific epidemic of sexual violence.
The issue of "conflict minerals" was barely mentioned during congressional debate on the Wall Street bill. But it has attracted growing concern from an unlikely alliance of conservatives and liberals -- from Sen. Sam Brownback ((R-Kan.) to feminist Eve Ensler, author of "The Vagina Monologues." Activists hope to ultimately see an international system for curbing the trade, such as the one that has slowed the sale of "blood diamonds" from West Africa.
"This is one of those issues that is below the radar for about 99.9 percent of Americans. . . . Everyone has their cellphone up against their ear, nobody is thinking of Congo or conflict minerals. But everybody's got some, potentially, right next to their ear," said Rep. Jim McDermott (D-Wash.), speaking recently at the Center for American Progress.
Although little noticed by the public, the provision in the regulatory bill could have a broad impact. It applies not only to electronics companies, which are major users of Congolese tantalum, but also to all publicly traded U.S. firms that use tin and gold.
"This is a law that is going to affect virtually the entire U.S. manufacturing sector," said Rick Goss, vice president of environment at the Information Technology Industry Council.
Charting new territory
Congo "conflict minerals" law is the first of its kind in the world, Goss said. European governments are pondering similar steps, even as U.S. officials and industry experts caution that the murky nature of the conflict makes it difficult to trace the minerals.
The war in Congo began after the 1994 genocide in neighboring Rwanda, which sent streams of militiamen across the border. An estimated 5 million people have died since in mineral-rich eastern Congo, in one of the bloodiest conflicts since World War II. Hundreds of thousands of women have been sexually assaulted in what U.N. envoy Margot Wallstrom referred to in April as the world's "rape capital."
Congolese activists, U.N. experts and nongovernmental groups have become increasingly concerned that armed Congolese groups are financing themselves with minerals such as gold and the "three T's" -- tin, tungsten and tantalum. The minerals are extracted from remote Congolese mines and smuggled to neighboring countries.
Congo is the source for an estimated one-fifth of the world's tantalum, as well as smaller percentages of the other three minerals.
During her trip to Congo last year, in which she held an emotional meeting with rape victims, Secretary of State Hillary Rodham Clinton called for greater international action to stem the flow of the minerals.
The issue got tied to the financial reform bill largely because of Brownback, who had previously introduced legislation on "conflict minerals." He sought to attach an amendment to the bill, and Sen. Christopher J. Dodd (D-Conn), chairman of the banking committee, supported it, congressional staff said. In the end, Brownback voted against the overall bill, but his amendment survived.
The new law requires American companies to submit an annual report to the Securities and Exchange Commission disclosing whether their products contain gold, tin, tungsten or tantalum from Congo or adjacent countries. If so, they have to describe what measures they are taking to trace the minerals' origin.
The law does not impose any penalty on companies who report taking no action. But the disclosures must be made publicly on firms' Web sites.
"The consequence is a market-driven one. Consumers can make their choices. Do they want their electronic products to be funding gang rape in central Africa? I don't think most Americans would want that," said Rory Anderson of the World Vision humanitarian group, which has been pushing for the legislation.
'We need to toughen up'
U.S. executives say it can be exceedingly difficult to figure out whether there are "conflict minerals" in their products. Such minerals may, for example, be smuggled from Congo through Rwanda, mixed with ore from other countries in a smelter in Kazakhstan and then sold to a company in Southeast Asia that supplies a parts manufacturer in China.
Many firms in the high-tech sector have been trying to ensure their suppliers don't use "conflict minerals," jointly running a pilot program at smelters to identify where minerals come from.
Robert Hormats, the undersecretary of state for economic affairs, said in an interview that tracing the source of minerals is much more complicated than tracing the source of diamonds. For one thing, he said, diamonds "aren't melted down." In addition, the rebels sometimes gain or lose control over mines.
Still, the State and Treasury departments are examining possible sanctions against U.S. companies that use "conflict minerals."
"We need to toughen up. Sanctions is one way," said Hormats, who has been working with industry to improve accountability.
Some companies said they welcomed the law. Michael Holston, the general counsel of HP, the Palo Alto, Calif.-based computer maker, applauded the measure, saying it would "help reduce some of the factors that have contributed to the civil war" in Congo.
Both industry experts and advocates said the law is one step in solving a much larger conflict.
"What really needs to happen is the international community needs to redouble its efforts to bring an overall diplomatic [solution] to what's going on in Congo," Goss said.
