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25/08/2016

EU institutions still divided over conflict minerals

Development Policy

EU institutions still divided over conflict minerals

Many SMEs cannot trace the origin of the minerals they use.

[Image Journeys Sasha Lezhnev/Flickr]

A new round of negotiations has begun in Brussels to try to reach a compromise on conflict minerals. But the process has stalled over disagreements on supply chain monitoring. EurActiv France reports

“Trade is an excellent weapon to eradicate poverty in developing countries,” the European Commissioner for Trade Cecilia Malmström said at a press conference in Amsterdam on Tuesday (2 February).

The Commissioner was speaking after an informal meeting of EU development and trade ministers, an unusual combination thought up by the Dutch EU Presidency, which took over on 1 January.

But this guest list was no coincidence: the Netherlands is one of the few member states where one minister has responsibility for both foreign trade and development cooperation.

Trade and development

There is no shortage of subjects linking development policy and trade in the European Union this year.

Lilianne Ploumen, the Dutch Minister for Foreign Trade and Development Cooperation, said, “We addressed the question of the Kimberly process, but also the legislation on conflict minerals, on which the negotiations should be concluded during the Dutch Presidency.”

>> Read: Parliament votes for tougher conflict minerals regulation

The European Parliament has held spirited debates on the regulations concerning imports of gold, tantalum (the material that makes mobile phones vibrate), tungsten and tin from conflict zones.

A majority of MEPs are in favour of establishing monitoring requirements along the whole supply chain for importers of minerals, smelters and refineries, as well as for European producers of manufactured goods (mobile phones, tablets, washing machines, etc.).

>>Read: Smartphone batteries linked to human rights violations

This binding mechanism would ensure that minerals sold on the European market are not used to finance conflicts, particularly in the Democratic Republic of the Congo’s Great Lakes region.

Firm stance

But there is a wide gap between the proposals of the Parliament and those of the member states, which broadly support a non-binding opt-in system.

“We want clean and responsible trade. That is why we are advocating a binding regulation that applies not only to raw materials, but also to the finished products we consume in Europe,” said Marie Arena, a Belgian Socialist MEP who is involved in the negotiations.

“But the Council is very resistant to this idea, and it is proposing a voluntary system that would only be applicable to companies that import minerals and metals. This position is even weaker than the Commission’s proposal. It is just a way for Europe to clear its conscience without having any real impact on the ground or on business practices,” she added.

To close the gap between the institutions on this issue, Commissioner Malmström said she would defend a compromise between the two positions.

>>Read: EU drafts conflict minerals law, with opt-in clause

Malmström told the press, “We have reached a consensus on a number of important subjects, but the main remaining problem is the choice between a voluntary or compulsory system.”

The Commission has recommended the implementation of a compulsory system on just one part of the supply chain.

“We should not forget that European companies, and particularly our SMEs, are currently not able to identify every step [in their supply chains], so we can’t impose impracticable constraints,” the Commissioner said. “This is what we saw with Dodd-Frank in the United States,” she added.

The American example

The United States has adopted a binding system for verifying the origin of the minerals it imports.

But despite being hailed as a model piece of legislation, a critical report by the NGOs Global Witness and Amnesty International found that the highly restrictive American law is not widely enforced.

Positions

Iverna McGowan, the director of Amnesty International's European Institutions Office, said, "What European governments are proposing has already flat-out failed to stop trading in conflict minerals, the profits from which can be used to fund armed groups inflicting insufferable violence on local communities. Only a strong, mandatory law can ensure people in the EU are not buying products that fuel serious human rights abuses on a daily basis."

Emily Norton, a conflict resources campaigner at Global Witness, said, "We’ve seen a huge amount of hand-wringing from EU leaders about the impact of conflict but now they’re failing to help change a trade which is driving conflict, corruption and instability around the world. This is incoherent and short-sighted foreign policy." 

Guy Thiran, the director general at Eurometaux, the European metals association, said, “For EU conflict minerals regulation to be effective, all parts of the supply chain, including importers, need to be engaged consistently; whether through voluntary or mandatory requirements. If that’s compromised during trilogue negotiations, European smelters could be disadvantaged against those in other areas of the world, despite our high standards from industry-led due-diligence schemes. All this while the EU door remains open to imports of goods containing conflict minerals.”

Verena Haan, an economy expert at Amnesty Germany, said "For companies that voluntarily want to forego conflict minerals, there is a lack of guidance. They often do not know exactly how to go about it. The European Commission and the governments of many EU countries are under the influence of many large business organisations that clearly speak out against transparent due diligence.”

Background

Conflict minerals are minerals mined in conditions of armed conflict and human rights abuses, mostly in the eastern provinces of the Democratic Republic of the Congo (DRC). The looting of the Congo's natural resources is not limited to domestic actors; during the Congo Wars, Rwanda, Uganda and Burundi particularly profited from the Congo's resources.

The most commonly mined minerals are cassiterite, wolframite, coltan and gold, which are extracted from the Eastern Congo, and passed through a variety of intermediaries before being purchased by multinational electronics companies.

Since 2003, the European Commission has been a high profile donor to Congo, particularly in the country’s unstable east. The EU’s Country Strategy Paper for the 2008-2013 period, under the 10th European Development Fund, pledges some €583 million of European funds to the country from DG Humanitarian Aid and Civil Protection (ECHO).

This is supplemented by funds from the EU general budget under the Development Cooperation Instrument, and funds for other bodies such as the European Instrument for Democracy and Human Rights, the Instrument for Stability, Eufor RD Congo, Eupol RDC, and Eusec RDC. 

Further Reading