If the European Commission wants to help cool the 40% of inter-state conflicts linked to natural resources, it needs to propose legislation ensuring that European consumers can buy conflict-free goods, says Patrick Alley.
Patrick Alley is the founding director of Global Witness, an NGO which investigates and campaigns against resource-related conflict and corruption.
On a fast-flowing river in the middle of the Colombian jungle three men struggle to navigate a boat laden with sacks of rock through torrid, muddy rapids. Two of them jump into the waist-deep water and attempt to pull the boat from the strongest part of the current. The other mans the tiller as the rain falls hard.
The dark grey rock in the overloaded boat contains the mineral wolframite – the main source of tungsten metal, used in manufacturing around the world. The men are working for the FARC, an armed group that uses revenue from the illegal trade in minerals and drugs to fund their brutal struggle against the Colombian state.
Many thousands of miles away, on a garage forecourt in Europe, a young woman smilingly accepts the keys to her new car, oblivious to the link between the metals used to make it and the violence in Colombia.
These are imaginary scenarios but the link is real. Tungsten, tin, tantalum, and gold, which are mined in Colombia and other conflict zones, are key components of many of the products we use each day, including electronics, cars and jewellery. In the last 60 years, at least 40 percent of interstate conflicts have had links to natural resources, with the Democratic Republic of Congo, where millions have died in the last 15 years, being the best-known example of a resource-fuelled war.
At the beginning of last year the European Commission announced its intention to bring in regulations that would ensure responsible sourcing by European companies of minerals from conflict-affected states like Congo, Afghanistan, Colombia and Burma. This proposal, which was delayed, is now due out on March 6.
Global Witness is urging the Commission to pass legislation, similar to that already adopted in the US, which would give European consumers much more certainty that the products they were buying were conflict-free. We think they should make it compulsory for any company first placing any natural resources – or products containing them – on the EU market to check down their supply chain and ensure that they were not indirectly fuelling conflict.
This checking process is called due diligence. It’s not a new concept. Since the sweatshop revelations of the 80s, clothing retailers have had to get much more rigorous about understanding what their suppliers are doing. Banks are also under increasing pressure to know their customers and ensure they’re not inadvertently facilitating crime or funding terrorism.
The legwork has already been done: the Organisation for Economic Cooperation and Development (OECD) has developed guidelines for companies to do supply chain due diligence. Businesses worked alongside governments and civil society to draft the Guidelines, which have been endorsed by OECD Governments, including EU Member States and the US. The UN has developed a due diligence framework almost identical to that of the OECD.
In the United States, companies reporting under a ground-breaking new American law – the ‘conflict minerals provision’ of the Dodd Frank Act are already required to do enhanced due diligence on products containing mineral from Congo and neighbouring countries. They’ve begun to identify their metal processors and are taking steps to get a grip on their supply chains. In eastern Congo momentum generated by the US law has already prompted some significant positive developments, including the launch of the country’s first responsible supply chain projects.
The EU proposal is an opportunity to build on what the US has started. A European legislative framework that makes doing due diligence – and publicly reporting on it – mandatory would bring EU companies up to the same responsible sourcing standards of their American competitors.
Anything less than a mandatory due diligence requirement – for example a proposal that simply gave EU companies ‘the option’ of sourcing responsibly –risks lowering international standards for responsible business and initiating a race to the bottom. The OECD Guidelines already provide a ‘voluntary’ option for EU companies. Legislation – as the US has demonstrated – is the only way to trigger meaningful changes in the way companies and their suppliers source minerals.
Toothless voluntary guidelines would be a betrayal of the hundreds of thousands of people affected by resource-fuelled wars, and would risk undermining EU aid. They would be tantamount to a failure to support the sacrifice of French troops who are currently risking their lives in the Central African Republic, where the conflict is in part driven by natural resources.
The simple fact is that this is a question of transparency at a time when lives and the fate of nations are at stake. Next month, the Commission has a chance to propose a law that would make a real difference to millions of people in war-torn countries where natural resources are providing an incentive and source of funds for fighting. Anything less than mandatory due diligence will mean they fall short.
- European Commission: Humanitarian aid in 2013
- European Commission: EU Relations with Democratic Republic of Congo
- Commission: Transparency requirements for listed companies [FR] [FR] [DE]
- Commission press release: More responsible businesses can foster more growth in Europe (25 October 2011) [FR] [FR] [DE]
- Commission: Consultation on Financial Reporting on a Country-by-Country Basis by Multinational Companies(October-December 2010) [Summary report of the public consultation] [Summary report of the public consultation] [Contributions by stakeholders]
- US Department of State: Final Rules for Dodd-Frank Sections 1502 and 1504
- SEC: SEC Adopts Rules Requiring Payment Disclosures by Resource Extraction Iss
Business and Industry
- Extractive Industries Transparency Initiative: Clare Short: disclosure requirements complement EITI
- European Association of Mining Industries, Metal Ores & Industrial Minerals
- International Council on Mining and Metals: Transparency in mining sector is on the rise, reveal new figures by ICMM and GRI
- American Petroleum Institute: Analysis of Section 1504 of the Wall Street Reform and Consumer Protection Act (11 February 2011)
NGOs and Think Tanks
- Care International: CARE trains men and women in eastern Congo to detect and prevent sexual violence
- Oxfam: Millions left at the mercy of militias and armed forces across eastern Congo
- Revenue Watch Institute: Democratic Republic of Congo
- Global Witness: Conflict minerals
- ONE International: Bono and ONE praise US oil deal rules, call transparency “the best vaccine against corruption”
- Friends of the Earth Europe:EU must take further steps to hold companies accountable (25 October 2011)