EU’s soft power in Congo toothless on ‘conflict minerals’

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Congolese rebels are plundering the country’s natural resources to finance guns and materiel, but the EU remains powerless to compel companies to disclose whether they are buying vital minerals supplied by armed groups in Congo and other conflict states.

Analysts say thefts and smuggling have grown since M23 guerrillas began an offensive 10 months ago in North Kivu and other eastern mining regions that hold abundant reserves of industrial raw materials. The well-armed M23 was formed by Congolese army defectors.

“When M23 took power in Goma in November, the first thing they did was empty all the warehouses of all the minerals,” said Jean-Paul Matuk Munan, who heads a Congolese organisation that campaigns against the small arms trade.

“The future of the world is going to be played in that region,” Matuk Munam told EURACTIV in Brussels, adding that Congo’s resource reserves make it an important counterbalance to China for supplies of raw materials used in mobile phones, computers, jet engines and other manufactured goods.

The EU has major investments in development, humanitarian and peacekeeping efforts in the Democratic Republic of Congo, and supports global measures to the illicit trade in so-called conflict minerals.

Yet the EU, unlike the United States, has no law to compel corporations to disclose the sources of raw materials bought in Congo to ensure that armed groups were not part of the supply chain.

EU under pressure

“It’s absolutely essential that the European Union take steps to issue a regulation that requires companies, not just from Congo but from any high-risk and conflict-affected area, to do due diligence along their supply chains,” said Sophia Pickles, a campaigner at the Global Witness, a London anti-corruption and human rights organisation.

“I don’t think you can find anybody who will argue against the fact that companies should purchase their raw materials in a responsible way, and that’s basically what due diligence is all about,” she said in a telephone interview.

Global Witness has urged the EU to adopt into law the voluntary standards drafted by corporations for the Organisation for Economic Co-operation and Development. The OECD’s conflict minerals guidelines are designed to shed light along the entire supply chain.

The European Commission supports voluntary initiatives on conflict diamonds and has acknowledged the need for more transparency in its year-old Communication on trade, growth and development.

The United States is well ahead in terms of compulsory standards. The US Securities and Exchange Commission last August finalised new rules on corporate disclosure as part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which watchdog groups and human rights campaigners in Brussels see as a model for the EU.

“If the EU introduces something that is along those lines, what we will see is little islands of ‘clean trade’ developing in Congo,” Pickles said. “And the reason I say that is that’s what were are already beginning to see [with] Dodd-Frank.”

Several American business lobbies, including those representing firms based in Europe, are fighting the main provisions of Dodd-Frank – Section 1502, which requires companies to report their use of conflict minerals, and Section 1504, which obliges companies to disclose payments made to the US or foreign governments for oil, gas or minerals contracts.

Last year, MEPs backed a move to enact a law similar to Section 1504, but there is no comparable legislation on conflict minerals.

A number of multinational corporations have backed voluntary reporting measures, including the Conflict-Free Tin Initiative, yet the absence of compulsory laws leaves room for abuse, analysts say.

“Unfortunately, what’s been happening – and this has been going on for 15 years now – companies have been buying minerals and looking the other way because they can get the minerals cheap, in large quantities and quite good quality minerals from eastern DRC,” said Pickles.

EU’s investment in Congo

The EU has high stakes in the Congo conflict. It has promised more than €584 million in development assistance to the country over the past five years and plans another €54 million in humanitarian aid this year. In January, Development Commissioner Andris Piebalgs signed a Peace and Security Framework for the Democratic Republic of Congo and neighbouring states aimed at stabilising the fragile country.

The EU also finances a police and judicial training operation in the country, and forces from several EU nations work with Congo's army to improve its human rights performance and treatment of non-combatants.

Despite its entrenched poverty and conflict, eastern Congo has abundant reserves of industrial minerals, including niobium, tantalum, tin and gold. Tantalum is a relatively rare metal that is used in electronic and computer equipment, while niobium alloys are used in jet engine production, jewellery and pipelines. There are also important diamond deposits.

Relief workers operating in the region say a 10-month advance by rebel forces, aided by neighbouring Rwanda, has disrupted food supplies and encouraged the smuggling of resources to Rwanda, where they then are sold to exporters.

Accusations of using illicit trade in Congo are nothing new, but Matuk Munan says it is growing in the strategic eastern town of Goma and in the mining areas west of lakes Kivu and Tanganyika.

The Group for Research and Information on Peace and Security, a Belgian organisation that monitors the small arms trade, says minerals smuggling is financing eastern Congo’s arms trade, fuelling a cycle of conflict, poverty, fear and instability.

CARE International, one of the charities operating in the region, recently issued a statement warning that insurgent-led violence has led to mass dislocations of non-combatants and a rise in sexual violence.

Donors sanction Rwanda

Last September, the EU and United States froze some development aid to Rwanda on the grounds that the country’s military was supporting rebels in Congo. Rwanda’s government has denied interfering in Congo but maintains a strong military presence on the border.

Matuk Munan said Brussels has done little to back up its verbal condemnations of violence and interference with action.

“The Europeans condemn the actions in the DRC but in reality nothing happens,” he said.

He also accused European companies of benefiting from the chaos and illicit sales of natural resources, though he said he would welcome “equitable commerce” and foreign investment under more stable conditions.

The European Parliament, in a non-binding vote on 13 December, called for an end to factional fighting and called for “transparent access to and control over the natural resources of DRC and equitable redistribution through the State budget, to its population as a whole, of revenue from the exploitation of those resources are indispensable for the sustainable development of the country…” It also urged the establishment of an ethics' code for businesses in the mining and logging sectors.

UN peacekeeping forces, backed by armour and air power, were unable to stop a November advance on the eastern city of Goma, located on the northern shore of Lake Kivu and hugging the Rwandan border. M23 – short for the Mouvement du 23 Mars – gradually withdrew from the city but it remains isolated and many residents fled to relief camps.

UN Secretary-General Ban Ki-moon has asked the Security Council to re-enforce the UN’s 22,000 peacekeepers in Congo, known as MONUSCO, with a rapid intervention force to halt the advance of armed groups in the east.

Though one of the poorest countries in the world, the Democratic Republic of Congo has enormous natural resources, including lumber, diamonds, gold and important industrial minerals. The Revenue Watch Institute says mining accounts for about 28% of the country’s economic output and 90% of exports.

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