EU conflict minerals bill still three years from becoming reality

Minenarbeiter im Kongo. [Julien Harneis/Flickr] [Julien Harneis/Flickr]

Nearly a year after being signed off by MEPs and ministers, the EU’s long-awaited conflict minerals law is still three years from going live.

Ensuring that it is more than a bureaucratic paper-tiger continues to exorcise EU policy-makers, civil society and companies.

Addressing MEPs in Strasbourg on Thursday (15 March), EU Trade Commissioner Cecilia Malmstrom described the bill as part of the EU’s “value-based trade agenda”.

The EU’s conflict minerals law is aimed at ensuring that importers of gold and tungsten, as well as tin and tantalum, which are key components in mobile phones, laptops and other consumer electronics, as well as cars, planes and engines, do not use minerals used to fund armed groups.

But it has already had a difficult path. The initial proposal made by former Trade commissioner Karel de Gucht was entirely voluntary and was beefed up by the European Parliament and de Gucht’s successor, Malmstrom.

The 2016 regulation only requires compulsory reporting by firms in one part of the supply chain – ores – meaning that companies will not have to report on imports of finished products or products that may contain conflict minerals in their supply chain.

That falls below the standards set by the Paris-based Organisation for Economic Co-operation and Development (OECD), which applies to the entire supply chain.

Though approved by MEPs and ministers in 2017, the EU regulation has a long phase-in period and does not come into force until 2021.

Malmstrom told MEPs that the regulation “will not solve the problem fully.”

“We want to avoid any loopholes,” said Bernd Lange, the German Social Democrat who chairs the Parliament’s International Trade committee. “This only covers 35% of minerals,” he added.

 

Global Witness: Conflict mineral import loopholes would pay for 6,000 AK-47s

Europe’s efforts to promote more transparent and responsible mineral supply chains now risk being undermined by a series of loopholes carefully branded as “import thresholds”, writes Michael Gibb.

“This is an important step forward, but we’re now looking to the EU to make sure it is properly implemented and enforced,” Michael Gibb, campaign leader on conflict resources at Global Witness, told EURACTIV.

“The downstream transparency database could be a really helpful tool, but action from most of these companies remains voluntary. The problem with voluntary schemes is that anything you do counts as good. We’ve got to move beyond the point where companies can simply ‘showcase’ what they are doing, even if it falls well below international standards. It’s only going to be useful if it pushes companies to do better,” he added.

Malmstrom also left the door open to expanding the scope of the regulation to other minerals when the EU executive conducts a review of the bill in 2024.

The EU bill is not the first of its kind.

Section 1502 of the US Dodd-Frank bill reforming the financial sector, adopted in 2010, requires manufacturers to check their supply chains and report and make public any instances of conflict minerals being used from the Democratic Republic of Congo and its neighbours.

The US Securities Exchange Committee suspended enforcement of due diligence requirements in April 2017, following a court case, but the bill has not been repealed.

Meanwhile, China is adopting its own voluntary reporting legislation and there are discussions on a similar law in India.

Governments are expected to draw up national sanctions regimes and competent authorities to police the law.

Only five member states were yet to appoint a national authority to oversee reporting and sanctions, Malmstrom told MEPs.

More controversially, the Commission is currently working with the OECD on a scheme to accredit private industry schemes that comply with the new rules.

Malmstrom insisted that only schemes which “fully respect” the OECD’s Due Diligence Guidance would be accredited.

“Certificates and self-policing have always been the preferred model of industry,” said Gibb.

He warned that, if accreditation was not “robust, it could undermine the law and offer “a distorting market advantage to those involved”.

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