Special Report | Beyond Blood Diamonds: Conflict, Campaigning and the Congo
New in Ceasefire, Special Reports - Posted on Monday, October 1, 2012 0:00 - 1 Comment
In late August, the U.S.’s stock market regulator voted to require companies to report on the source of certain metals that they use in their products. While on the surface this may seem mundane, the impact and origins of this new regulation are largely in the Congo, where for nearly 15 years an ongoing conflict partly fuelled by minerals that end up as metal components in our electronics has claimed the lives of over 6 million people – the highest war-related death toll since World War II.
The regulation issued by the U.S. Securities and Exchange Commission (SEC) was the culmination of years of targeted advocacy efforts to bring peace to the eastern regions of the Democratic Republic of the Congo (DRC) by ending the trade in ‘conflict minerals’ – metal ores which have been used by a variety of rebels, militia, neighbouring armies and vicious units of the Congolese military to buy weapons, enrich commanders, and terrorise civilians. Minerals, as well as other natural resources and taxation rackets, are a multi-million dollar business for these armed groups, thus providing both the incentives as well as the means to attack villages and abuse civilians.
While the war in the Congo began in 1998, reports of the links between the illicit minerals trade and armed group financing did not surface until a UN panel of experts submitted their findings back in 2001, noting that the exploitation was both ‘systematic and systemic’.
Moreover, the revelation was not merely another depressing bullet-point to add to the litany of horrors and tragedies afflicting a far-off African country; the trade in conflict minerals implicates virtually anyone who owns a cell-phone or computer. After being mined at gunpoint, stolen by soldiers, or illegally taxed at a roadblock, these minerals find their way to international markets, where they are smelted into metals, and often end up as essential components of electronic gadgets and in jewellery.
It took several more years, and many more reports by the UN and non-governmental organisations (NGOs), until a grassroots movement developed to raise awareness of this link between our consumer electronics and a massive war half a world away. As a result of NGO and student group pressure, American, Canadian, and European politicians, among others, began to take steps to address the issue.
In the U.S., bills were introduced in the Senate and House of Representatives in 2008 and 2009. Likewise, Canadian Members of Parliament introduced a bill and a motion in 2010, and in January 2012 the European Union expressed interest in promoting greater transparency in minerals supply chains. Civic and student activists have also been successful in convincing their governments and universities to commit to supporting conflict-free initiatives, including Pittsburgh, California and the University Pennsylvania.
In the summer of 2010, in the wake of the global economic downturn, the U.S. passed the Dodd-Frank financial reform act, which gave concerned legislators an opportunity. Towards the end of the 2,300-page law, a provision entitled ‘Conflict Minerals’ was introduced, which called on the SEC to issue regulations requiring companies using such minerals to report whether or not they come from the Congo or an adjoining country (since much of the minerals from the Congo’s war-torn east transit through its neighbours, as detailed below), and, if so, what efforts they have undertaken ‘to exercise due diligence on the source and chain of custody of such minerals,’ including an independent audit.
In other words, if the minerals come from the Congo or one of its neighbours, companies were now required to describe what they have done to find out where exactly the minerals came from and whose hands they passed through. The act doesn’t say companies are forbidden from using minerals that fuel war in the Congo – it just requires them to tell us. In fact, this was a fairly pro-market measure, as it simply says consumers should have the right to know which cell-phone, computer or ring is putting money into the hands of brutal killers, and thus be able to make their own decisions.
Although it was required to promulgate the regulations in April, 2011, the SEC missed the deadline. It faced considerable pressure from business groups, notably the U.S. Chamber of Commerce and the National Association of American Manufacturers. Indeed, the Chamber threatened to sue the SEC if it issued the rules, a threat that still lingers.
On August 22nd, 2012, advocates for peace in the Congo and greater transparency in companies’ sourcing practices won a huge victory, as the SEC finally promulgated the regulations, which will soon require companies to find out and tell us if their products contain parts that fuel mass violence.
This victory – as well as the issue and campaign more broadly – echo an earlier advocacy triumph from a decade ago. In the late 1990s, two NGOs, Global Witness in the UK and Partnership Africa Canada, discovered that rebels in Angola and Sierra Leone were using diamonds to fund their war efforts – leading campaigners to coin the terms ‘blood diamond’ and ‘conflict diamond’.
Outraged that consumers around the world may be contributing to these horrifically violent wars (which would subsequently spread to Liberia as well as the Congo), activists tirelessly organised and lobbied governments and companies for several years, eventually leading to the establishment of the international Kimberley Process (KP) in 2003. This system, which requires members to pass KP-related legislation, regulates the global trade in rough (pre-cut and -polished) diamonds. The KP includes 77 countries, which covers over 99% of the international rough diamond trade.
Although the scourge of conflict diamonds is not yet over (diamonds continue to fund violence in Zimbabwe, the Central African Republic, and until recently Côte d’Ivoire), the situation has improved dramatically in the last ten years: whereas conflict diamonds once accounted for roughly 15% of all diamonds sold, that number is now down to less than 0.1%.
While the Kimberley Process focuses solely on rough diamonds, the SEC regulations on conflict minerals from the Congo encompass four metal ores – tin, tantalum, tungsten, and gold – each of which has different uses and go through different international supply chains. Seeing how infrequently at least two of these minerals come up in casual conversation, campaigners have dubbed them the ‘3Ts plus Gold’.
Much of the armed groups’ funds from conflict minerals come from the less-obscure metals tin and gold. Tin is often used in circuit boards as a solder; 50% of the world’s tin goes into electronics, which largely replaced lead solder due to environmental concerns. Gold, a good conductor, is used in such wiring as audio and USB cables. Tantalum, also known as coltan, is used to make capacitors, which store electricity in cell-phones and computers. Tungsten is used in the manufacturing of integrated circuits and causes phones to vibrate.
Once these minerals leave the Congo eastward, often smuggled across neighbouring Uganda, Rwanda and Burundi, they reach Kenyan and Tanzanian ports on the Indian Ocean where they are shipped largely to East Asia (for the 3Ts) and Dubai (gold), among others, to be smelted into metals. At this point they are often mixed with minerals from other countries, concealing their origin. They then pass through a variety of hands as they are made into different components or jewellery before reaching consumer markets worldwide.
Despite the humanitarian urgency in eastern Congo – indeed, since April over 270,000 people in have been displaced by fresh rounds of fighting – the SEC ruling includes a two-year ‘phased-in’ component, meaning relevant companies will not file their first disclosure reports until 31 May, 2014, and annually thereafter.
While this aims to give companies time to investigate their mineral supply chains and sources (fully cognizant of the bad publicity they will receive by activists if their reporting shows little effort to eliminate their use of conflict minerals), they have been aware of this issue for years, not solely because of UN reports and NGO pressure, but because some of their competitors, including Dell, Intel, HP and Motorola, have been taking the initiative to clean up their acts. Some industry associations have also become involved, including the creation of the Conflict-Free Smelter program, the World Gold Council’s Conflict Free Gold Standard and Tools, and the Conflict-Free Tin Initiative, announced in September.
Not all companies, however, have felt the need to take meaningful action to eliminate the scourge of conflict minerals. The non-profit Enough Project released its second ranking of electronic companies’ efforts on the issue in August. While Intel, HP, Philips, RIM, Dell, Apple, Motorola and others top the list, a number of well-known brands – including Nintendo, Sharp, Nikon, and Canon – appear to have done the bare minimum, if anything.
To have maximum impact, the EU, China and other major global economic players need to push for meaningful and harmonised international standards. To that end, in May 2011 the Organisation for Economic Co-operation and Development (OECD) put together the Due Diligence Guidance for Responsible Supply Chains of Minerals, a blueprint that details the steps companies should take to help ensure that their minerals sourcing isn’t funding conflict. If mandated through legislation, the guidance can go a long way towards effectively curbing minerals from funding conflicts in the Congo, and elsewhere.
Minerals are not the only sources of armed groups’ funding in the Congo. With a variety of other natural resources to exploit and economic activities to illegally tax, in addition to support from neighbouring governments, conflict minerals constitute an estimated 40% of their profits. Minerals, however, seem to be the only resources destined for international markets – and therefore consumers like us – rather than for local or regional consumption.
Conflict minerals regulations are not a silver bullet and only a part of the solution – the end game, after all, is not simply conflict-free electronics but peace in the Congo. To achieve this, much more international engagement is required to deal with the multiple and complex roots of the conflict. Nevertheless, depriving armed groups of a major source of their funding will deal a major blow to their ability to amass weapons and keep the war going, undermining their military strength and therefore leverage in peace negotiations.