Getting Their (s1502) Act Together; Let’s Talk Conflict Minerals
In 2010, US Congress passed section 1502 of the Dodd-Frank Act. This rule requires publicly traded companies to disclose the use of conflict minerals in their manufactured products, to determine whether those minerals originated in the Democratic Republic of the Congo (DRC), and if so, ensure that the supply chain did not fund armed groups. The aim: to prevent companies from fueling regional conflict in the DRC and increase transparency within the mineral supply chain.
Conflict Minerals refer to four types: Tantalum, Tungsten, Tin and Gold (the 3TGs). All electronic products require a combination of these minerals to function (and yes, the phone or laptop you are currently reading this article on contains these minerals too). While the DRC remains one of the poorest countries in the world, its reserves are estimated to be worth $24 trillion.
The extraction of these minerals has aided and fueled the ongoing war in the DRC, and has contributed to unimaginable human rights abuse, violence, and deaths. Conflict minerals fund armed groups who use the revenue to purchase weapons and terrorize civilians. These armed groups also make enormous annual profit from illegal taxation on the transportation of minerals on routes they control. Business for Social Responsibility reported that in 2008, armed groups in the Eastern DRC made about $185 million in revenue from mineral trade. These rebels seek to terrorize villages because civilians are easier controlled and coerced into work when the region is unstable. They use rape as a weapon to instill fear, and force children to work in mines for sometimes up to 24 hours. Since 1998, it has claimed the lives of more than 5.4 million people.
Since implementation section 1502, various responsible sourcing initiatives have taken shape. For example, the International Tin Supply Chain Initiative and other private sector led programs provide mechanisms for the “bag and tag” traceability and due diligence schemes. Additionally, the International Conference on the Great Lakes Region runs regional certification and mining validation programs led by 12 African states. Furthermore, a UN report released in May of 2016 revealed that the “traceability system for tin, tantalum and tungsten is becoming increasingly embedded in the country’s mining governance”.
Earlier this month, Responsible Sourcing Network (RSN) released its 6th annual report analyzing corporate compliance of section 1502, which sadly demonstrated a decline in due diligence efforts of many companies. This is in part due to the uncertainties of the current administration, its rejection of regulatory frameworks in almost every sector, the disregard for greater human rights standards and corporations’ lack of social responsibility. If the results of this report are anything to go by, investors and consumers should demand more efforts by companies to address of violence and rapes linked to the conflict minerals embedded in their products.
Carine Kanimba, Business Development
Could Blockchain be a solution to track minerals? Various mining companies are now using blockchain to better track metals as they move from mines to factories world wide.
Companies such as Fairphone are working to develop a cellphone that is built differently — without negative human impact. The company also ensure the phones are built with recycled plastic for the case and Fairtrade gold.
Watch Blood in the Mobile which directly connects cell phone purchases to the civil war in Congo through conflict minerals.
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