With the defeat of the M23 rebels in the Democratic Republic of the Congo (DRC), this vast blighted country is poised for a brighter future. But a new US law designed to help the region escape its poverty looks set to do just the opposite.
The law is meant to end the trade in minerals produced in areas of armed conflict and human rights abuses – so-called conflict minerals. The DRC is rich in tantalum, tin, tungsten and gold (3TG) – widely used in manufacturing, including electrical and electronic products. Many of the mines in the DRC have been controlled by rebels who extort money from mine owners and use forced labour to dig the ore.
Because of the chaotic conditions and weak governments in the region, it is hard for industrial buyers to tell the difference between legitimate and conflict minerals. Their job is further complicated because the minerals are exported for smelting in distant countries.
But in fewer than two months, US companies must comply with a clause in the Dodd Frank Act which demands they disclose the presence of conflict minerals in their supply chains. The EU is preparing similar legislation.
By far the easiest option for mineral buyers is to avoid any sources that could come from the DRC and surrounding region. But this would mean the end of painstaking efforts by NGOs and concerned companies which have been trying to set up tracing systems to save conflict-free mines in the DRC and neighbouring countries.
The NGOs are supported by a small group of electronics companies including Intel, Philips and a company we have worked with, HP. This group is trying to persuade industry peers of the need to support DRC trade, through multi-stakeholder organisations, the US Public Private Alliance for Responsible Minerals Trade (PPA), and the Electronics Industry Citizenship Coalition (EICC). They also collaborate with specialist NGOs Enough and Resolve.
The multi-organisation group is working with two projects in the DRC to demonstrate the feasibility of sourcing verified conflict free minerals. One is Solutions for Hope, focused on tantalum, and the other is Conflict Free Tin Initiative (CFTI), bringing together companies such as Tata Steel, BlackBerry and Fairphone, operating in what the Dodd Frank Act defines as "covered countries".
"Some companies may avoid the covered countries to ease compliance requirements under the Dodd Frank Act, which may cause more hardship for the people of the DRC," says Jay Celorie, HP's global program manager and founding member of the PPA.
Mining in the region is quaintly termed 'artisanal' which means shovels, tunnels and ladders with low capital investment. It's daunting to set up adequate security and governance to guarantee that ores are genuinely free from interference when exported for smelting. In addition to finding companies willing to purchase the conflict-free product, it needs cooperation between the governments of DRC and Rwanda to provide security and stability.
A spark of hope for conflict-free mining in DRC came in 2012 when the Solutions for Hope project started producing verified conflict-free tantalum from a cooperative in Northern Katanga province. The mine is now producing regular shipments and is viewed as the role model for establishing a secure supply of conflict-free minerals from the region.
A new tantalum mine is being assessed to expand Solutions for Hope to Goma in North Kivu. If this mine meets the OECD Due Diligence requirements, it will be a first for the formerly war-torn province of North Kivu.
The CFTI has established a pilot tin mine in Kalimi in South Kivu Province. But progress in establishing a conflict-free supply from this mine has been hampered by the provincial government imposing a tax on conflict-free tagged material. The tax has effectively promoted bad mining. If US companies flee the market in anticipation of the new law, buyers from other countries with less well-established transparency obligations may well becoming the main customers for unverified minerals.
A select few electronics companies have energised the initiative to encourage conflict-free mining. But many companies that use the minerals, notably car and plane makers, have stood back and refused to use their buying power to bring change. Unless a broader coalition of industries gets behind pioneering conflict-free sourcing work, the DRC may remain in economic darkness.
Simon Propper and Peter Knight are co-founders of CONTEXT a sustainability strategy and communications consultancy
