1502-1503 Working Group News on Natural Resources - February/March 2015

Regulation Responsible Sourcing of Minerals from Conflict-Affected and High Risk Areas

Currently, the European Parliament (EP) is discussing a draft for a Regulation[1] on the responsible sourcing of minerals from conflict affected and high risk areas, which was proposed by the European Commission in order to break the link between minerals, conflict (financing armed groups) and Human rights abuses. Civil society has been overviewing the process the past year and has raised concerns regarding the voluntary character of the as well as the scope of companies and minerals (tin, tungsten tantalum and gold) included. That being said, it is positive that the proposal has broad geographical scope and is not limited to one region (i.e. Great Lakes region in US Dodd-Franck Act). The main issues of the original text of the European Commission are briefly discussed below.


Firstly the voluntary character of the law is problematic, because it is very unlikely to change company behavior to source responsibly. A study of SOMO[2] revealed that companies using tin, tantalum tungsten and gold (3TG’s) and not bound by binding law (i.e. US Dodd-Frank Act), rarely make mention of efforts to avoid sourcing conflict minerals: 88% of the surveyed companies made no mention on their website. A study by the European Commission[3] is even more pessimistic; only 7% of surveyed companies make reference to due diligence efforts regarding conflict minerals. In the Commission proposal companies could “opt in” to ensure due diligence on conflict minerals, a far cry from obliging companies to clean up their supply chains.    


Secondly, in the original proposal the company scope is too narrow: merely 0,05% of companies trading or processing 3TG minerals will be affected. The current text only concerns about 400 companies that are the primary importers of 3TG’s. However, to have more impact on global markets and clean supply chains, the EU should include end-user companies, i.e. companies importing laptops, smartphones, cars, etc.; or components of such products, containing 3TG’s. 


Thirdly, the minerals concerned are limited to tin, tungsten tantalum and gold, while other minerals and natural resources have been conflict such as copper, diamonds, iron ore, zinc, coal and oil, etc.. There should be space to phase in such minerals in a legislation regarding conflict minerals.


Fourthly, in the original proposal accompanying measures are mainly focused on incentives for companies to make due diligence efforts in their supply chains. However, very little attention goes to strengthening the capacity of local actors. In the first place artisanal miners, who contribute to local livelihoods and they are linked up with other sectors of the local economy. Next, accompanying measures should increase efforts to address the root causes of violent conflicts; land disputes, reconciliation between ethnic groups, etc.   


However, the original proposal has been watered down even more by International Trade (INTA)[4] Committee of the EP, who has the lead in this file. Mainly, Trade Committee wants to award a two year opt-in period for companies to comply with scheme that is already voluntary. INTA wants to allow companies to decide “at their own speed” to avoid conflict minerals in their supply chains. However, there are signs of hope in the EP, with both the reports from the Development Committee (DEVE) and Foreign Affairs (AFET) Committee asking for mandatory due diligence requirements for companies. AFET also calls to broaden the company scope to include “public-interest entities and large undertakings that manufacture or contract to manufacture products containing tin, tungsten, tantalum and gold.[5] However, both Committees fail to broaden the scope of minerals concerned. In the coming weeks AEFJN will follow up this file and we will have a twitter action and an email campaign. So keep an eye on our website and twitter account in the coming weeks.  

Gino Brunswijck

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