The European Union is set to adopt a law that seeks to prevent trading commodities that finance armed conflicts.The US has such a law, and what remains of the European Parliament is to come up with its own version.
Minerals like gold, tin, tungsten and tantalum are essential in the manufacturing of laptops and cell phones. Yet many of such precious minerals originate in areas- mostly in Sub-Saharan Africa - plagued by wars and rebellions for decades.
In eastern Democratic Republic of Congo (DRC), various rebel groups have for years financed their activities through the trade of the so-called conflict commodities. Access to mines in most occassions has become an entry point to starting a war. This has been fueled by the global demand for technical devices which has also contributed indirectly to murder, expulsion and rape in countries such as the DRC.
The European Union (EU) wants to break this vicious circle. For years, the EU has struggled to come up with a concept that is intended to set up requirements for minerals coming from conflict areas. The EU Parliament will discuss the draft law on May 19, 2015, and adopt it the following day. The commission's proposal is that companies that trade in minerals like tin, tantalum, tungsten and gold, whether raw or smelted, must prove that the raw materials do not come from mines in conflict areas.
Voluntary or mandatory?
Michael Gibb, who works for the British-American NGO Global Witness, supports the EU law. His organization has set its goals to uncover and break links between natural resource exploitation.
"What we are asking the European Parliament to do, is to vote in favor of strong conflict mineral regulations that makes responsible, sustainable and transparent sourcing mandatory for all European companies doing business in conflict affected areas, whether they bring in raw ores and metals from these regions or whether they import products into the EU that contain these minerals," Gibb said.
According to Global Witness, the EU is the second largest importer of laptops and mobile phones. Proof of origin of the raw materials will be crucial but according to the EU draft it could be on a voluntary basis.
In the US, since 2010 production chains and IT companies that have to use gold, tin, tungsten or tantalum from the DRC or neighboring countries are aware of the Dodd-Frank Act. In its 1502 section, the act requires US-listed companies to disclose annually whether any conflict minerals that are necessary to the functionality or production of a product.., originated in the Democratic Republic of the Congo or a neighboring country and, if so, to provide a report describing, among other matters, the measures taken to exercise due diligence on the source and chain of custody of those minerals.
Loopholes in the Dodd-Frank Act
"The experience with the Dodd-Frank Act shows that for many companies to provide evidence of origin for the raw materials cannot be achieved. The production chains are too long and too complicated,” said Matthias Wachter, head of security and resources at the Federation of German Industries (BDI). He thinks this should be on a voluntary basis.
But according to Andreas Manhart, a researcher at the Freiburg Institute for Applied Ecology and co-author of a study that examines the impact of the Dodd-Frank Act on behalf of the BDI, the law has meant that in order for many US companies to comply with the law, they have had to completely shun commodities from the Great Lakes region and the DRC.
A boycott of Congolese raw materials could deprive thousands of people's of their livelihood. Critics warn of the risk that the unemployed young men will have no other alternative but to join armed groups.
But the Dodd-Frank Act has also achieved many positive things: "In business and politics, it has become a huge issue, where our raw materials come and the conditions under which they are broken down and how to change that," Manhart said .
Positive incentives needed
"The debate on voluntary or mandatory guarantees of origin of raw materials should not be a sticking point during the forthcoming decision by the European parliament," said Manhart.
"What we need is a bold, and a responsible involvement in conflict zones, and this cannot be achieved through legal regulation. Because you can not force anyone to become involved economically in a conflict zone."