AUGUST 2, 2010: Conflict Minerals Law

Conflict Minerals Law

SOURCE: Africa Focus

There is little doubt that exports of "conflict minerals" -- including cassiterite, columbite-tantalite, wolframite and gold -- controlled by rebel groups and by units of the Congolese army itself contribute to ongoing conflict in eastern Congo. It is more difficult to say how much difference the new legislation requiring transparency from U.S. companies about the supply chain of these minerals will make.

Reacting to the hype of some of the most ardent advocates of the legislation, some critics say it will make little difference and evades the necessity to confront more directly responsibilities of governments, including Rwanda, Uganda, and the Democratic Republic of the Congo itself. Of course there is much disagreement among commentators about the distribution of blame among these governments.

This AfricaFocus Bulletin contains a nuanced discussion of the issue by Jason Stearns, who formerly headed the UN Group of Experts which reported on conflict minerals and says the legislation is to be welcomed although its impact may be limited. His blog (http://congosiasa.blogspot.com/) contains his views, comments, and links to other commentators on the subject.

Also contained in this Bulletin are the remarks by one of the sponsors of the legislation, Senator Russell Feingold, and an extract of the most important provisions from the legislation itself.

For additional background on conflict minerals, see particularly the websites of the Enough Project (http://www.enoughproject.org/conflict_areas/eastern_congo) and of Global Witness (http://www.globalwitness.org/)

Two other AfricaFocus Bulletins released today also deal with the Democratic Republic of the Congo. One, sent out by e-mail and also available on the web at http://www.africafocus.org/docs10/lum1007.php, contains several short articles reporting on new evidence of U.S. complicity in the assassination of Patrice Lumumba. Another, available at http://www.africafocus.org/docs10/cgk1007b.php, analyzes the dangers in continuing collaboration of UN Peacekeeping forces with Congolese government troops.

For previous AfricaFocus Bulletins related to Congo (Kinshasa), visit http://www.africafocus.org/country/congokin.php

For previous AfricaFocus Bulletins on U.S. policy, visit http://www.africafocus.org/country/usa-africa.php

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Feingold Statement on Congo Conflict Minerals and Transparency Amendments to Financial Regulatory Reform Bill

Wednesday, May 19, 2010

http://feingold.senate.gov/record.cfm?id=325061

Mr. President, I am pleased to be an original cosponsor of two amendments to the Restoring American Financial Stability Act that seek to ensure there is greater transparency around how international companies are addressing issues of foreign corruption and violent conflict that relate to their business. Creating these mechanisms to enhance transparency will help the United States and our allies more effectively deal with these complex problems, at the same time that they will also help American consumers and investors make more informed decisions.

Mr. President, I am very pleased that my colleagues agreed yesterday to accept the first amendment, sponsored by Senator Brownback. This amendment specifically responds to the continued crisis in the eastern region of the Democratic Republic of Congo. Despite efforts to curb the violence, mass atrocities and widespread sexual violence and rape continue at an alarming rate. Some have justifiably labeled eastern Congo as "the worst place in the world to be female." Several of us in this body, including Senators Brownback and Durbin and I, have traveled to this region and seen first-hand the tragedy of this relentless crisis. Increasingly, American citizens are also learning of the devastating situation in eastern Congo and are actively engaged to bring about policy changes. I am pleased to see Americans so engaged on this issue.

One of the underlying reasons this crisis persists is the exploitation and illicit trade in natural resources, specifically cassiterite, columbite-tantalite, wolframite and gold. The United Nations Group of Experts has reported for years how parties to the conflict in eastern Congo continue to benefit and finance themselves by controlling mines or taxing trading routes for these minerals. In response to these reports, the UN Security Council adopted Resolution 1857 (2008), encouraging Member States "to ensure that companies handling minerals from the DRC exercise due diligence on their suppliers." Over a year ago, Senator Brownback, Senator Durbin and I teamed up to author legislation that would do just that: the Congo Conflict Minerals Act, S.891.

Mr. President, Senator Brownback's amendment is taken from that bill, but includes modifications based on discussions with representatives from industry, U.S. government agencies and the Banking Committee. The amendment applies to companies on the U.S. stock exchanges for which these minerals constitute a necessary part of a product they manufacture. It will require those companies to make public and disclose annually to the Securities and Exchange Commission if the minerals in their products originated or may have originated in Congo or a neighboring country. Furthermore, it will require those companies to provide information on measures they have taken to exercise due diligence on the source and chain of custody to ensure activities involving such minerals did not finance or benefit armed groups.

I recognize that this conflict minerals problem is a complex one, given the importance of this trade to the local economy in eastern Congo and given the extensive supply chains and processing stages between the source and end-use of these minerals. The Brownback amendment was narrowly crafted in consideration of those challenges, and it includes waivers and a sunset clause after five years. However, I believe strongly that the status quo in eastern Congo is unacceptable to the people there and it should be to us as well. We have put financial resources toward mitigating this crisis, but we need to get serious about addressing the underlying causes of conflict. The Brownback amendment is a significant, practical step toward doing that, and I thank my colleagues for their support of it. I thank Senator Brownback for his longstanding leadership on these important humanitarian issues.

Mr. President, the second amendment, led by Senator Cardin and Senator Lugar, is different than the Congo amendment, but would complement it. This amendment would require companies listed on U.S. stock exchanges to disclose in their SEC filings extractive payments made to foreign governments for oil, gas, and mining. This information would then be made public, empowering citizens in resource-rich countries in their efforts to combat corruption and hold their governments accountable. In far too many countries, natural resource wealth has fueled corruption and conflict rather than growth and development. This so-called "resource curse" is especially problematic in Africa, and in 2008, I chaired a Subcommittee hearing on this very topic. I said then that we must look for ways that the United States can use our leverage to push for greater corporate transparency in Africa's extractive industries.

In addition to helping countries combat the "resources curse," it is also in our national interest to improve transparency in the extractive industries. The amendment was drawn from an important piece of legislation, the Energy Security through Transparency Act, S.1700. The bill was given this title because enhancing transparency in the extractive industries can have real benefits for U.S. energy security. This will ultimately create a more open investment environment and increase the reliability of commodity supplies. Energy security is a topic that Senator Lugar and his staff have worked on for years, and we all know how central it is to our national security. I thank Senator Lugar and Senator Cardin for their work on this important amendment, and I urge my colleagues to support it.

URL Address: http://allafrica.com/stories/201008031126.html

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