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9 May 2016

Peter Knobloch, Press and Public Relations, Christian Initiative Romero

Conflict minerals: Europe must finally take responsibility

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Smartphones, tablets and laptops – no matter how indispensable these digital all-rounders have become for our daily lives, we can neither know if the components that make up our devices are products of violent conflict, nor how many people may have been harmed in their production. Unlike the US, Europe lacks a law requiring the trade in conflict minerals to be transparent. Gold, tin, tantalum and tungsten are called conflict minerals, when armed groups use to fund themselves through illegal exploitation and trade of these metals. This trade fuels bloody conflicts and oppression in countries of the Global South, including the Democratic Republic of Congo, Colombia and Myanmar, leading to serious human rights violations. For the electronics industry, these metals are still irreplaceable. They enter the European markets mostly processed in smartphones, laptops or cars.

The European Union is aware of these problems thanks to the consistent educational work done by civil society. To stop unwanted conflict financing, the EU is working on a regulation that sets out how companies shall fulfil their human rights due diligence in the future. A touchstone for this regulation is the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. According to this guidance, companies shall identify and assess risks of funding conflicts along their supply chain, then design and implement a strategy to respond to the identified risks and report publicly about their activities. However, the EU still lacks an agreement on whether due diligence for companies should be on a voluntary or mandatory basis. Moreover, it is still not clear which industries shall be bound by such a law.

EU Parliament backs civil society
In March 2014, the European Commission presented a first draft of this regulation  in the form of a  voluntary certification that applied only to a few companies. The terms of this draft would not have prevented European companies from financing armed conflicts through their resource imports. On May 20th 2015, the European Parliament rejected this proposal and called for a binding regulation along the whole supply chain. Through this vote, the Parliament clearly supported the position of civil society.

Since then industry lobbyists have been trying to water down the stronger draft regulation. The Federation of German Industries (BDI), for example, successfully placed their position into the news via the public broadcasting service. To argue against a binding regulation, the Federation emphasized difficulties in the implementation of the US law on conflict minerals that is established in section 1502 of the Dodd-Frank Act. The positive effects of this law, are demonstrated by the American organization Enough Project’s recent work.  

The positions of the EU Member States diverge strongly on the issue of regulating conflict minerals, resembling a patchwork quilt far more than a cohesive whole. Some support the demands of civil society, though in a much weaker way, in particular with regard to the entrepreneurial scope of obligation. But a few Member States go so far as supporting a totally voluntary initiative. Member States rarely argue from a human rights-based point of view, and instead focus mostly on the perspective of corporate interests.

At the moment all stakeholders are struggling towards an agreement between the three bodies with the power to set such regulations. On 5 April 2016, representatives of the European Parliament, the European Commission and the Dutch Presidency, which represents the interests of the Member States, convened in Brussels.

Big hopes were pinned on this second trialogue meeting after a first round of negotiations in February 2016 had failed. However, even after intensive bilateral talks with 18 Member States, the Dutch Presidency failed to get a new negotiating mandate to bring to the bargaining table.

As representatives of European civil society, the Christian Initiative Romero along with PowerShift  came to the second trialogue meeting in Brussels. The day before the negotiation, these two members of the international coalition Stop Mad Mining met EU Trade Commissioner Cecilia Malmström and the chief negotiator of the Dutch Presidency, Roland Roosdorp. To them they handed over the petition "Stop the deadly trade in conflict minerals," comprising almost 42,000 supporting signatures.  

OECD Guidelines remain the reference standard
Malmström and Roosdorp recognized the importance of the topic. They agreed independently of one another on a partly mandatory regulation, at least for the so-called upstream section of the supply chain that reaches from the mine to the smelter. However the question of what happens in the rest of the supply chain remained. The downstream part of the supply chain, from the smelter to the final product, involves a much bigger part of the industry, and profits from conflict minerals to a greater extent than the upstream section.

If the downstream section is excluded from a European conflict mineral regulation, it is very likely that this section of the supply chain will be left out in future legislation as well. Prior to the tripartite discussions, there have been voices that a weak EU regulation could even undermine the OECD standards. In her conversation with us, Malmström emphasized that the OECD Guidelines remain the reference standard.

Roosdorp from the Dutch Presidency stressed that many states foresee difficulties in the implementation of the regulation. Will the EU create a public authority to monitor implementation, or should Member States engage new staff for this task? These practical issues are still unexplained. Similarly, the question of the timetable looms large. Should the big corporate players start the implementation process first, with smaller companies getting involved only after an evaluation period?

New mandate for the Council
The Dutch government hopes to complete the trialogue negotiations successfully during the period of its presidency. Countries such as Sweden, Portugal, Greece, Italy or Germany represent a more progressive and straightforward position. They should now strengthen the Council's spine so that an agreement can be achieved soon.

European civil society will continue to monitor and engage with this process closely. A mandatory conflict mineral regulation could cut off the money supply for some of the bloodiest conflicts in the world, or at least make their funding much more difficult.

Apple: A pioneer with deficits shows the way

In a globalized world the corporations’ responsibilities do not end at their factory gates. The UN Human Rights Council defined this responsibility in 2011 in their Guidelines on Business and Human Rights.

Thanks to a binding US laws, companies like Apple proved via audits that their supply chain in gold, tin, tantalum and tungsten was 100 percent conflict-free in 2015. Before the Dodd-Frank Act things looked different. It is time that European companies follow suit quickly.

Amnesty International recently uncovered child labour in Apple's supply chain for cobalt. This proves again that voluntary standards are ignored. Cobalt as a resource is necessary for the production of many IT devices, as well. But unlike gold, tin, tantalum and tungsten, due to section 1502 of Dodd-Frank Act it is not considered a conflict mineral. Even in the most progressive version of a coming European regulation on conflict minerals, cobalt is left out. This shows in which direction the next steps have to be taken - mandatory due diligence for other raw materials where human rights are violated in mining and trade.

Not only warlords and organized crime, but companies, and even states, have been known to commit serious human rights abuses in the immediate vicinity of mines. One example is when citizens of a whole town are illegally expelled from their land, when livelihoods are destroyed, or when activists are persecuted.

Anyone who wants to support the current trialogue process for a binding and comprehensive regulation on conflict minerals has the opportunity to participate in the petition of the church network CIDSE.

Peter Knobloch is secretary for Press and Public Relations at the Christian Initiative Romero which is part of the international coalition Stop Mad Mining