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Conflict Minerals: The Plot Thickens with the Help of Capitol Hill (Part 1)

Mining in DRC

There has been a whole lot of chatter in recent days about a little provision tucked into the newly adopted Financial Reform Bill. That provision is the Conflict Minerals mandate, which basically states that companies using “columbite-tantalite (coltan), cassiterite, gold, wolframite or their derivatives” (and others at the discretion of the Secretary of State), sourced in the Democratic Republic of the Congo or in an adjoining country (apparently one of the ten in the larger Great Lakes region), must report the origins to the SEC.  On the surface, this appears to be a step in the right direction, however, one wonders, who is this bill really affecting?

It is important to understand that the dynamics in the Great Lakes region (eastern DRC in particular) are incredibly complex and as such, the range of reactions to the bill by many experts on the subject is equally complex. The following paragraph is an overly simplified recent history of the region (although the roots of the conflict began far earlier).

A war raged following the fall of the Mbutu regime (and consequent power vacuum) in the DRC in 1997 that lasted until a peace agreement was signed in 2003. It is widely believed that upwards of 5 million people were killed (although the number of deaths directly attributed to fighting is probably much less) over this time period. During this period, many Hutus involved in the genocide in Rwanda fled to the lawless areas of the eastern DRC in order to avoid capture and prosecution. At the same time, at least 1 million people were believed to have been displaced. As is often the case in areas outside formal government control, various groups have battled for power, and still do, including but not nearly limited to the FDLR (mainly Rwandan Hutus), the CNDP (once led by Laurent Nkunda and now fractured) and the FADRC (DRC national army). All have committed serious human rights violations and all appear to receive revenue (some more than others) from the sale of minerals.

However, most experts believe that while these groups receive some income from minerals, the causes of the conflict are not rooted in mineral rights, rather land rights in general, refugee issues and the right of return (particularly in the case of Rwandans) and a general lack of resources available to the burgeoning population (again an egregious oversimplification). Therefore some of the questions regarding the passage of this law are as follows:

• A great number of people (not just rebel groups) rely on income from minerals to survive and there is some concern that should mining dry up in these regions due to boycotts, the situation could actually become worse. This is somewhat akin to the “sweat shop argument” that as bad as the situation maybe, jobs are being provided.
• Rebel groups will find alternate forms of revenue (they have other revenue streams) and it is likely that they will continue to terrorize the general population. Economic survival is key, but ideological concerns almost always triumph.
• There is little to no government control of the region in question, which is one reason why these groups continue to operate and it is incredibly unlikely that any enforcement of this bill will take place (although it was supported by Kinshasa).
• Should this bill prove at all enforceable, it could force legitimate supply chain actors “underground” and cause formal operators to become part of the informal sector

Advocacy groups, particularly Enough which has more or less spearheaded this movement would vehemently disagree, but there is a certain sentiment, whether explicit or not, particularly in the development community that this is partially a case of Western consumers feeling good about themselves while the origins of the issue are not being properly addressed.

My final note for now is that the US government is not really in the business of passing bills that are not in the national interest and as mentioned briefly in my previous Steve Jobs article, does passing legislature make it easier for companies to understand their sourcing of natural resources?  Jobs wasn’t trying to skirt the issue-it is a legitimately difficult task.  I will attempt to explore both issues in the second half of this discussion.

Image Credit by PactWorld via Flickr under a CC license

Written by Jonathan Banco

Jonathan has worked in both journalism and various facets of small business development over the past eight years. Most recently, he graduated from the Monterey Institute of International Studies (graduate school of Middlebury College) in 2010 with an MBA and an MA in International Development Policy. His interests include SME development and its role in economic growth, particularly in Sub-Saharan Africa as well as how CSR/Sustainability measures impact both business operations and the communities in which businesses operate. While at MIIS he worked as a summer fellow involved in small business consulting in Accra, Ghana and was an active member of the MIIS Net Impact chapter. As a life long traveler, Jonathan has been fortunate to have lived in, worked in or visited over 20 countries on 5 continents and he truly hopes that he will be able to continue this trend.

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