In a surprising turn of events, last week, the European Union voted 402 to 118 to pass a law requiring companies to certify to the government that the minerals they source do not fuel violent conflict and human rights abuses, a piece of legislation that parallels –and improves on — the US Dodd-Frank Act of 2010.
The EU Parliament defied expectations that they would pass a watered-down version of the proposed legislation, which would have put the vast majority of European companies under a voluntary reporting system. Instead, the EU regulations call for mandatory reporting, and third-party independent certification of smelters and refiners.
This important victory occurred after hundreds of thousands of people from all over the world including Earthworks members sent letters to EU Parliament members urging them to support stronger, mandatory regulations.
For the past 20 years, the Democratic Republic of Congo has been ravaged by a conflict between armed groups and the state, which has led to mass murder and rape. The fractious violence has been partly financed by the extraction and sale of minerals, including tin, tantalum, tungsten, and gold.
The EU legislation builds on the similar Dodd-Frank Act, passed in the US in 2010.
Once the EU law is fully implemented, companies operating in two major world markets will be required to publicly report whether they purchased conflict minerals, the profits of which fund armed groups in the DRC and adjoining countries. Based on the OECD due diligence guidelines for conflict sourcing, both rules also require companies to come up with a plan to remove conflict minerals from their supply chains.
The EU parliament will now enter negotiations with EU member states to negotiate agreements for implementation of the law.
In the US, the law is in effect, despite industry efforts to legally block it. Hundreds of companies filed disclosure reports with the Securities and Exchange Commission (SEC) last year on conflict mineral sourcing. The results have unfortunately been weak: Nearly 80 percent of companies failed to “adequately check and disclose whether their products contain conflict minerals from Central Africa,” according to an analysis released in April by Global Witness and Amnesty International.
What does all this mean on the ground in the DRC? There is no consensus on whether the conflict minerals disclosure law has been a success. However, the United Nations Group of Experts on the Congo, which has studied hundreds of mines in the area, have found that the law has reduced the proportion of mined metals fueling conflict — and in turn, increased the number of “legitimate” mines. Given the size of EU’s market for jewelry and electronic goods, the EU vote could go a long way towards further drying up finance for conflict in the DR Congo. It’s now up to EU member states to ensure the legislation goes into effect.