Europe’s nearly half a billion consumers are driving a rising global demand for minerals such as tungsten, tantalum, and gold.
These minerals, used in many consumer products such as phones and cars, are fought over by violent armed groups in resource-rich parts of Africa and Latin America, exacting a huge cost on development and human rights. Yet there is currently no law in place to make European companies source responsibly, or prevent them from contributing to this deadly trade.
Earlier this year, the European Commission published a legislative proposal designed to address the issue of responsible mineral sourcing.
Innocent civilians in countries such as Congo, the Central African Republic, Zimbabwe, and Colombia have suffered horrifically at the hands of armed groups and abusive military and security forces financed by trade in natural resources. This was a critical opportunity for European policy makers to show strong leadership and prevent Europe from acting as a trading hub for conflict minerals.
Unfortunately, the proposal was deeply flawed.
The commission argued for a voluntary, opt-in scheme which would fail to keep conflict minerals out of Europe. Under the current proposal, consumers will have no guarantee that the products that they are buying have not funded armed groups, nor contributed to a deadly cycle of violence and exploitation.
For this reason, Global Witness and our coalition partners are urging Europe’s new parliamentarians to amend this proposal and ensure a robust piece of legislation – creating a level playing field for all of Europe’s businesses – gets passed.
We would encourage our new MEPs to focus their reform efforts on three areas.
Firstly, they should insist that the opt-in scheme is amended to include a mandatory requirement for companies to do their due diligence. This is critical as voluntary schemes typically don’t affect companies’ sourcing behaviour.
Secondly, for the scheme to have any notable impact on the ground, the scope of companies it covers must be broadened from the limited number of primary importers of tin, tungsten, tantalum and gold (and their ores), to require companies that import finished products containing these metals into the EU to explain the steps they have taken to source minerals responsibly.
Finally, the proposal’s material scope must be widened to include other natural resources at risk of military predation.
The commission, for example, ignores the role that the trade in precious stones and other natural resources plays in financing insurgency networks and abusive military and security forces, such as the role of the jade trade in financing Myanmar’s military old guard, and the exploitation of mines by insurgency networks in Afghanistan.
Voluntary guidelines are simply not good enough.
Non-binding guidelines have already been agreed at the OECD, the Paris-based club of wealthy nations, and endorsed by the EU, so the EU’s proposal adds little that is new. Meanwhile, the majority of European companies that purchase natural resources are not following these guidelines, which shows their limitations.
We need a law that compels European companies to address the risk of conflict financing in their supply chains and to report publicly on their due diligence.
With legislation already on the books in the US and Congo, and moves afoot to put in place guidelines for Chinese companies, this issue isn’t going to go away.
Triggered by a landmark reform in the US (Section 1502 of the Dodd-Frank Act, which requires companies to check their supply chains for conflict minerals) progressive companies at all levels of the supply chain have started to work together to clean up the minerals trade.
The world’s largest processor company, Intel, announced in January that their microprocessors are conflict-free, and big brand name companies like Apple have recently released a list of smelters in their supply chain.
In Africa’s Great Lakes region, companies have begun to engage in closed-pipe supply chain projects, where minerals in risky areas are guided through supply chains from mine to end-product to avoid military predation.
Due diligence need not be costly or difficult to do, and the extra information it gives to companies about their supply chains, as well as the enhanced consumer loyalty, will be good for business in the end.
I am always surprised by reputable businesses who claim that they don’t know where their materials come from: After all, we can track food from farm to our tables.
Our elected MEPs should start their new jobs by demanding that new commissioners explain why a voluntary scheme for a limited number of companies was proposed in lieu of mandatory requirements and how it adds any value to existing efforts.
Robust EU legislation could make an enormous difference to many countries’ development prospects, and to the lives and livelihoods of their citizens. It would also boost Europe’s reputation for enlightened policy-making and ensure a level playing field for our companies with those across the pond.
We know Europe’s new parliamentarians will have a lot on their desks. But ignoring this issue would leave the EU and its consumers with the real risk of having blood on their hands.
Gavin Hayman is chief executive of Global Witness. You can follow him on twitter: @GavinHayman_GW
This piece was first published on the EU Observer on 4th June 2014.