Press release / April 5, 2017

Action to de-rail US conflict minerals rule “gift to predatory armed groups”, warns Global Witness

Washington, DC — Global Witness is very concerned about possible action by the Trump Administration and Congress to weaken or repeal the conflict minerals provision (Section 1502) of the Dodd-Frank Act. This important law helps stop US companies funding conflict and human rights abuses in the Democratic Republic of Congo.

The Senate Hearing takes place as the State Department is carrying out a consultation on conflict minerals sourcing, and follows the SEC’s own invitation for comments to inform its “reconsideration of conflict minerals rule implementation.”

Carly Oboth, Global Witness, said:

“If the US Government spent half as much time on enforcing the Rule and principles of responsible sourcing as they have dragging their feet and plotting rollbacks, our collective efforts would be focused on delivering on the promise of more transparent and responsible mineral sourcing.

“Any action to derail the US conflict minerals rule would be a gift to predatory armed groups seeking to profit from Congo’s minerals as well as to companies wanting to do business with the criminal and the corrupt.

“This is a brazen assault on regulations that seek to rein in the worst excesses of big business, and closely follows a successful Republican effort to scrap the Cardin Lugar anti-corruption rule for oil, gas and mining companies. After years of progress, President Trump is inviting US companies to draw the curtains on their business practices in the very countries that need transparency the most.”

When the Trump administration set its sights on the conflict minerals provision of the Dodd-Frank Act, a broad constituency of companies, investors, and civil society groups pushed back. Tech companies—including Apple and Intel—and jewelry companies—including Tiffany’s and Richline—support the rule.

Investors representing over $4.8 trillion dollars in assets under management told the SEC that the due diligence disclosures required by Section 1502 provide valuable information about how companies manage supply chain risks. Over 100 civil society organizations in Congo and Rwanda submitted comments to the SEC, alongside contributions from the Congolese government, the ICGLR (a body that represents 12 regional governments), and the Rwanda Mining Association. 

On March 29, 2017, Senators Warren, Menendez, Brown and Schatz sent a strongly worded letter to the SEC Inspector General, stating “we are concerned that Commissioner Piwowar’s actions may lack adequate justification, undermine the SEC’s mission, exceed his authority as Acting Chairman, violate other procedural requirements, and could potentially prove to be a waste of the SEC staff’s precious time and resources.”

Global Witness has acknowledged challenges in the implementation of the Rule, which has not been implemented effectively to date. “There are very real challenges that need to be addressed, but these challenges demand that we do better and build on what has been achieved to date, not squander it by returning to the indifference that served criminals and armed groups for decades,” said Carly Oboth.

/ ENDS

Contacts

Notes to editor:

Section 1502 of the Dodd-Frank Act requires US-listed companies to determine whether they use minerals sourced from the DRC or its neighboring countries and, if so, to conduct basic supply chain checks—known as ‘due diligence’—on their supply chains to ensure they are financing conflict or human rights abuses. Companies must annually disclose their due diligence efforts in public reports to the SEC.

Links between minerals, conflict and human rights abuses are not unique to central Africa. The US should be doing more to ensure US companies are not funding or driving conflicts. In Afghanistan, a Global Witness investigation revealed that the Taliban and other armed groups earned upwards of $20 million dollars from the trade in the semi-precious stone lapis lazuli. In Myanmar, tin has reportedly benefitted a US-sanctioned rebel group called the United Wa State Army. In Colombia and Peru, the value of illicit gold exports has reportedly surpassed that of cocaine, providing millions to FARC armed group. 

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