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Conflict Mineral Regulation in the Democratic Republic of Congo

The Center for Global Studies is hosting the following event:

Disclosure Based Certification of Conflict-Free Minerals:

Update from the Democratic Republic of Congo

a talk by

Dr. Richard B. Robinson

Extractive Industries Technical Advisor

USAID, Kinshasa, DRC

Friday, January 30, 12:00 pm

GSLIS 131

Tantalum, Tin, Tungsten, and Gold. Rob Lavinsky, iRocks.com – CC-BY-SA-3.0

What are conflict minerals?

Conflict minerals include tin, tantalum, tungsten, (known as 3T) and gold which are mined under conditions of armed conflict. The mining of these materials at mines controlled by militant groups is usually associated with human rights violations because those doing the mining are either forced to work at gunpoint or are persuaded to work to protect families and loved ones. The mining of these minerals plays a major role in funding militant groups engaged in armed conflict.  In fact, the accessibility of conflict minerals to militant groups has been statistically linked to longer and more deadly conflicts¹.   Currently the country most affected by the mining and sale of conflict minerals is the Democratic Republic of Congo (DRC), where there have been an estimated 5.4 million deaths in civil conflicts to date.  Prior to 2010, it was estimated that conflict minerals provided $185 million per year to armed groups.

The Legislation

As part of the 2010 Dodd-Frank Act (Section 1502), the United States Securities and Exchange Commission now requires companies using any of the four minerals designated as conflict minerals to perform a “country of origin” inquiry on the materials. They must then report to the SEC their determination that the materials are either “DRC Conflict Free,” “Not Been Found to Be DRC Conflict Free,” or “DRC Conflict Undeterminable.” The law does not ban the purchase or user of products from DRC, but requires companies to report and publicly state their use of such products.

The Effects

The 2010 legislation has significantly impacted the mining economy of the DRC. A June 2014 report by the Enough Project, based on five months of field research in DRC, produced several findings, including the following. 1) Two thirds of the DRC’s mineral mines are free of the presence of armed groups. This is even more meaningful when compared to a 2010 (pre-Dodd-Frank) study by the UN Group of Experts, which found that in the Kivu province of the DRC, military groups controlled almost every single mineral mine. 2) Because the majority of companies buying minerals will only purchase “certified conflict-free” minerals, the price of non-certified minerals has shrunk by 30 to 60 percent. 3) Many electronics companies are investing in conflict-free mines, which has created up to 15 new certified conflict-free mines since 2011.

However, there are critics of the law who believe that, while something needed to be done to keep conflict minerals out of the hands of militant groups, the 2010 legislation was flawed. Reporting for the Washington Post in December of 2014, Sudarsan Raghavan discussed how the law has negatively affected many miners who relied upon mineral mines for their livelihood. Others, such as business law scholar Henry Lowenstein (citation below), criticize the legislation for delegating the enforcement of the law to the SEC, which was overwhelmed with regulatory tasks after the 2008 financial crisis and which had no prior experience in regulating natural resource imports and exports.

Come and Learn More!

Richard Robinson’s lecture on Friday will discuss the context of the Dodd-Frank conflict materials provision, as well as the effects of the legislation on international economic and development policy. Join us to learn more about this important issue.

Learn more on your own with the following resources:

Web Resources

Conflict Minerals 101 (Video) – Enough Project

Conflict Minerals – Global Witness

Sec.gov – Conflict Minerals Fact Sheet

Conflict Minerals Infographic – Sourceintelligence.com

Effects of Dodd-Frank Investigative Report – Enough Project

 

Books (Available through UIUC Libraries)

Bøås, Morten. (2015). The politics of conflict economies :miners, merchants and warriors in the African borderland. Milton Park, Abingdon, Oxon ; New York, NY : Routledge, Taylor & Francis Group.

Boulden, Jane. (Eds.) (2013). Responding to conflict in Africa: the United Nations and regional organizations. New York, NY : Palgrave Macmillan.

Gilpin, Raymond.Downie, Richard. (2009). Conflict-business dynamics in the Democratic Republic of Congo. Washington, D.C. : U.S. Institute of Peace.

(2013). The unintended consequences of Dodd-Frank’s conflict minerals provision: hearing before the Subcommittee on Monetary Policy and Trade of the Committee on Financial Services, U.S. House of Representatives, One Hundred Thirteenth Congress, first session, May 21, 2013. Washington : U.S. Government Printing Office.

 

Scholarly Articles (Available through UIUC Online Journals and Databases)

Carter, R. A. (2012). Conflict Mineral Regulations Cause Corporate Concerns. Engineering & Mining Journal (00958948), 213(9), 136-140.

Lowenstien, H. (2014). DODD-FRANK’S CONFLICT MINERALS RULE: THE TIN EAR OF GOVERNMENT-BUSINESS REGULATION. Southern Law Journal, 24(2), 189-219.

Nanda, V. P. (2014). CONFLICT MINERALS AND INTERNATIONAL BUSINESS: UNITED STATES AND INTERNATIONAL RESPONSES. ILSA Journal Of International & Comparative Law, 20(2), 285-304.

Veale, E. (2013). IS THERE BLOOD ON YOUR HANDS-FREE DEVICE?: EXAMINING LEGISLATIVE APPROACHES TO THE CONFLICT MINERALS PROBLEM IN THE DEMOCRATIC REPUBLIC OF CONGO. Cardozo Journal Of International & Comparative Law, 21(2), 503-544.

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