Piece of Mine: A Conflict Minerals FAQ

By Nitza Vizcarra, October 21, 2013

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What are conflict minerals?

Conflict minerals are natural resources whose illegal exploitation and trade in a context of war make millions in revenue for armed groups who in turn use these funds to purchase weapons that fuel violence and perpetuate human rights abuses. The UN General Assembly first officially discussed the concept in relation to “blood diamonds,” the first conflict mineral to gain notoriety [ii]. Between 1992 and 1998, the main rebel group in diamond-rich Angola, UNITA, is said to have profited up to $4 billion USD from diamonds [iii].

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What are the most common conflict minerals and why are they so valuable?

The most common conflict minerals are used in fine jewelry such as diamonds and gold; and more notoriously in electronic devices such as the “3 Ts”—tin, tantalum, and tungsten. The rising global demand for these minerals and the harsh labor conditions under which they are mined make conflict minerals extremely lucrative. The value of precious minerals such as diamonds is fairly obvious: they are precious. On the other hand, other minerals such as the 3 Ts have more of a functional rather than esthetic value:

Tantalum, an extremely heat-resistant and efficient conductor of electricity, is used to make capacitors that store electricity in and power virtually every electronic device such as laptops, cell phones, iPods [iv].

Have you ever wondered how your phone vibrates? Tungsten’s high-density properties make it an ideal weight or counterbalance for mobile phone vibration systems [v].

Tin’s corrosion-resistance and low melting point make it an ideal solder (an alloy used for joining less fusible metals) on electronic circuit boards [vi].

Gold is not only used in jewelry but it is also an essential component in electronic devices. In fact, it is their highest valued metal. This is because gold provides a corrosion-resistant, electrically conductive coating for wires and printed circuit boards [vii].

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Are conflict minerals the only conflict resource?

No. The United Nations Environment Programme (UNEP) estimates that in the last 60 years, at least 40% of all intrastate conflicts have been resource-related [viii]. The exploitation of ‘high-value’ resources such as timber and oil or scarce ones such as fertile land and water have sustained at least 18 violent conflicts over the last two decades [ix]. A variety of natural resources aside from conflict minerals have provided the logistics for war in Cambodia, Liberia and Sierra Leone [x]. Furthermore, virtually any resource can become a conflict resource, as what classifies it as such is the context in which it is extracted or produced. This is especially true for resource-dependent countries that are more vulnerable to the militarization of resources because of increased unemployment, inequalities and inadequate social services [xi]. These dire socioeconomic conditions break down state-society relations and in turn fuel violent conflict that disrupts other sectors and results in a detrimental cycle of resource dependence, poverty and violence. Examples include the Sudanese and Nigerian oil sectors and the Peruvian mining sector, all in which these resources account for more than half of their exports [xii].

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How are conflict minerals a global issue?

Conflict minerals are a global issue in two respects. First, we are all complicit in the violence that results from the illicit exploitation and trade of such minerals. This is because they conflict minerals make their way into the international trade system. That is, the ability of armed groups to exploit natural resources depends on their access to external markets. Without the ability to profit from resource extraction, they could no longer exacerbate or sustain conflict. Therefore, it is through supply chains that conflict minerals end up on our store shelves and connect us to the distant conflict [xiii].

Second, conflict minerals are a widespread issue: one in every five weak states is considered mineral-dependent (minerals represent at least 25% of their exports) [xiv]. Mineral-dependent fragile states include the Democratic Republic of the Congo (DRC), Guinea, Central African Republic, Georgia, Somalia, and Zimbabwe among several others [xv]. Furthermore, conflict minerals are a manifestation of the “resource curse,” a thesis that describes the connection between resource-rich countries and vulnerability to both conflict and poverty seen in various regions around the world, from Africa to Asia and South America [xvi]. In the DRC, in particular, conflict minerals have successfully sustained tremendous rates of poverty and violence, making the Congo the most extreme example of the resource curse.

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Why are minerals a source of conflict in the Congo?

During Congo’s two wars (1996-2002), independent armed groups took control of the mineral-rich eastern region of the DRC and continue to dominate this area, controlling over half of the 200 mines in eastern Congo [xvii]. While Congo presents a complex humanitarian crisis—fuelled by disintegration, land conflict, regional tensions, and weak governance [xviii] — over the last 12 years, the rich mineral wealth of the Kivus provinces has motivated numerous armed groups such as the Democratic Forces for the Liberation of Rwanda (FDLR) and more recently, the M23 rebels, to pillage, exploit and terrorize local communities in order to make a profit, sustain their existence and expand their control as part of an ongoing competition for power between Congolese leaders [xix]. It is precisely because conflict minerals are so lucrative that armed groups fight to control the mines. In total, armed groups earn approximately $115 million per year from trading in tin, $12 million per year from trading in tantalum, $7 million from tungsten, and $50 million per year from gold [xx]. Every dollar earned from the illegal trade is a dollar that foregoes the necessary investment in Congolese education, health care, and employment. As a result, in 2012, the DRC ranked the lowest on the UN Human Development Index [xxi].

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What human rights abuses occur in the DRC as a result of conflict minerals?

Conflict minerals affect every aspect of society: social services disappear, poverty rapidly increases and the detrimental impact on the environment is largely overlooked. Furthermore, the scourge of child labor between the ages of 10-16 and the conscription of child soldiers compromise the quality and access to education [xxii]. In times of conflict, basic gender inequalities are exploited and take the form of widespread sexual violence used to terrorize and humiliate communities. Altogether, this results in mass displacement and a staggering mortality rate. By 2007, the International Rescue Committee calculated a death toll of approximately 5.4 million people—making it the deadliest conflict since WWII [xxiii]. In addition, due to the lack of health and safety standards for miners, working conditions are abysmal and amount to conditions of slavery, earning as little as $1-5 per day [xxiv].

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How do conflict minerals from the Congo get into my local electronic stores?

In order to understand how conflict minerals make their way from conflict regions in the DRC into cell phones, laptops, and video game systems, one must be familiar with the supply chain of Congolese conflict minerals. A supply chain is the system of organizations, individuals, information technology and resources involved in transforming raw materials and components into finished products [xxv]. The conflict minerals supply chain begins in one of eastern Congo’s many ‘conflict mines.’ From the mines, the minerals are transported to key trading towns such as Bukavu and Goma, where export companies purchase then process these minerals to sell to foreign buyers [xxvi]. From the exporter the minerals are then taken along smuggling routes into the neighboring countries of Rwanda, Uganda and Burundi [xxvii]. From here, the minerals head to East Asia to smelting companies in Malaysia, India and China to be refined [xxviii]. In the smelting process they are mixed with foreign minerals, obscuring their violent origins. Finally, the refiners are able to sell Congo’s minerals in the world market to electronic companies who process them into the products we all know and love.

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How has this been able to go on for so long?

The DRC exerts little, if any, authority in the eastern provinces, where the conflict is most pronounced. Armed groups, militias and corrupt military units dominate this territory rendering the Congolese government incapable of stabilizing the zone. It also does not help to be bordered by countries that manipulate the crisis to their advantage rather than making positive contributions to the democratic and peace process initiated in 2006. Many adjoining countries are complicit in the crisis by serving as exporters of Congolese conflict minerals. For example, Uganda has no significant gold resources, officially producing $600 worth of gold in 2007 and yet has historically been a major gold exporter in the sub-region, exporting $74 million worth of gold in the same year [xxix]. Moreover, the Congolese state itself remains a predatory structure, as it has been during most of its history. President Kabila’s administration is often more preoccupied with using public offices as a means to personal enrichment as opposed to pursuing the public’s best interest [xxx]. For the most part, the majority of Congolese citizens survive in spite of the state’s own aggressive attacks on and manipulation of local communities, rather than with its help [xxxi].

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What is the international community doing about this issue?

The work of many advocacy organizations such as the Enough Project and Global Witness has successfully pressured the international community into addressing a largely forgotten and invisible crisis. Several governments and multilateral organizations have expressed their commitment to ensure that electronic companies and consumers are not financing atrocities in the DRC. A significant first step involved acknowledging the link between natural resources, conflict, and consumer appetites. For example, the U.N. Security Council made a statement recognizing, “the linkage between the illegal exploitation of natural resources, illicit trade in such resources and the proliferation and trafficking of arms as one of the major factors fuelling and exacerbating conflicts in the Great Lakes region of Africa.” [xxxii] In 2010, the G8 Communiqué also made conflict minerals a topic of discussion: “We welcome the recent initiatives of the private sector and the international community to work with the Congolese authorities and to enhance their due diligence to ensure that supply chains do not support trade in conflict materials.” [xxxiii]

However, arguably the most valuable contribution from the international community has come from the Organization for Economic Cooperation and Development. The OECD’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas is applauded by many as the successful outcome of multi-stakeholder processes and global public policy networks. The guidance provides management recommendations for importers, processors, and consumers in order to make conflict minerals work for development rather than for armed groups. By advising companies to respect human rights while conducting their activities; to contribute to economic, social, and environmental progress with the goal of achieving sustainable development, the OECD has provided a manual for companies to turn a vicious cycle into a virtuous one [xxxiv].

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What is due diligence?

The OECD defines due diligence as, “an ongoing proactive and reactive process through which companies can ensure that they respect human rights and do not contribute to conflict.” [xxxv] In other words, OECD advises all actors involved in the mineral supply chain to “make sure they receive what they believe to be paying for.” Furthermore, some legislation in OECD countries such as the U.S. have made due diligence a requirement, the most notable being Section 1502 of the Dodd-Frank Act.

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What is the Dodd-Frank Act Section 1105?

As a part of the U.S. Government’s Dodd-Frank Wall Street Reform Act passed in July 2010, Section 1502 requires all manufacturing companies listed in the US stock exchange to trace and audit their supply chains for the 3 Ts and gold sourced from the DRC and its adjoining countries such as Uganda and Rwanda to ensure the minerals do not come from mines or trade routes controlled by armed groups and therefore are not fueling conflict regions [xxxvi]. The centerpiece of this law is the disclosure requirement in which companies that require these minerals for their products must produce an annual Conflict Minerals Report providing evidence of using “conflict-free” supply chains. These companies must also respond regularly to the Securities and Exchange Commission (SEC) who works in collaboration with the Secretary of State, Comptroller General and United States Agency for International Development (USAID) to enforce due diligence [xxxvii].

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Is it possible for companies to trace their minerals back to mines in the Congo?

Yes. Previous experience with conflict timber in regions such as Liberia, has provided the industry with mechanisms for tracking down this conflict resource down to the pulping process—equivalent to the smelting process in the minerals industry [xxxviii]. It is the stage previously mentioned where Congolese minerals mix with foreign minerals making it difficult but not impossible to identify. However, the majority of U.S. companies are not prepared for such legislation, experts at IHS note, “The industry appears to be unprepared, given that about 90 percent of firms so far have not produced the data, declarations, or documentation that will help fulfill regulatory requirements detailing the presence of such minerals in their supply chains.” [xxxix] Therefore, tracking is not so much a matter of feasibility as it is of initiative.

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How effective is this policy in ensuring due diligence?

“Conflict-free” verification programs and legislation have sought to remove armed groups from supply chains yet complex supply-chain networks have allowed buyers to take advantage of the inherent loopholes in the system. Section 1502 is modeled after The Kimberly Process, a similar provision regulating “conflict diamonds.” This policy has been condemned for its system of voluntary self-regulation by the diamond industry, largely ineffective in enforcing higher standards evidenced by the blood diamonds that have found their way through loopholes into the “conflict-free” trade. For instance, in 2006, Global Witness reported, “A United Nations Group of Experts on Cote d’Ivoire has recently found that poor controls are allowing significant volumes of blood diamonds to enter the legitimate trade through Ghana, where they are being certified as conflict free.” [xl] Although, the Dodd-Frank Act is said to have learned from the experience of the Kimberly Process, it still provides an “out” for companies struggling with verification issues. The annual Conflict Minerals Report requires only a “reasonable” country of origin inquiry [xli]. Therefore, if a company cannot determine the origin of its minerals, it is only obliged to disclose that fact. This is one of the predominant limitations of the “name and shame” instrumentality.

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Does this policy present any problems for Congolese miners?

When the legislation was first drafted, many experts were concerned that the regulations would have the effect of a boycott against Congolese mineral exports, given the difficulty of implementing the required due diligence processes in the unstable environment of eastern Congo. This would almost certainly, further impoverish artisanal miners, their families, and the small businesses that depend on them.

As it turns out, many artisanal miners did experience this scenario but it was not due to a de facto ban on Congolese minerals imposed by due diligence requirements but rather international condemnation. In 2011, under international pressure, President Kabila imposed a temporary ban on mining operations in the provinces of Kivu and Maniema and “Since military leaders remained the principal power brokers in rural areas, and since corruption persisted, the application of the technical measures deprived vulnerable populations of their sole means of livelihood while allowing armed groups to continue and even expand their mining operations.” [xlii] Political scientist Séverine Autesserre argues these are the consequences of “straightforward solutions” that prioritize the regulation of conflict minerals at the expense of all the other necessary measures. Such policies reduce the cause of violence to conflict minerals and have in turn unintentionally contributed to the degradation of the situation in eastern Congo [xliii].

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Can any measure be effective given the instability of the DRC?

As mentioned above, the problem with the current policy addressing conflict minerals is that it only treats one aspect of a broader, multilayered issue. There are many structural and deep-seated causes as to why some resource dependent countries are more susceptible to militarization of natural resource exploitation. In the case of the DRC, there are many reasons for the deterioration of the situation including poverty, grassroots antagonisms over land and power and the persistence of corruption at all levels of the political and economic system. This is why the regulation of minerals will not provide the stability needed for a development-friendly environment on its own. Efforts such as Section 1502 must work in unison with other necessary measures to form a comprehensive solution as opposed to a series of technical responses.

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What changes or adjustments should be made to Section 1502?

A certification regime should compliment the trace-audit provisions of the Dodd-Frank legislation in order to provide consistency and guarantee standards on a global level when companies or governments are unable do so on their own. As the law currently stands, companies who do not comply with due diligence processes are only subject to reputational punishment. Financial and legal sanctions can serve as more effective deterrents to non-compliance than a threat to a company’s reputation.

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What is a ‘certification regime’?

A regime is a form of international cooperation and refers to “sets of principles, norms, rules, and decision-making procedures around which actors’ expectations converge.” [xliv] A certification regime involves governments, the private sector, and consumers taking joint action to trace, audit, and certify their resource supply chains. Companies must be required to identify the sources of their minerals and civil society groups should uphold efforts to develop transparency in the origin and production of minerals. Secondly, legitimate third parties should conduct audits that require companies to possess detailed examinations of their mineral supply chains as evidence that their minerals are not being produced in conflict mines, and that they are not financing armed groups in Congo. Lastly, in order for consumers to have access to conflict-free electronics from the DRC, donor governments and the industries indirectly involved should provide the technical and financial resources necessary to provide an effective certification scheme that builds on previous efforts such as the Kimberly Process.

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What are the other necessary measures to be taken in addition to Section 1502?

These measures include resolving land conflict, promoting inter-community peace and reconciliation, jump-starting grassroots development, and ensuring that state officials respect human rights and are dedicated to fighting corruption.

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How can this be done?

Together. The multifaceted crisis in the DRC requires a globally coordinated approach between the Congolese government, the eastern region of the DRC and the international community (including consumers). The Dodd-Frank Act has become a landmark for regulative compliance and as such governments and international communities should seize this “global opening” to pursue a binding global due diligence regime to not only combat the issue of conflict minerals in the DRC but to also combat conflict natural resources elsewhere. So far, the activities of MNCs who do not face domestic constraints regarding due diligence processes continue to go unchecked and contribute to the perpetuation of human rights abuses and conflict around the world.

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Who needs to do what?

Advocacy organizations should emphasize the other causes and consequences of violence in eastern Congo. In the short run, this will raise awareness about significant issues that do not form part of the dominant frame of conflict minerals. By doing so, non-Congolese actors will have more knowledge on the different dimensions of the crisis and in the long run this will bolster a process of change as more people will be aware of what it takes to end this conflict.

Interveners, whether they are governments, the UN, or NGOs, should consider providing a decent salary to state authorities and security forces, as low incomes tend to offer an incentive to engage in corruption and harassment. They should also invest resources in strengthening the justice system and promoting respect for human rights notably by using performance-based financing as an effective way to train authorities in formal practices and due processes.

The UN Peacebuilding Commission and International Labor Organization (ILO) both have valuable tools in fostering sustainable development. The Commission should provide problem-solving tools to Congolese activists and community leaders so that they can tailor these to their values and needs, promoting “African solutions for African problems.” The ILO, possibly accompanied by the Commission should be invited periodically to conduct on the spot enquiries. The International Trade Union Confederation (ITUC) should provide logistical support for miners attempting to organize unions once the mineral sector is legitimized and functional.

Multinational enterprises that use these minerals and major donors should invest in the Congolese economy through small business, microfinance and agriculture. In the same spirit, rather than creating even more NGOs in the northern hemisphere, current NGOs should act as a fundraising branch to Congolese social programs and institutions in order to support and empower rather than dictate social movements.

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NOTES

i. Global Witness, “Conflict.” Accessed March 13, 2013. http://www.globalwitness.org/campaigns/conflict.

ii. Gberie Lansana, “African Civil Society, ‘Blood Diamonds,’ and The Kimberly Process,” Movers and Shakers: Social Movements in Africa , ed. Stephen Ellis and Ineke Van Kessel (Leiden: Koninklijke Brill NV, 2009), 66.

iii. ibid.

iv. Commerce Resources Corp., “About Tantalum .” Last modified 2013. Accessed March 21, 2013. http://www.commerceresources.com/s/AboutTantalum.asp.

v. Ormonde Mining, “About Tungsten.” Last modified 2013. Accessed March 21, 2013. http://ormondemining.com/en/investors/about_tungsten/tungsten_metal_uses

vi. Royal Society of Chemistry, “Tin – Element information, properties and uses.” Accessed March 21, 2013. http://www.rsc.org/periodic-table/element/50/tin.

vii. CanadaGold, “Gold in Electronics.” Accessed March 21, 2013. http://canadagold.ca/2012/08/gold-in-electronics/.

viii. United Nations Environment Programme. From Conflict to Peacebuilding. Nairobi: UNEP, 2009.

ix. ibid.

x. Global Witness, “Conflict.” Accessed March 13, 2013. http://www.globalwitness.org/campaigns/conflict.

xi. UN Interagency Framework Team for Preventive Action. Prevention in Resource-Dependent Economies. New York: United Nations Development Programme, 2011.

xii. ibid.

xiii. John Prendergast and Sasha Lezhnev. From Mine to Mobile Phone. Washington: Enough Project, 2012.

xiv. Organization for Economic Cooperation and Development. Towards Conflict-Free Minerals: What Can Donors Do? OECD Publishing, 2012.

xv. ibid.

xvi. Rixon, Carleigh, and Thomas Lazzeri. Africa Europe Faith and Justice Network, “Resource Curse.” Accessed March 21, 2013. http://www.aefjn.org/index.php/370/articles/the-resource-curse.html.

xvii Spittaels, Steven, and Maniema Hilgert. International Peace Information Service, “Interactive Map of Militarised Mining Areas in the Kivus.” Accessed March 21, 2013.

xviii. Severine Autesserre, “Dangerous Tales: Dominant Narratives on the Congo and their Unintended Consequences,” African Affairs, 111, no. 443 (2012): 9, 10.1093/afraf/adr080 (accessed March 17, 2013).

xix. Office of the High Commissioner for Human Rights. Report of the Mapping Exercise documenting the most serious violations of human rights and international humanitarian law committed within the territory of the Democratic Republic of the Congo between March 1993 and June 2003. OCHR, 2010.

xx. RAISE Hope for Congo, “Conflict Minerals.” Accessed March 21, 2013. http://www.raisehopeforcongo.org/content/conflict-minerals.

xxi. United Nations Development Programme, “Indices and Data – HDI 2012 Rankings.” Accessed March 21, 2013. http://hdr.undp.org/en/statistics/.

xxii. World Bank. Congo, Democratic Republic of – Growth with Governance in the Mineral Sector Project. Washington: WorldBank, 2008.

xxiii. International Rescue Committee. Mortality in the Democratic Republic of Congo. IRC, 2007.

xxiv. World Bank. Congo, Democratic Republic of – Growth with Governance in the Mineral Sector Project. Washington: WorldBank, 2008.

xxv. McMichael, Philip. Development and Social Change: A Global Perspective. California: Sage Publications, Inc., 2012.

xxvi. John Prendergast and Sasha Lezhnev. From Mine to Mobile Phone. Washington: Enough Project, 2012.

xxvii. Conflict Minerals 101. Web. 20 Feb 2013. < http://www.youtube.com/watch?v=aF-sJgcoY20>.

xxviii. ibid.

xxix. John Prendergast and Sasha Lezhnev. From Mine to Mobile Phone. Washington: Enough Project, 2012.

xxx. Severine Autesserre, “Dangerous Tales: Dominant Narratives on the Congo and their Unintended Consequences,” African Affairs, 111, no. 443 (2012): 9, 10.1093/afraf/adr080 (accessed March 17, 2013).

xxxi. ibid.

xxxii. United Nations Security Council. “UN Security Council Resolution 1857.” 22 December 2008.

xxxiii. Government of Canada. “G8 Muskoka Declaration Recovery and New Beginnings.” Muskoka, Canada, 25-26 June 2010.

xxxiv. Organization for Economic Co-operation and Development. OECD Due Diligence Guideline for Responsible Chains of Minerals from Conflict-Affected and High-Risk Areas. OECD Publishing, 2011.

xxxv. ibid.

xxxvi. Global Witness, “The Dodd Frank Act’s Section 1502 on conflict minerals.” Accessed March 21, 2013. http://www.globalwitness.org/library/dodd-frank-acts-section-1502-conflict-minerals.

xxxvii. ibid.

xxxviii. PwCCanada. “New SEC rulings: Dodd-Frank.” http://youtu.be/GQocq4034RM

xxxix. “Vast Majority of Electronic Companies Not Yet Ready for U.S. Conflict Minerals Law.” Cellular-News. Oct 29 2012. http://www.cellular-news.com/story/57082.php

xl. Global Witness. The Kimberly Process at Risk. Global Witness Publishing Inc, 2006.

xli. Ernst & Young. Dodd-Frank Section 1502 and the SEC’s Final Rule. EYGM Limited, 2012.

xlii Severine Autesserre, “Dangerous Tales: Dominant Narratives on the Congo and their Unintended Consequences,” African Affairs, 111, no. 443 (2012): 9, 10.1093/afraf/adr080 (accessed March 17, 2013).

xliii. ibid.

xliv. Krasner, Stephen. International Regimes. Ithaca, NY: Cornell University Press, 1983. (accessed March 17, 2013).