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US legislation on Congo's 'conflict minerals,' explained

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Schalk van Zuydam/AP

(Read caption) Men stand around a bag filled with Cassiterite, a tin product, on the outskirts of Walikale, Congo. Violence in the competition for minerals is spiraling out of control in this corner of Congo, where hundreds of victims of a mass gang-rape that drew international outrage include the mother, wife, sisters and cousins of a militia leader whose fighters were among the alleged attackers.

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I was on a panel on Friday on conflict minerals, which was very instructive. Toby Whitney, the legislative director of Washington's Rep. Jim McDermott (D), was there. McDermott was one of the main sponsors of the "Congo conflict minerals" bill signed into law by President Obama in June this year.

I learned a few things.

First, and most importantly, there had been some debate among experts about the exact provisions of the bill. Toby clarified: The bill does not prohibit companies from buying conflict minerals. Instead, it requires them to carry out due diligence on their supply chain and to report back to the Securities and Exchange Commission what measures they have taken to find out whether they are importing minerals that fuel conflict in the Congo. "It's a name-and-shame bill," Toby said. There will only be fines for companies that do not do good reporting and auditing. Companies that carry out all the correct due diligence and report back to the SEC that they are indeed importing conflict minerals will not be fined.

Hence the importance of pressure from NGOs, press, and private citizens. Since all these reports have to by law made public by the companies, the cost for the company will be reputational. For example, we are already asking Yale University to make clear to the companies it invests in that it will not keep them in its portfolio if (a) they do not carry out all the due diligence required by Section 1502 of the Dodd-Frank bill; and (b) if they do indeed buy minerals that fuel conflict in the Congo. Since Yale has a $17 billion endowment and is seen as a leader in investments, a policy statement could be important.

Secondly, Whitney bemoaned the departure from Congress of some of the congressional leaders on humanitarian issues. Sen. Russ Feingold (D) of Wisconsin was beaten by a Tea Party conservative, and Sen. Sam Brownback (R) resigned from the senate to become governor of Kansas. Both had traveled repeatedly to Central Africa and, whatever we may think about their other political views, had promoted numerous bills and spending on humanitarian issues.

Lastly, Whitney detailed the resistance that had come up against the conflict minerals bill. Like many other congressional staffers, he reported the intense corporate lobbying against the bill. In the end, he said, they had won out because it was difficult for a company to be seen as in support of rape in the Congo.

Jason Stearns blogs about the Democratic Republic of Congo and the Great Lakes region at Congo Siasa.


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