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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.

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