That would be the wrong conclusion, however. The real goal should not be to simply follow Dodd-Frank or “Europeanise” it. The EU’s version should go further by addressing the weaknesses of the American act – complementing regulation by the market with a political and developmental approach that is currently lacking.
The Dodd-Frank Act imposes two obligations of transparency on companies with securities registered in the US: financial transparency in the extractive industries and transparency of supply in case of mineral imports from the African Great Lakes region. This law translates the due diligence principle for the identification of the origin of imported ores and the principle “Publish What you Pay” of the Extractive Industries Transparency Initiative (EITI) into national law. Although it is already applied to other economic sectors like banking and the food industry, the introduction of due diligence into U.S. legislation caused great controversy. Indeed, it aims at making transparent a business that prefers darkness to light and discretion to advertising.
The Dodd-Frank Act has undoubtedly been “raising the bar”, however it raises more questions than answers. First, it is very challenging to create conflict-free supply chains from the Kivu provinces, an area where the Congo government’s authority is only theoretical. The two highest authorities of the Congolese government have called for the demilitarisation of mining sites in 2009 and 2010 with little effect.