Congo’s conflict minerals
Embedded in the financial reform President Obama signed into law last week was a truly historic regulatory provision — one that doesn’t pertain to Wall Street but to the Democratic Republic of Congo. In an effort to choke off funding for the armed thugs and rebel militias that have killed more than 5 million people and turned Congo into the rape capital of the world, the new law will require thousands of U.S. companies to disclose whether their products contain minerals from rebel-controlled mines.
Tin, tungsten, tantalum and gold are essential to the manufacture of cellphones, laptop computers, digital cameras and other products. It is only in recent years, thanks to public-awareness campaigns by groups such as the Enough Project, that American consumers have begun to understand that the gadgets adding convenience to their lives are often the byproducts of forced labor, sexual violence and mass murder. The new law attacks the rebels financially. Publicly traded companies will have to submit annual reports to the Securities and Exchange Commission disclosing whether their products contain minerals from Congo or adjacent countries. If they do, the companies must explain what steps they are taking to trace the origin of those minerals, to determine whether they come from mines that fund armed conflict. No penalties are imposed, but the disclosure of these steps must be made on the firms’ websites. Until now, many tech companies have relied on their suppliers to reject conflict minerals, with few actually checking to see that they do. Now the world will see their true level of commitment. Some do appear committed: Hewlett-Packard, for example, issued a statement of support for the legislation when it passed.
At first glance the lack of penalties may seem to be a weakness, but that’s appropriate at this stage. Congo also has legitimate, government-controlled operations, and the problem is that ore from all of its mines winds up at smelter’s operations, often in Asia. Efforts by some of the companies are now underway to identify the source of minerals before they reach the smelters, but that process is not yet fully in place.
So “enforcement” will be up to consumers. We hope they will demand changes in the way the industry does business. Concerned consumers campaigned hard before the vote, taking the Facebook walls of tech titans “hostage” and besieging members of Congress. A customer about to purchase an iPhone 4 e-mailed Apple Chief Executive Steve Jobs to ask if he could vouch for it being conflict-free, and when Jobs messaged back that the company relies on its suppliers, it became national news. Soon, however, purchasers will have a choice regarding products made with conflict minerals. For now, that may be the best way to help Congo.