The conflict minerals regulation being implemented by the US Securities and Exchange Commission as part of the Dodd-Frank Act could be just the beginning. Amid reports of minerals coming from conflict in geographic regions other than the Democratic Republic of Congo, some governments — most notably the European Union — are talking about regulating on a broader scale.
Although the Congo conflict is the best known example, it is not the only area where minerals are being used to fund guerilla warfare. “The guerrillas of the FARC (the Revolutionary Armed Forces of Colombia) operating in Colombia and Venezuela are just one other example, using production of both gold and the tantalum ore, coltan, to continue their campaign as cocaine production has become more restricted,” Karel De Gucht, European Commission of Trade, said in a speech in September. As the EU considers its own conflict minerals rule, he said, it will “frame this initiative in the wider context of a comprehensive approach to break the link between conflict and raw materials.”
An article in August by Bloomberg reporter Michael Smith detailed the conflict that De Gucht referenced. Smith describes how Amazon Indians make a living by carting rocks out of a part of the rain forest along the borders of Venezuela and Brazil. Smith reports that the rebel FARC army “uses the cash it makes from selling metals to finance one of the world's longer-running guerillas wars, the Colombian National Police say.”
A big buyer of the tungsten is the US subsidiary of Australian metals processor Plansee, called Global Tungsten & Powders (GTP), says the article. Smith notes that a few days after being asked about the origins of its Colombian tungsten, the company issued a news release saying it would “suspend all further purchases of tungsten from Colombia” pending an independent assessment of the situation.
The article further claims that Apple, Hewlett-Packard, and Samsung all buy parts from a firm that buys from GTP, although it's not clear what component company that is, and says that both Apple and Samsung have opened investigations into the issue.
Meanwhile, experts in the risk and compliance area agree that such regulations are likely to spread and broaden. An article in Compliance Week (subscription required) noted that tin from Indonesia is controversial because of both human rights and environmental concerns. And there is continuing speculation that cobalt, a component of lithium ion batteries, could be deemed a conflict mineral, at least in the Congo region.
In fact, regulations could ultimately include more than just minerals. “Today we are talking about conflict minerals,” Sonal Sinha, associate vice president of industry solutions for MetricStream, a provider of governance, risk, and compliance software, told Compliance Week. “Tomorrow it could be wood or other materials. The list can just go on and on.”