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Resolving the Conflict Over ‘Conflict Minerals’

More than two years after the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law, the US Securities and Exchange Commission has issued rules on the act's conflict minerals provision.

The provision is intended to encourage companies to do more to make sure the tantalum, tungsten, tin, and gold in their products do not come from illegal sales of materials from mines in the Democratic Republic of Congo (DRC). Those sales are believed to be financing rebels in the country's civil war, a war in which millions have died. An anti-genocide group, the Enough Project, links the Congo violence to the use of these minerals in consumer electronics products such as cellphones, computers, and TVs.

According to a recent KPMG summary, the final rule requires a company that uses these minerals to annually disclose information about their origin. If the company knows, or has reason to believe, that the minerals may have originated in the DRC or an adjoining country, or that they may not be from scrap or recycled sources, the company is required to perform due diligence on the source and chain of custody, and to submit a report on that due diligence to the SEC.

The rule applies to public companies that trade on a major US exchange, which means it will affect almost 6,000 domestic and foreign issuers. Nonpublic companies that are part of the public company's supply chain may also be affected.

However, it appears that the SEC heeded industry lobbying to delay full implementation of the law. According to an article in Supply Chain Brain, for the next two to four years (depending on the size of the company), those subject to the rule can simply identify their products as “DRC conflict undeterminable,” which relieves them of the requirement to get an independent audit of their conflict minerals reports.

A Tulane University study conducted last fall, which drew on data gathered by the Association Connecting Electronics Industries (IPC), assessed the costs of implementing the rule to be almost $8 billion, more than 100 times greater than the SEC's original estimate.

“The Tulane study underscores the need for the SEC to be conscious of the high costs of implementation,” said Tony Hilvers, IPC vice president of industry programs. “The SEC must utilize all reasonable options to lessen the burden of implementation, the most important of which is a phasing-in of the regulations to allow industry the time to work with their complex global supply chains to develop traceability and compliance data.”

This fall, the IPC has scheduled a series of seminars in Boston, San Francisco, and Chicago to help explain the requirements of the new rule. (For more information, contact the IPC's Fern Abrams at .)

The final SEC rule is available through this link.

23 comments on “Resolving the Conflict Over ‘Conflict Minerals’

  1. Cryptoman
    September 7, 2012

    When İ read about such regulations, sanctions and limitations, İ feel either some people live in a bubble or they simply prefer to take the easiest action to look like they are addressing a particular problem effectively. İf there is a war in a country and it needs financing, this can and will be done in a number of ways. Limiting the purchase of minerals is like scratching the tip of an iceberg. Take İran for example. All UN and NATO countries are forbidden to carry out cash transactions with İran as far as İ am aware and yet İran does not seem to run out of money. This is because rather than paying for İranian imports in cash, some countries simply export gold instead and the problem is solved. As the saying goes “where there is a will, there is always a way”.

  2. R.J.Matthews
    September 7, 2012

    Which drew on data gathered by the Association of connecting electronics industries last fall. Things have moved on a lot since then and industry has had many concessions to lessen the potential cost. Even before that the Tulane study looked way to high.

    Other much lower estimates out there.

    http://financialservices.house.gov/uploadedfiles/hhrg-112-ba20-wstate-bcalder-20120510.pdf

    We have previously estimated that compliance to dodd-frank1502 will cost companies an average of 0.03% of revenue in the first year (reducing by 50% in each of the following two subsequent years) with the highest possible industry cost of $800m. Since that estimate, we have seen more efficiency from industry and our previous numbers are now a substantial over estimate.

    The key reasons for differences between claigan's projections and other projections

    provided to these are:

    a) Claigan's cost estimates are based on real programs being implemented

    b)Contrary to other cost models submitted to the sec, we assume that only those products that have conflict minerals' intentionally added' will be reported on. This will exclude common materials where conflict minerals naturally occur, like steel.

    c)Sec staff has indicated the conflict free smelter program would meet the due diligence requirements of dodd-frank 1502, and claigan assumes that also.

    d)Claigan assumes the third-party audit requirements in the sec rule wil lnot require companies to send third party auditors to their suppliers or to the drc–this was congress's intent.

    Notice claigan was very accurate over its guesses over how things were going to play out.

     

    Recently you have flawed study from UC Davis.

     

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2129371

     

    Some organizations of course have had a incentive in the past to exaggerate the costs of implementation and there is still the possibility of the chamber of commerce to play thisgametosinkthenewrules.

     

     

     

    Think generally though business is being persuaded.

     

    http://www.forbes.com/sites/csr/2012/05/09/more-than-csr-the-benefits-of-conflict-minerals-disclosure-to-business-and-investors/

     

     

     

    But the story is not that simple. To complicate matters, the sec has been increasingly targeted in rule making by industry and business groups, including the US chamber of commerce.

     

    The chamber has also indicated that other dodd-frank regulations are within their cross-hairs, including conflict minerals regulations.

    As owners of companies, investors should be alarmed by the attacks being levelled by the chamber of commerce and other industry groups against regulators.

    http://www.foxbusiness.com/markets/2012/08/27/conflict-minerals-shame-game-will-it-work/

     

     

    “in theory, [consumers] are not going to want to buy products of warlords that are killing and raping people,” she said.”if that's the premise we're going on,the ruling makes sense.”

     

    Time to stop fighting the regulations and work on making them work.

     

    http://www.enoughproject.org/blogs/new-enough-policy-brief-making-sense-sec-conflict-minerals-regulation

     

    While the final rule is not perfect, it moves the conversation forward. The rule gets companies that use conflict minerals to report,and gives actors that care about this issue and want to invest in congo, like intel, motorola, kemet and hp, the terms by which to operate.The enough project will continue to laud companies working to eliminate the trade in conflict minerals,and bring to the attention of the sec and the public companies who are not.

     

      

     

     

     

     

  3. R.J.Matthews
    September 7, 2012

    http://www.nytimes.com/2012/08/07/business/standard-chartered-bank-accused-of-hiding-transactions-with-iranians.html?ref=global

    Such rules might work better if those that should know better did not break them Cryptoman.

    The conflict mineral trade in this case is having a massive effect with a leader of a rebellion  in the Drc having made a fortune through the trade and getting support from a country that is also making a lot of money from  the trade.

    Old as time the problem of countries being exploited for their natural resources, all the way from the ancient civilisations conquering counties to get slaves to Japan with its greater east asia co-prosperity sphere(during the second world war)and Saddams invasion of kuwait.

    Just because it is hard tototally eliminate a problem does not make it right to do nothing to diminish it.

     

  4. mario8a
    September 7, 2012

    Recently I was aware about a tensile strength issue related to a component in the automotive industry, after some investigation the company find out their supplier was sourcing the raw material ( including a blend of some minerals ) from what they call a mini mill supplier, wich means their source from either third world countries in Africa and moreover recicle material.

    Minerals have becamo a conflict, mainly for the core element for speakers, which raised it's price up to 400% in the last year.

    Mario Ochoa.

  5. R.J.Matthews
    September 8, 2012

    http://agmetalminer.com/2012/09/05/how-conflict-minerals-rules-affect-steel-scrap-and-gold-supply-chains/

    Interesting bit here on recycling there should not be any reasonable excuse for suppliers to push the price up significantly especially by 600 percent!

    Industrial metal prices generally have reduced a lot due to the economic downturn  one of the few metals to go up is gold so unless the element is largely gold think the price rise is a bit extortionate.

     

  6. R.J.Matthews
    September 10, 2012

    http://www.supplychainbrain.com/content/technology-solutions/collaboration-integration/single-article-page/article/how-business-should-respond-to-secs-rule-on-conflict-minerals/

    Funny how so many of the regulations that business decries end up yielding bottom-line benefits. We saw the same phenomenon in the wake of new security measures mandated after 9/11. The much-maligned 24-hour rule for filing vessel manifests with u.s. customs and border protection ended up giving importers better information on the status of their shipments. Similarly, sec's conflict minerals rule could equip manufacturers with deeper intelligence about thei rsupplychains, while boosting their brand reputation with consumers.

    Complaints about regulatory burdens and overbearing government not withstanding, there needn't be a conflict between good business and a dedication to human rights.

     

     

  7. Barbara Jorgensen
    September 10, 2012

    The $8 billion mentioned in this article was the figure I was casting for in Douglas' REACH article as well. $8 billion is the estimated cost to the electronics industry to comply with Dodd-Frank, which, as you point out, simply requires due diligence and not compliance.

    The “origin undetermined” assessment is merely a loophole for companies that can't or won't change their supply chain. Brilliant!

  8. Ravenwood
    September 10, 2012

    $8-billion is the estimated cost just for due-dilligence? You could BUY the DRC for less than $8-billion! With an average monthly household income of around $20 I-mean, really, let the U.N. broker an offer.

    Q: Is there an estimate for the cost of compliance ?

    Once industry collectively blows $8-billion on due-dilligence (that almost certainly won't achieve the wishful results) I can imagine compliance legi$lation won't be far behind.

  9. R.J.Matthews
    September 10, 2012

    The eight billion guesstimate was inaccurate and wrong at the time and now looks even more wrong now Barbara, after several concessions to keep the costs down including the origin undetermined one. (see my first post).

    The phase in period is wrong as well considering how long this saga has been dragging on already. It was certain sections of industry and the American chamber of commerce that pushed for it and others measures that mean the rules are not going to be as strong as they should have been. To many cases where the choice was saving lives or saving money and saving money won the day in my view.

    The Sec was in a difficult position though and trying to get a balance of compromise between keeping the cost down and keeping the opposing views happy with the threat of legal action hanging over them if they got it wrong.

    No argument that no one is totally happy with the result but i guess that old saying about politics being the art of the possible is true. Hence

    http://www.globalwitness.org/library/us-securities-and-exchange-commission-votes-landmark-rules
    On the other hand.

    http://charliekimeri.posterous.com/sec-passes-natural-resource-transparency-and

    The intent of Section 1502 of Dodd-Frank (and thus of SEC) was not to mandate penalties for sourcing minerals from mines controlled by armed groups in conflict-afflicted regions. Instead it relies on the adverse reputational effect of such disclosure. Reputable companies would want to avoid having their name associated with armed conflict, human rights violations, slavery and rape.

    Effectively from day one unscrupulous and corrupt companies could ignore Dodd Frank but they run the risk of massive reputational damage and pariah status. That has not really changed.

    Industry has been increasingly won over by the argument for Dodd-Frank though and this is likely to increase as the benefits become more obvious and the costs are shown to be have been exaggerated by some.

    The main benefit being that a lot of good will be done and lives saved.

     

     

  10. bolaji ojo
    September 10, 2012

    The $8 billion is a number some genius pulled out of a hat for the industry. Can anyone truly say they can accurately assess the cost of compliance to the industry?

  11. R.J.Matthews
    September 11, 2012

    Bolaji would expect Claigans estimates to be more accurate as they were based on real programs being implemented plus they were very accurate over the way they thought things would turn out.

    So maybe take their figures as a starting point then reduce it for the concessions given that they did not anticipate then add a bit back on for the unexpected. Then reduce it a bit again for the cost saving made by a greater understanding by companies of their supply chain.

    Saying that agree with you that any estimate of new rules or laws will always involve a certain amount of educated guessing, but if every new rule and law was scrutinized for years and years by various bureaucracies and lawyers the whole of government would grind to a halt.

    You can argue that has already happened but that's another discussion!

     

  12. bolaji ojo
    September 11, 2012

    R.J. There's a payoff to companies for being compliant with these rules despite the obviously high cost and sometimes the additional personnel involved. As it is difficult to determine the actual cost of compliance so is it difficult at times to determine the cost of non-compliance! In this case, compliance is a cheaper price.

  13. Barbara Jorgensen
    September 11, 2012

    The $8 billion fgure was researched by the IPC via Tulane University. Maybe academia isn't the best place to research such things (as some would argue it is not the 'real world'.) It does sound like a lot of money. However, I think there has been research on RoHS which measures the cost of R&D that went in to finding comparable lead-free solders and new equipment to process these solders. It's a pretty hefty number. (I think DCA covered this in a Webinar and I will find my notes). I fully support the spirit of Dodd-Frank but I still think as a directive it lacks any real incentive to comply. Let's assume for a moment the $8b is correct. As a reader points out, it's less expensive to buy the mining operations outright and ensure worker safety. BTW, who exactly is going to check the compliance statements?

  14. R.J.Matthews
    September 11, 2012

    Agree Bolaji there is a payoff. Hence lot of companies getting on board before the rules were even confirmed.

    Qoute
    http://financialservices.house.gov/uploadedfiles/hhrg-112-ba20-wstate-bcalder-20120510.pdf

    We work with companies across industries on Conflict Minerals program management, cost management, and compliance assistance for over two hundred small, medium and large companies.

    I would like to start by saying we have never seen such widespread early adoption of a transparency law.

    In ten years of working in restricted material compliance, including global regulations such as Europe's hazardous substance law, its restricted chemicals law, and California's toxins and safe drinking water law, I have never seen so many companies becoming compliant before the final rules have come out.

    I think in many ways we are far past the issue of can it be done and is it costly – it can be done and at lower-than-publicized cost.

    If there was not any real incentive to comply you would have not had these companies getting on board.

    Barbara on the IPC leadership they have hardly been neutral by their own admission but even they admitted that they got most of what they wanted.

    http://www.ipc.org/ContentPage.aspx?pageid=IPC-Advocacy-Helps-Shape-Final-SEC-Conflict-Minerals-Regulation
    Following years of advocacy, IPC and its members are relieved that the conflict minerals rule approved by the U.S. Securities and Exchange Commission (SEC) today includes all of the key provisions for which the organization has been lobbying.

    On buying the operations outright sounds a bit like the solutions for hope program http://solutions-network.org/site-solutionsforhope/ which is a good idea.

    However would not be that easy for the international community to take over all the DRC mines bar some kind of international intervention on the scale of Iraq or Afghanistan. The size of Congo, 2,345,408 square kilometres (905,567 sq mi), is slightly greater than the combined areas of Spain, France, Germany, Sweden, and Norway.

    The country already has a massive UN presence as well which is struggling. At the moment you have money being poured in on one side by the conflict mineral trade that is stirring up trouble and on the other massive amounts to finance the UN to try to contain that trouble which is madness.

    Investment in the formal mining sector has been held back by corruption and the problems Dodd Frank is there to help fight.

    On the compliance side i would think a lot of work will be done by the smelters as that is the natural pinch point in the supply chain.
    http://www.enoughproject.org/blogs/tin-tungsten-gold-smelters-time-go-conflict-free

    Think the recent hacking by anonymous (though i think they went after the wrong targets and the actions were a bit counter productive) shows that some companies would be naive if they think they can carry on dodging the new rules indefinitely without being highlighted.

    The NGO's that have been pushing for Dodd Frank have masses of information anyway on the companies and others that have been involved in the trade and are sure to keep the pressure on.

     

  15. Hilvan
    September 11, 2012

     

    Ok, so we have industry and academia conduct a study on conflict minerals. Through their research, they have assigned a dollar figure to the impact of the regulations and they are wrong because … the numbers just don't sound right?

    Think about the scope of Section 1502 of the Dodd-Frank Act. Every publicly traded company will have to report and this requirement flows down into every industry's supply chain every year.

    But this discussion is about money and it shouldn't be. The issues in the Democratic Republic of the Congo are complex and passing a law like Dodd-Frank isn't going to magically change this tragic issue. What we now have collectively done is to force the business community to address an issue that the U.N. has tried to solve beginning in 1999 when they deployed troops to the DRC.

    Voluntarily the electronics industry was making great strides to bag and tag minerals and create an audit program for smelters. Now, the law, as many of us feared, has created unintended consequences. From a September 11th article in Think Africa Press : “Unemployment and the drop in artisanal mining production need to be addressed by the DRC government and the international community. Aside from the obvious humanitarian problems posed by poverty, there is a danger that miners unable to support their families with legitimate mining activities may turn to less lawful means of income. Likewise, armed groups and criminal networks involved in mining may turn to other sources of income ranging from illegal logging to poaching, and continue to prey on local populations.”

    But let's not forget too about other countries in the Great Lakes Region of Africa which are also impacted by Section 1502.

    Section 1502 created a whole new ball game in the DRC. It's now a costly program whatever dollar figure you assign with a whole host of unintended consequences.  

  16. Barbara Jorgensen
    September 12, 2012

    @hilvan: well said. A number of consultancies we work with emphasize unintended consequences in many aspects of the supply chain. Another classic example is REACH: for every chemical that is banned, another chemical will take its place. How are we to know at this point whether the substitute chemical is better or worse than the original? There is a body of research that points to lead, mercury and other materials being bad for people and the environment. There is not a lot of research on the substances that replace them (with the possible exception of lead-free solders–lots of stuff on that.) But to your point: we can run this stuff through academic models, but until it is tested in the “real world” costs are just an estimate.

  17. R.J.Matthews
    September 12, 2012

    Hilvan was ready to give you some credit over the fact the discussion is not just about money but then you went and had a catalogue of errors in your post!

    The new law is not as pervasive as you make out and industry gained a whole slew of concessions.

    Rather than make a long post even longer think you might find this helpful in better understanding the new rules and when and where they come into operation.

    http://prezi.com/_rahxrywggbg/elm-summary-of-secs-final-conflict-minerals-regulations/?auth_key=d2fa840c323b348fe7e22368f5fd87b83f7de24e

    Industries progress on this issue has been held back by the delay in bringing and confirming Dodd Frank, unsurprisingly some companies have been waiting on the sidelines to see the shape of the final rules and whether the new rules would come in at all.

    The early adopters can now benefit by having a level playing field and knowing the work they have put in has not been wasted.

    With the smelter program this is especially true as not all smelters have signed up no doubt they were waiting to see how things would turn out as well with the ones with the worst record hoping that the whole issue would just go away.

    Not all issues can be solved with just sending the in the marines or gunboat diplomacy and industry should have been focusing more on this issue a decade ago then more progress would have been made.

    http://thinkafricapress.com/drc/mining-has-due-diligence-helped

    The article is a reprint from 24 of February and so is a bit out of date hence no mention of the present rebellion.

    Other bits hardily support scraping Dodd Frank.
    On the other hand, many sources, including the UN Group of Experts, report that the move away from conflict mining has denied armed groups and criminal networks within the FARDC one of their key sources of income.

    Although the introduction of due diligence practices has had unintended consequences for the mining communities, they have succeeding in what they were set up to do, namely to stem the flow in conflict minerals and deny armed groups the chance to exploit natural resources.
    Multi-faceted strategies

    In the future, the changes in the artisanal sector fostered by due diligence guidelines and the Dodd-Frank Act are likely to remain, and the exploitation of minerals by armed groups will most likely continue to decline…

    With the benefit of hindsight article did rather get it wrong as well over the CNDP.

    An alternative avenue for such groups to maintain power, for example, presented itself during the recent National Assembly elections.

    The Institute of War and Peace reported the use of intimidation of voters by former combatants and members of the National Congress for the Defence of the People (CNDP), a Kivu-based militia implicated in human rights abuses and trade of conflict minerals.

    Obtaining political power by getting candidates into the National Assembly, it is thought, can enable groups like the CNDP to be less reliant on artisanal mining.

    The implementation of due diligence practices must therefore not be the only response to the security situation in the eastern DRC.

    CNDP and Bosco Ntaganda got a lot of concessions but they are still wedded to the conflict mineral trade along with Rwanda.

    http://www.enoughproject.org/blogs/m23-wider-influence-mobilizing-militias-stirring-ethnic-conflict

    On artisanal mining generally the miners are largely pro the new rules as they are getting tired of being robbed killed or “taxed” of a lot of their earnings.

    The present conflict in the Kivu's shows the consequences of allowing conflict mineral kingpins and the trade to prosper.

    The solutions for Hope project covers artisanal mining collectives and has just got another boost.

    http://www.epdonthenet.net/article/53076/Bosch-joins-the-AVX–Solutions-for-Hope–project.aspx

    The plan like the tagging is roll it out in ever increasing numbers and so clean up the trade and avoid companies avoiding the DRC.

    Eventually with a cleaner trade the DRC is likely to gain an investment boom into is mining sector generally. Which over the long term outweighs temporary disruptions in the artisanal mining trade.

     

  18. Hilvan
    September 13, 2012

     

    “The law is not as pervasive as you make it out?” Oh, really? I am familiar with the Elm presentation. It is very well done and provides an excellent overview of conflict minerals.

    Yes, the law is pervasive. It impacts almost every publicly traded company and de facto their supply chain. Please don't minimize the significant impact of this legislation on companies or marginalize the argument away. Yes, there were some concessions including recycled materials but the reporting requirements will still be a significant burden to companies.

    And more importantly, what is the effectiveness of the regulations? Again from an article in Think Africa Press, September 3, 2012 entitled Sexual Violence in the DRC: What Good is the Dodd-Frank Act?:   “The Dodd-Frank law originally came about as a result of campaigning by groups such as Human Rights Watch, the Enough Project and Global Witness, and since the passing of the law in 2010, companies with registered trading houses have officially adopted the appropriate due diligence measures. But the act has not been a silver bullet.

    “Chinese-owned businesses are not subject to the law and do not yet follow the Frank-Dodd requirements. To fully address the issue of conflict minerals, this blind spot will have to be examined. The act has also been criticised for placing the onus on companies and thus removing responsibility from the Congolese government even though corrupt government officials and groups linked to the Congolese army (FARDC) have played a significant part in controlling mines. Greater research into the identity of individual armed groups, their national and international partners and their mode of functioning would be necessary to make the law truly effective.

    “Other criticisms address the virtual embargo on minerals from the region that has followed the act, the gradual closing down of mines, and the loss of work for countless Congolese workmen and local communities.”

    Let's be honest, the NGOs tend to minimize the cost of 1502 and maximize its positive impact on the DRC. They have to; either that or be party to the starvation of a group of people (artisanal miners) through this legislation. That wouldn't look good, now would it?

    The jury is still out on the effectiveness of this regulation. But what's certain is that 1502 is going cost many U.S. companies money and to an extent globally weaken their competitive position.  

  19. R.J.Matthews
    September 13, 2012

    Hilvan Lets have the link and the context.

    http://thinkafricapress.com/drc/conflict-minerals-and-issue-rape-dodd-frank

    Article Starts.

    The pervasive militarism, prevalent sexual violence and vast mineral wealth in the Democratic Republic of the Congo (DRC) are linked.

    It was with this in mind that, on August 22, the Securities and Exchange Commission (SEC) – the body which regulates the securities industry and markets in the United States – adopted the Dodd-Frank Wall Street reform act.

    The act requires public companies to disclose whether minerals used in their products originate from the DRC or any adjoining country.

    The silver bullet quote.
    A step in the right direction

    To address this, industry has started trying to regulate the trade underlying the prevalence of sexual violence in the region. The International Tin Supply Chain Initiative (ITSCI) has been working on increasing transparency in accordance with Organisation for Economic Cooperation and Development's (OECD) rulings and, according to the most recent Enough Project report, a number of companies have started to take measures limiting the use of conflict minerals.

    The Frank-Dodd law originally came about as a result of campaigning by groups such as Human Rights Watch, the Enough Project and Global Witness, and since the passing of the law in 2010, companies with registered trading houses have officially adopted the appropriate due diligence measures.

    Seems think Africa press thinks pervasive militarism prevalent sexual violence and mineral wealth are linked and that Dodd Frank while not a silver bullet is a step in the right direction.

    “The law is not as pervasive as you make it out?” Oh, really? I am familiar with the Elm presentation. It is very well done and provides an excellent overview of conflict minerals.

    From the presentation.

    One has to be a publically traded company (not any old company)

    Considered outside the supply chain minerals that have been smelted or refined outside the covered country by Jan 31 2013.

    Scrap is considered DRC conflict free.

    The rules only apply to issuers who are manufactures or contract to manufacture.
    RCOI has only to be reasonably designed and performed in good faith.

    The first report is not due to May 2014.

    Drc conflict undeterminable available to all issues to 2015 (2017 smaller companies).
    The law does not mandate public labelling, Ban DRC sourced products.

    Require material substitutions or changes in supplies.
    No penalties the enforcement mechanism is reputational risk.

    Hardily the most pervasive or punitive law to ever be passed.

    The main fall out is likely to fall on the smelters which i agree will impact on a lot of the supply chain including Chinese companies.

    The NGO's are not blind to the importance of looking after the miners or think that Dodd Frank on its own will solve all the problems.
    http://www.enoughproject.org/blogs/new-enough-report-dodd-frank-decrease-conflict-minerals-trade-congo-smuggling

    http://www.enoughproject.org/files/ConflictMinerals_CongoFINAL.pdf

    The Enough Project conducted interviews with more than 100 miners in North and South Kivu, the majority of which viewed the transformation to a clean minerals trade as a way to liberate themselves from slave-like work conditions.

    Over the past year, many miners in the Kivus have changed livelihood strategies to working in conflict-free mines in neighboring provinces or in the agriculture or small business sectors. These miners, however, need greater security and increased start-up capital to succeed.
    On the success of measures the focus on the trade has already had some successes.

    estimated 65 percent decrease in profit over the past two years for armed groups in eastern Congo from their trade in the conflict minerals of tin, tantalum, and tungsten.

    The report also found that this financial strain, coupled with military pressure, has attributed to a 75 percent decrease in size over the past two years of the Rwandan Hutu FDLR militia, a notorious rebel group operating in eastern Congo.

    “But what's certain is that 1502 is going cost many U.S. companies money and to an extent globally weaken their competitive position.”

    The act is going to cost money but not anything like some of the estimates being thrown around. The companies that are going to suffer most over their competitive position are those that suffer reputational damage by not having a clean supply chain whether they are American companies or not.

    http://www.walkfree.org/en/actions/nintendo

    http://mynintendonews.com/2012/09/13/nintendo-manufacturers-promise-not-to-use-congo-conflict-minerals-in-wii-3ds-wii-u/

     

     

  20. Tam Harbert
    September 14, 2012

    I agree that the law is not that onerous. The industry won a significant concession in that companies can -for the next two to four years – avoid having to get audits by simply identifying their products as “DRC conflict undeterminable.” That buys them time. And that time gives industry a real chance to change or even eliminate the regulation, especially if there is new leadership in Congress and/or the White House.

     

  21. R.J.Matthews
    September 15, 2012

    Bit of a pyrrhic victory for industry Tam getting so many concessions and a phase in period as it means NGO's will keep highlighting the problem and pushing for change.

    They could have put the whole issue to bed by being more reasonable as plenty of other areas NGO's would like to focus more on.

    Recent events in the DRC mean more of a spotlight on the conflict mineral issue anyway.

    Not sure who is going to win the race for the White house but noticed Romney is being portrayed as a heartless corporate asset stripper, so would not exactly look good if one of his first actions was scrap this law.

    In the end one thing i think everyone can agree on is the input and actions of supply chain professionals will be vital in the way things play out.

    http://www.greenbiz.com/news/2012/09/14/honda-ford-conflict-minerals-reporting-tool

     

  22. Mr. Roques
    September 21, 2012

    I'm sure those big companies don't send a supply employee over to Ghana to deal with the mercenaries… there are probably several levels of intermediaries that make it difficult, even for the experts to trace it back to Ghana.

    No?

  23. bolaji ojo
    September 21, 2012

    I don't think employees would hurry to volunteer anyway if an electronic company wants to send them to a conflict minerals zone. That type of offer isn't so great.

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