EU criticised for weak law on conflict minerals

By PAUL REDFERN Special Correspondent
Posted Saturday, March 15 2014 at 12:26
IN SUMMARY
A leading UK-based NGO, Christian Aid, said the new law proposed by
the European Commission on responsible sourcing of minerals "is not
strong enough to prevent European companies' mineral purchases from
financing conflict or human rights abuses," and falls far short of
expectations.
The European Union has denied that it is lax in acting on conflict
minerals from the Democratic Republic of the Congo after new
legislation shied away from forcing companies to disclose where they
obtain their stocks from.
In a statement released on March 5, the EU said that its new
"integrated approach" would "stop profits from trading minerals being
used to fund armed conflicts."
The EU added that its package of measures "will make it more difficult
for armed groups in conflict-affected and high-risk areas to finance
their activities through the mining of and trade in minerals.
"The focus of the approach is to make it easier for companies to
source tin, tantalum, tungsten and gold responsibly and to encourage
legitimate trading channels."
However, the new proposals were immediately criticised by proponents
of mandatory and more extensive transparency requirements, including
Judith Sargentini, a Dutch Green MEP who is the European Parliament's
rapporteur on the issue.
A leading UK-based NGO, Christian Aid, said the new law proposed by
the European Commission on responsible sourcing of minerals "is not
strong enough to prevent European companies' mineral purchases from
financing conflict or human rights abuses," and falls far short of
expectations.
"Instead of putting forward robust legislation that would require a
wide range of EU-based companies to do checks on their supply chains
the Commission announced voluntary measures that will only apply to
companies importing processed and unprocessed minerals into the
European market."
The proposal covers companies involved in the tin, tantalum, tungsten
and gold. Campaigners warned that the Commission's proposal — an
opt-in self-certification scheme available to a limited number of
companies — is likely to have minimal impact on the way that the
majority of European companies source natural resources.
ALSO READ: Conflict minerals ban in the Great Lakes region gets
stronger despite resistance
Sophia Pickles from Global Witness said: "The proposal is tantamount
to the EU saying that it's ok for companies to choose not to behave
responsibly. This risks undermining the duty states have to protect
human rights, which is well-established under international law. The
proposal could even be redundant. EU governments have already endorsed
voluntary due diligence guidance developed by the Organisation for
Economic Co-operation and Development."
"It's absolutely critical that the EU enforces existing international
standards," said Seema Joshi from Amnesty International. Anything
short of a mandatory reporting obligation for EU-based companies using
and trading natural resources, will fail to prevent Europe from acting
as a conflict mineral trading hub. Nor will it ensure that European
companies avoid causing or contributing to serious human rights abuses
when sourcing from these high-risk areas."
The proposal, which follows similar measures adopted in the United
States in 2010 and in force since January, would apply pressure on
more than 400 European smelters and refiners to demonstrate to their
customers and the public the place of origin of their gold, tin,
tungsten and tantalum.
Armed groups and security forces in conflict regions can finance their
activities from the proceeds of mining and trading of minerals which
later enter the global supply chain.
Companies further down the production chain run the risk of supporting
armed activities and have an interest in sourcing from such regions
responsibly.
The US legislation, part of the Dodd-Frank package of finance-related
legislation adopted in 2010, covers the same set of minerals. It is,
however, significantly, more challenging for business, imposing
transparency requirements on all companies in the supply chain,
including retailers.
The Commission's proposal is more extensive geographically, as it is
global in scope, while the US legislation applies just to the
Democratic Republic of Congo and nine of its East African neighbours.
EU officials acknowledge that the Commission's proposal is largely a
reaction to the Dodd-Frank measure, as the US legislation applies to
all companies listed on the US stock-markets, many of them European.
The EU Commission says that "only 12 per cent of companies listed on
EU stock-exchanges not directly subject to the US legislation refer to
conflict minerals on their websites."
The best documented and known case relates to the problems in the
eastern Democratic Republic of Congo where the UN frequently reports
on the devastating instability created by foreign and national armed
groups generating revenues through their control over natural
resources.
The Heidelberg Institute for International Research estimates that,
together, natural resources and conflict account for roughly 20 per
cent of global conflicts.
One of the objectives of the EU's proposal is to break the link
between minerals extraction, minerals trading, and the financing of
armed conflicts.
The root causes of the problems must be identified, the EU says, as
should the triggers of conflicts and structural fragility, their
dynamics, and the roles of the various actors involved. A second
objective is to create a market in the EU for responsibly traded
minerals that originate in conflict regions.
A third objective is to improve the ability of EU operators wherever
they are in the supply chain to comply with existing due diligence
frameworks.
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