Conflict minerals: still a long road for the European Union

July 18, 2019

Article, DR Congo, Natural resources, European Union

In March 2017, after several years of negotiations and advocacy by civil society organizations, the European Union (EU) finally tackled the problem of conflict minerals by adopting a regulation. Although the step may seem important, it should be remembered that it is only a first step and that additional efforts are still essential to ensure that our consumption no longer finances armed conflicts.

Concretely, what does this mean? This regulation aims to regulate the importation into the EU of four specific minerals: tin, tantalum (produced from coltan), tungsten (also known as wolframite) and gold. Together, these 4 minerals are nicknamed “3TG”. Also known as “conflict minerals,” they are considered most linked to the financing of armed conflict, corruption, money laundering and human rights violations. However, they are found in many everyday consumer products such as high-tech devices (high tech: smartphones, tablets, etc.), cars and jewelry. They are almost omnipresent in our daily lives. According to these new rules, companies present on EU territory will have to, from January 1, 2021, implement their “duty of diligence ". They will therefore have to verify that the minerals they source have not been produced in a way to finance conflicts or other illicit activities. Concretely, this means that importing companies will have to:

Establish effective information management systems (for example, identify imported minerals and quantities, specify their country of origin, the name and address of their suppliers, etc.);
Assess the risks associated with the supply of minerals, i.e. the likelihood that these raw materials finance conflict, are the product of forced or child labor, etc. ;
React responsibly to manage and remedy identified risks;
Carry out an independent audit conducted by third parties;
Publish a report each year on the exercise of their duty.

Rules that are too unambitious If Belgian and European civil society has welcomed this first legislative step for which it has advocated for many years, it nevertheless regrets that the final text is not as ambitious as that initially proposed by the European Parliament. Many concessions were in fact made to companies during the negotiations, gradually emptying the law of its substance. . Justice and Peace deplores, for example, the fact that the regulation does not cover the entirety of supply chains obligatory but, on the contrary, it provides different rules depending on where the companies are located. In fact, only “upstream” companies, that is to say those which extract, smelt and refine minerals, must implement their duty of care. Those “downstream”, which transform metals into finished products and sell them to end consumers, are only required to do so if they import products at the metal stage. Companies at the end of the chain that import finished products, such as mobile phones, are ultimately not subject to any obligations under the regulation, even in the presence of these problematic minerals. We simply hope that they use information tools to reinforce the transparency of their duty of care. The European Union is very dependent on the import of a large number of raw materials. For example, it is 100% for tantalum, considered a critical raw material for the EU. . But ultimately, given that the majority of imports into the EU consist of minerals already processed and assembled in factories in Asia, the regulation will affect only a few companies (only 450 according to estimates). . These are today very little controlled, even though they are just as present in our daily environment (cars, electric batteries, industrial equipment, etc.). Thus, in the eyes of civil society, the EU missed a unique opportunity to truly commit to the defense of human rights. And by 2021? Although the regulation will not take full effect until January 1, 2021, certain measures must and have already been taken. For example, the European Commission has put in place a certain number of criteria to certify due diligence mechanisms. . These would make it possible to certify that these voluntary responsible sourcing initiatives, to which companies can adhere, pursue the same objectives as the regulation or similar objectives. In this regard, let us remember that simply joining such a voluntary mechanism cannot in any case be sufficient. On the contrary, it is proven that, despite adherence to such a mechanism, the effective application of the duty of care is not guaranteed . The European Commission should therefore go further and ensure that companies which adhere to such mechanisms actually put their duties into practice, in particular through regular evaluations and controls. As has already been the case in the past, companies risk otherwise taking advantage of the positive image of such membership without taking the necessary measures. EU member states, for their part, remain responsible for the effective application of the regulation. They must therefore appoint a competent authority for the application of the rules (in Belgium this is the FPS Economy), establish and make public the list of national importing companies, then, from 2021, carry out checks to ensure that importers respect their obligations. The customs services of several Member States, including Belgium, have however already expressed reluctance to such disclosure of data, invoking a confidentiality clause in the Union Customs Code (UCC). Civil society recalls that the same code provides for an exemption in the event of a legal obligation, such as that provided for by the regulation . What's more, transparency is the keystone of the regulation and, more generally, of the duty of care. It is therefore a question of the very effectiveness and credibility of the regulation that these lists be made public. Finally, for the moment no sanctions for non-compliance are planned. According to the regulation, it is the Member States which set the rules applicable to violations. It is therefore crucial that the competent national authorities immediately plan and follow up appropriate measures in the event of companies' non-compliance. Going beyond the regulation, a necessary commitment The regulation provides that by January 1, 2023 at the latest, then every three years, the European Commission will review the functioning and effectiveness of this new system. If necessary, it may propose new measures to ensure a responsible mineral supply chain. Civil society already has numerous recommendations and avenues for improvement that it will propose. In the meantime, and given the inherent limitations of this regulation, it is important that the European Union and its Member States take additional steps to address other issues, including development and governance in the mining sector. As such, the EU committed in 2014 to taking a series of “accompanying measures » in order to improve the effectiveness of the regulation and to dedicate 20 million euros to it. These mainly involve incentive measures for the private sector, political dialogue with third countries and development cooperation. Unfortunately, most of the measures taken so far suffer from several shortcomings . In order to give voice to civil society in producing countries and obtain their points of view on the risks, opportunities and challenges linked to the regulation and its accompanying measures, Justice et Paix and its European partner EurAc organized a workshop on April 29 and 30 in Brussels with members of Congolese and Colombian civil society. This made it possible to develop several recommendations for the attention of Belgian and European political decision-makers in order to improve the effectiveness of these new rules and their impact on the ground. . In the specific context of the Democratic Republic of Congo, the country with which Justice and Peace works, it is, for example, urgent to strengthen the governance of the artisanal mining sector. This necessarily involves formalizing the sector and improving conditions for artisanal mining (which would concern around 2 million diggers), for example through:

Access for artisanal workers to secure mining zones (the legislation on artisanal mining zones (ZEA) already offers this possibility, but its implementation remains incomplete);
Technical and financial support for artisanal miners and local communities so that they can create and manage cooperatives ^[15]On the issue of mining cooperatives, see EurAc, Accompanying measures to the EU Regulation on responsible mineral sourcing, For strengthening the governance of… Continue reading (for the moment, in reality, it is rather the elites who often benefit from cooperatives), access to credits and microcredits;
Strengthening the capacities of Congolese state authorities and administrations, in particular the Small Scale Mining Assistance and Supervision Services (SAESSCAM) and the Mines Division;
A more equitable distribution of certification and audit costs between artisanal diggers, intermediaries, and the downstream sector (certification costs currently fall disproportionately on artisanal diggers);
More direct cooperation between downstream companies and craft cooperatives to implement due diligence and shorten the supply chain;
Support and protection of Congolese civil society, particularly in its advocacy and training work;
A strengthened political dialogue at the regional level, particularly at the level of the International Conference on the Great Lakes Region (ICGLR), to enable better implementation of the regional certification mechanism, harmonization of taxation, and thus fight against fraud mining to neighboring countries.

While waiting for these upcoming deadlines, civil society will continue to closely monitor legislative and political developments related to this issue. Change rests largely on politics and business. But also on citizens who, through their choices and consumption, can influence what happens at the other end of the supply chain. Although the human realities experienced by people experiencing conflict and violence in areas rich in natural resources may seem far away and disconnected from what we experience, the objects we use every day and that we hold so dear should remind us that we are ultimately intimately linked to their fate. More than a question of ethics, it is our responsibility. Questioning and changing our consumption patterns remains today the most direct and effective way to move things forward. So let's think twice before buying and throwing away! Agatha Smyth.

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Conflict minerals: still a long road for the European Union

Notes[+]

Notes
↑1	A regulation is a legal act of the European Union (EU). It is mandatory and directly applicable in all EU member countries.
↑2	This duty of care corresponds moreover to that provided for in the “ OECD Due Diligence Guidance for Responsible Supply Chains for Minerals from Conflict and High-Risk Areas » which, in certain parts, also addresses 3TG. Although it represents the reference text on the subject, the OECD guide remains voluntary, therefore subject to the goodwill of companies. The EU regulation is theoretically binding, that is to say obligatory.
↑3	See also, Justice and Peace, EU and conflict minerals: 2021 deadline, May 2017.
↑4	“Mineral supply chain” means all activities, organizations, actors, technologies, information, resources and services involved in the transport and processing of minerals from the extraction site to their incorporation into the finished product.
↑5	European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the 2017 list of critical raw materials for the EU, COM(2017) 490 final, 13.9.2017.
↑6	Justice and Peace,	↑7	On the subject of diamonds, see the Justice and Peace study “Blood diamonds, what responsibility for Belgium? », June 2019.
↑8	Commission Delegated Regulation 2019/429 of 11 January 2019 supplementing Regulation (EU) 2017/821 of the European Parliament and of the Council as regards the methodology and criteria to be used for the assessment and certification of duty of care mechanisms supply chain diligence for tin, tantalum, tungsten and gold.
↑9	See for example Assessment of Alignment of Industry Programs with OECD Minerals Guidance, 2018.
↑10	For more information on this and on the evaluation of the implementation of the Regulation, see the Joint Policy Note, Ensuring the proper implementation of the EU Regulation on the responsible sourcing of minerals from conflict or high-risk areas, April 24, 2019.
↑11	Joint communication from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy, For an integrated approach at Union level to the responsible sourcing of minerals from conflict or high-risk areas, March 5, 2014.
↑12	For an analysis of the proposed measures, see EurAc, Accompanying measures to the EU Regulation on responsible sourcing of minerals, March 2017.
↑13	European Network for Central Africa.
↑14	A full report of these discussions and recommendations will be published soon.
↑15	On the issue of mining cooperatives, see EurAc, Accompanying measures to the EU Regulation on responsible mineral sourcing, To strengthen the governance of the artisanal mining sector in the DRC, March 2017, p.13-16.