Congo Siasa

So what does the conflict minerals bill actually say?

It seems to be that there has been an awful lot of debate of late about the “conflict minerals bill” – known on the streets as “Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act: Conflict Minerals” – without much mention of what it will actually do. Allow Congo Siasa to edify.

This is what it calls for:
1. Reporting
  • Within 270 days (i.e. by April 2011), the Securities and Exchange Commission has to publish regulations requiring companies to report annually whether they are using minerals from the Congo and what they have done to conduct due diligence on the source of minerals and the chain of custody;
  • They then have to commission a private audit of this report that lives up the standards of the US Comptroller General;
  • The purpose of the report is to ascertain whether they are trading in minerals that have benefited armed groups, either because the groups controls the mines, taxes the minerals along the transport routes, controls the trading houses or benefits in any other way from the trade;
  • Armed groups are not just rebel groups and militias, but also any units that are guilty of widespread human rights abuses;
  • These reports then become available on the Internet to the public;
2. Strategy
  • Within 180 days, the Secretary of State, in consultation with USAID, must submit a strategy to Congress on how to deal with the linkages between armed groups, human rights abuses, conflict minerals and the minerals trade;
  • This strategy must support efforts by the Congolese government and UN Group of Experts to monitor and prevent the financing of armed groups through the minerals trade;
  • It must also help strengthen institutions involved in the management of this trade so as to make cross-border trade more transparent and legitimate;
  • It should provide guidance to private companies on how to conduct due diligence;
  • And propose punitive measures for those entities found to be trading in conflict minerals;

3. Map

  • Within 180 days, the Secretary of State shall (in according with the UN GoE report) produce a map of mineral rich zones and areas under the control of armed groups and make it available to the public;
  • The map must be updated every 6 months;

4. Sexual Violence

  • The Comptroller General of the US must submit a report within one year on the rate of sexual violence in the eastern Congo and adjoining countries;
5. Reports
  • After two years, the Comptroller General must report back to Congress on how effective these measures were and what challenges they posed.

Some comments:

  • It responds to the need express by both Laura Seay and Harrison Mitchell have argued on the comments section here that we need better governance and stronger institutions – in a best case scenario, the Act will result in investment in the Congolese regulatory institutions in the Kivus;
  • As Friends of the Congo have argued here, these are just Congress’ demands. How the SEC, State Department and the Comptroller General execute these requirements is a different matter altogether;
  • Most importantly: They only ask for companies to say what they have been doing to conduct due diligence – they don’t say at what point a company would be sanctioned (I guess the State Dept strategy should outline that) and what the consequences of trading in “conflict minerals” would be. In other words, we are likely to get an awful lot of information about what the supply chains look like, but there is no legal consequence to trading in conflict minerals;
  • A map that is updated once every 6 months will not be that useful – these arrangements need to be more flexible, as the situation on the ground can change very rapidly.
That is what my novice eye can make of the bill. If you want to have a look yourself, here it is (scroll all the way to the end).