Economics and Peace

VIOLENCE AND CELL PHONES?

Aren’t cell phones great?  Today’s electronics and other products have wonderful capabilities, but also require some fairly rare components to accomplish what they do.  Certain minerals such as cobalt, tungsten, tantalum and others are not as abundant around the world as iron, copper, or lead, but they are vital to some functions of electronics.  African countries actually have an abundance of some of these rather valuable minerals.

Unfortunately, a situation like the “conflict diamonds” dilemma also affects the extraction of these minerals.  They too become “conflict minerals” when they are informally mined in areas which are controlled by militias, rebels, or warlords.  The profits from sale of these valuable resources then go to buy guns, military equipment, and supplies to keep these fighters in operation.  Often this means violence for the local population—robbery, destruction, enslavement, rape, killings.  Turmoil and civil conflict continues for years or decades, in part fueled by the minerals that are sourced in the conflict area, and ultimately made into products purchased by Americans and others.  The militias’ need for the mineral profits also encourages so-called “artisanal mining” practices that can be dangerous or deadly.  This type of mining involves at times forced labor or child labor, as well as a disregard for environmental destruction, bringing more health hazards.

A major place where this situation occurs is Africa’s Great Lakes region, principally in the Democratic Republic of the Congo (DRC) and neighboring countries.  The DRC has seen continual violent conflict in some regions for twenty years or more.  One estimate is that five million people have died due to the fighting and the disruption (famine and disease) attributable to it.  Some of these regions, especially eastern DRC, are rich in rare minerals which are exploited by armed groups.

In 2010, in response to public awareness and pressure, the U.S. adopted a provision of the Dodd-Frank Act called Section 1502.  This is similar to the Section 1504 described in the previous post here on our S.M.A. website.  As with that provision, there are signs that Section 1502 might soon be abolished or at least remain unimplemented.  This Section calls for U.S. companies to assess annually the sources and supply chain of the minerals they are acquiring and the connections to any armed groups that commit human rights abuses.  The minerals involved include tin, tungsten, tantalum, and gold.  The “conflict areas” are those on special maps determined in a separate process.  Companies fulfilling the regulations may declare certain minerals they acquire as “conflict-free.”  The assessment data is to appear on the companies’ websites for all to see.  On a regular basis, certain reports are also to be made to Congressional committees by U.S. agencies, on the progress of regulating conflict minerals and the situation in Africa.

It has taken a long time for the agency charged with implementing this part of the Act, the Securities and Exchange Commission, to produce detailed regulations.  Before it did so, there was a lawsuit in 2012 by the U.S. Chamber of Commerce, the National Association of Manufacturers, and the Business Roundtable, to stop implementation of some of Section 1502.  These parties objected on the basis that the regulations would be unfairly burdensome and expensive for U.S. businesses, as well as ineffective.  Many prominent major U.S. companies are part of these coalitions.  This lawsuit has wound its way through different courts.

Another factor on this topic of conflict minerals is also to be considered:  It is true that great care must be taken not to shut down a local industry which is providing some income to very poor people.  In many cases, the valuable minerals in Africa are giving at least a little benefit to people who have few options.  By hard and dangerous work, artisanal miners (including women and children) produce mineral ore for sale to middlemen.  The middlemen buy and export the materials to industrialized countries for refinement and manufacture into usable forms, and ultimately into consumer products.  These miners and their communities receive a very small pittance compared to the value of the minerals as they move up the chain of production.  Each final cell phone or computer, containing just a tiny amount of the mineral, brings hundreds of dollars to the manufacturer and retailer.   But to cut off the supply completely would harm the miners and their dependents by leaving them in worse poverty.

Advocates for peace and improved living conditions in the Great Lakes region of Africa urge that Section 1502 of the Dodd-Frank Act not be abandoned, but rather be implemented.   Efforts to hinder the unregulated use of minerals from conflict areas are worthwhile in human lives saved and suffering alleviated.  The “conflict diamonds” campaign did a great deal of good twenty years ago, and it is right to apply similar efforts for transparency to other “conflict minerals.”  It is true that care must be taken not to deprive legitimate “artisanal miners” of livelihood, and local populations of the benefit of their own resources.  But the chaotic and violent situation in D.R. Congo and indeed in the Great Lakes region makes that situation unusual.  U.S. consumers are very interested in purchasing products which they can be confident are produced without promoting violence.  The best way to have that assurance is for open information to be available to all from the companies buying resources at the source.  The SEC rule in Section 1502 is an effort toward that.  It has already had an effect on hindering armed conflicts funded by mineral extraction.  It is very possible to maintain such a restriction without destroying a legitimate industry.

On March 6, 2017, it was reported that Apple Corporation is continuing its efforts to source cobalt from Africa in a responsible way without permanently shutting down a local industry.  While this was an effort to address child labor, rather than conflict connections, it shows that an industry seeking to do business with a larger perspective can cooperate with regulations and with public concerns.

The argument that “if we do not get free access to minerals, other unscrupulous countries will do so” is not moral or economically beneficial in the long run, because it promotes the proliferation of violent groups and of vicious labor practices.  The Conflict Minerals Rule is a valuable tool for furthering peace in a region that has suffered decades of turmoil and suffering.  The least we can do is to have implementation of this Section 1502.

For further information:

https://www.sec.gov/about/laws/wallstreetreform-cpa.pdf

(the Dodd-Frank Act; page 838 begins Section 1502)

https://www.globalwitness.org/en/campaigns/conflict-minerals/dodd-frank-act/

http://afjn.org/dr-congo-conflict-minerals-afjn-submits-a-statement-for-the-record-to-us-house-subcommittee-on-international-monetary-policy-and-trade/

https://org.salsalabs.com/o/1552/images/Dodd-Frank%20Investor%20Statement%202013.pdf

https://www.washingtonpost.com/news/the-switch/wp/2017/03/03/apple-cracks-down-further-on-cobalt-supplier-in-congo-as-child-labor-persists/

http://www.pacweb.org/en/conflict-minerals

http://www.un.org/ga/search/view_doc.asp?symbol=S/2016/46

https://www.amnestyusa.org/sites/default/files/this_what_we_die_for_-_report.pdf

What can I do?  To consider advocacy actions:

http://enoughproject.org/content/tell-sec-keep-us-conflict-minerals-rule-intact

http://blog.amnestyusa.org/africa/what-does-your-cell-phone-have-to-do-with-armed-conflict/

http://www.sourcingnetwork.org/blog/2016/12/23/peace-on-earth-support-conflict-free-efforts-this-holiday-se.html

http://www.sourcingnetwork.org/mining-the-disclosures

 

 

Wolframite Mining Photo bt Julien Harneis
Wolframite Mining in Kailo, DRC. Photo by Julien Harneis, Goma, DRC. (Wikimedia Commons)

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