US trade group attacks conflict minerals rule

Two US business organisations are seeking to overturn a law compelling companies to disclose their use of conflict minerals.

The rule was adopted by the Securities & Exchange Commission after its addition in August to the 2010 Dodd-Frank Wall Street Reform & Consumer Protection Act.

This application, to modify or scrap it the rule, was submitted by the US Chamber of Commerce and the National Association of Manufacturers (NAM), and follows a lawsuit by the chamber and the American Petroleum Institute to remove transparency requirements over facilitation payments (EP, November 2012, p1).

The conflict materials rule was issued in August to prevent rebels and militias in the east of the Democratic Republic of Congo (DRC) from selling tin, tantalum, tungsten and gold – minerals commonly used in electronic devices – to finance their activities.

It requires thousands of companies to make reasonable efforts to discover whether those materials originate from the DRC or a neighbouring country.

But the applicants say: “The final conflict mineral rule imposes an unworkable, overly broad and burdensome system that will undermine jobs and growth and may not achieve Congress’s overall objectives.”

Their critics accuse these bodies of helping companies dodge the legal requirement to reveal what happens in their supply chains and report the impacts of their use of the minerals on people in the DRC.

Patrick Alley, the director of international NGO Global Witness, which campaigns against natural resource-related wars and corruption, said: “This is a blatant attempt to undermine the democratic process by a group of self-interested and irresponsible companies, and the Court of Appeals should strike it down without delay.

“If the companies behind this were remotely honest, they would admit their primary interest is being allowed to continue making money at the expense of Congolese citizens.”
 
Alley challenges the businesses concerned to drop their anonymity. He says: “The companies financing this action that the chamber and NAM are fronting should have the courage to say who they are.

“If they really thought this was a case of unwarranted regulation that costs jobs, why wouldn’t they publicly identify themselves with such a noble cause? Why the need to hide behind corporate lobby groups?”

The latest hostilities in the DRC have been triggered by a new rebellion called the M23, led by an indicted alleged war criminal, Bosco Ntaganda, and backed by the Rwandan government.

Ntaganda is said to be a career warlord who made a fortune trading in conflict minerals in the years before the latest hostilities. The UN says the M23 has received additional financial backing from minerals traders in Rwanda.

Humanitarian groups and the US government protest that the conflict has led to horrific human rights violations and displaced nearly half a million people.

The chamber’s application is due to be heard in the District of Columbia Court of Appeals.