Dodd-Frank conflict mineral provision takes heat at House subcommittee hearing

Gary Miller

Section 1502 of the Dodd-Frank Act, a provision intended to force firms to disclose the origin of minerals used in their products, was a target of criticism at a House subcommittee hearing on Thursday.

The House Subcommittee on International Monetary Policy and Trade hearing focused on the Democratic Republic of Congo, where violent militias often mine minerals found in many technological products in order to fund their operations, The Hill reports.

A late addition to the Dodd-Frank reform bill, the provision requires that companies determine whether any materials used in the production of their products were extracted from conflict-stricken areas, and if so, requires them to report to the Securities and Exchange Commission. The measure is part of a broader effort to end the resource curse — the tendency of areas rich in natural resources to have high incidences of corruption and violence.

Hearing participants attempted to find middle ground on a measure that seeks to limit human-rights abuses while noting the drawbacks of the provision.

“There is an atrocity occurring and nobody’s downplaying that, but does taxing American companies solve the problem in the [DRC]?” Rep. Gary Miller (R-Calif.) said, according to The Hill. “I question that.”

The subcommittee also listened to testimony about the atrocities committed in the DRC.

“Nothing is going to come in and be the silver bullet that fixes it,” Rep. Jim McDermott (D-Wash.), a leading proponent of the provision, said, The Hill reports. “The question is…does our continuing to put money into the Congo feed the war?”

Though some witnesses agreed that the measure would ultimately discourage firms from investing in minerals from war-torn regions, they also argued that doing so would financially impact those miners who rely on the work rather than the militias.

Mvemba Dizolele, a Congolese visiting fellow at Stanford University, said that the militias will still be able to function even after a crackdown on minerals, adding that concerned parties should take greater steps to combat the violence.

“Our activism is lackluster and devoid of moral courage in the face of the unnecessary suffering of the Congolese,” Dizolele said, according to The Hill. “We hedge our action and refuse to see the reality before us by covering our faces like little children.”

Most Reverend Nicolas Djomo Lola, a Catholic bishop from the DRC, said through a translator that most Congolese are financially dependent on farming and that mines are a primary source of revenue for the militias.

“The mines ‘employ’ a much smaller portion of the population and their working conditions violate their basic, God-given human dignity,” Lola said, The Hill reports. “If we can sever the link between the mines and the militias, we believe that we can curtail the violence and allow people to rebuild their communities and resolve the underlying causes of their conflicts.”

3 Responses to Dodd-Frank conflict mineral provision takes heat at House subcommittee hearing

  1. Pingback: Dodd-Frank conflict mineral provision takes heat at House subcommittee hearing « Dodd-Frank Section 1502

  2. Dodd-Frank is perhaps the worst tragedy perpetrated on Africa by the west in 100+ years.

    We are a Congolese owned and based mining company. We have been trying to export coltan for many tribes for almost two years now. No smelters are buying, not because of Dodd-Frank, which is merely a symptom, but because of the simplistic “African minerals are evil” narrative espoused by Enough Project and Global Witness. Every coltan smelter in the world tells us that because of that message, all centra-African coltan is considered radioactive, regardless of how good the paper work trail might be. They have no need to risk the public perception that they are supporting the militia. They can get the very same minerals from Australia, Brazil and a dozen other places without being marched on by ill-informed advocacy groups.

    And the bishop’s notion that removing the mineral revenue will curtail the violence is beyond naive. It is disingenuous. There is not a single militia that is there in order to get money from mining. They existed long before they found mining as ONE source of revenue. Approximately 20-40% of their revenue is from mining and if it was successfully curtailed, they would move on to a dozen other sources, even including restaurants they own. Should we attack all central African restaurants in general as bad, too?

    The bishop’s statement is wishful, not true. He wants farming to be the main source of income, but the fact the UN Panel of Experts say approximately 10 million people in the DR Congo get their living from mining. Because they can no longer sell their minerals, millions of them have move from abject poverty to utter destitution in the last two years of the “cell phones/minerals are evil” campaign. As a result the Congo has plummeted to the bottom and is now the #1 poorest nation on earth.

    How are the militia doing? The UN Panel of Experts say they see “significantly increased” smuggling by the militia. As with most well-intentioned attacks on symptoms instead of causes, the only ones benefiting from this focus on minerals instead of on militia, are the militia themselves.

    But the worst reason to demonize minerals instead of militia is the collateral damage it is causing throughout all of central Africa. The Congo is the size of everything east of the Mississippi, central Africa is the size of the United States, and the conflict area is the size of Vermont. It is also not even connected to the rest of the Congo by roads.

    Yet the “cell phones are evil” message has caused a de facto embargo throughout all of central Africa and has caused millions of innocent Africans to suffer in the faint hope that this naive message might catch a few militia in its path. But while the militia flourish, millions of innocents suffer. Dodd-Frank and the “minerals are evil” messages are nuclear options. It’s like dropping a nuclear bomb on Pakistan in the hopes of killing Osama bin Laden. No one would support that, but that is exactly what we’re doing in the Congo.

    And solution with such broad collateral damage is no solution at all. As the rational among us are promoting, we should focus on ridding the Congo of the rag-tag militias, not on cutting off just one of many revenue sources.

    The UN and the international community needs to grow a spine and rid the world of the militia, not of the minerals.

    Demonize criminals, not minerals.

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