Subject: File No. S7-40-10
From: Judith Sargentini
Affiliation: Member of the European Parliament

November 17, 2011

concept Judith Sargentini MEP

Call for ambitious EU legislation against blood minerals

Why doesn't Europe stay up to speed with the USA to ban trade in conflict minerals? The European Commission should make sure that companies on European stock exchanges can no longer indirectly finance armed groups in conflict areas, writes Judith Sargentini

For more than a decade the deadliest conflict since World War II has plagued the Democratic Republic of the Congo (DCR). More than 5 million people have been killed since 1998, countless more have been displaced, atrocities like mass rape and other acts of brutal violence are the order of the day. What we should realize is that the trade in minerals plays a key role in fueling this conflict. Armed groups earn tens of millions of euros per year illegally from the trade of minerals such as coltan and tin, ending up in mobile phones and computers sold on the European market.

The promotion of peace and human rights are put forward as core aims in the Lisbon Treaty. To take action on this in a coherent way, we must make sure that companies and consumers on the European market can no longer indirectly finance armed groups in conflict areas with the products they produce and purchase. The United States is currently implementing the so called Dodd-Frank Act, focused on this point exactly. The uropean Commission can not stay behind, but must look critically in what way new legislation should be drafted.

US legislation
Remarkable in the Dodd-Frank Act in the USA is especially Section 1502, making companies accountable for their total supply chain. If a company uses tin, tantalum, tungsten or gold sourced from the DRC or an adjoining country somewhere in its production chain, all efforts must be undertaken to make sure the metals are not from a mine or source which is under control of armed groups. The new US legislation introduces mandatory reporting on this.

While the USA will launch the exact requirements for this mandatory reporting very soon, the European Commission seems to be still in the brainstorm phase. It is unclear when concrete proposals are to be expected. Through the grapevine I've understood that the Commission will propose legislation baptised a 'Dodd-Frank-plus' that is likely to focus only on disclosure of payments of companies to governments worldwide, but not on supply chain accountability. Although in the disclosure of payments good steps are made, this is only half of what the US conflict mineral legislation is about. The new EU legislation is called "Dodd-Frank-plus", but - if the previous is true - is rather going towards "Dodd-Frank-minus".

On top of this new EU legislation on conflict minerals should use lessons learned from the Kimberley Process for diamond certification schemes, an initiative I helped negotiating when still active in the NGO world. In the mean time it has become clear that the Kimberley definition of "conflict" has its limitations as it does not take into account violence of a government towards its citizens. A pressing example is diamonds mined under control by the Zimbabwean army that do have a seal of approval by the Kimberley Process. At the start of new EU regulation on conflict minerals we have the opportunity to include International Labour Organisation core labour standards and other human rights standards from the start, so that when conflicts have diminished in the future, we are not faced with misuse of the term "conflict free" minerals, which are not "human rights violations free".

End of 2010 the European Parliament adopted a resolution welcoming the adoption of the new US 'Conflict Minerals' Law and asked the Commission and the Council to examine a legislative initiative along these lines. European companies, such as Nokia and Shell, soon have to comply with the US conflict minerals legislation and are currently working around the clock to comply with the standards set by the US. Different legislation on conflict mineral reporting in different jurisdictions is not in the interest of European companies. The Commission should use the opportunity of companies getting ready for the US conflict mineral legislation to present an ambitious directive on conflict mineral reporting, including supply chain accountability. For this we cannot wait half a year or more. We must make sure that companies on European stock exchanges can no longer indirectly finance armed groups in conflict areas. The clock is ticking.

Judith Sargentini is Member of the European Parliament for the Greens / EFA.

(Attached File #1: s74010-413.pdf)