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Wednesday, 19 April 2017 05:58

Corporations Will No Longer Have to Disclose Use of Bloody Conflict Minerals

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SEC22SEC let corporations off the hook for using conflict minerals. (Image: Wikipedia)

Since April 7, the Securities and Exchange Commission (SEC) has no longer required corporations to publicly disclose the use of conflict minerals in their products. Reuters explained the action:

The conflict minerals rule was required by the 2010 Dodd-Frank Wall Street reform law and is supported by human rights groups that want companies to tell investors if their products contain tantalum, tin, gold or tungsten mined from the Democratic Republic of Congo (DR Congo), in the hope that such disclosures will curb funding to armed groups.

Business groups have contended that it forces companies to furnish politically charged information that is irrelevant to making investment decisions and that it costs too much for companies to trace the source of minerals through the supply chain.

The National Center for Policy Analysis, a pro-business "free market" think tank, was thrilled that companies and shareholders will no longer have to reveal the use of blood-stained minerals to shareholders and the public. In an April 12 news release, the center proclaimed:

The tireless work of the National Center for Policy Analysis and Senior Fellow Dr. David Grantham paid off last week when the U.S. Securities and Exchange Commission agreed not to enforce the problematic conflict minerals provision tucked deep inside the Dodd-Frank Wall Street Reform and Consumer Protection Act. This decision falls in line with recommendations made by Dr. Grantham dating back to November 2015.

"Conflict minerals have nothing to with financial reform and did not address Wall Street or the financial crisis," says Grantham. "Instead, the provision imposed costly regulations on producers and manufacturers and proved disastrous for the Congolese people."

The BBC provides background on a war that has only officially ended, but is still being fought among the Congolese army and rebel factions in many mineral-rich areas, particularly the eastern section of the Congo:

The Democratic Republic of Congo is slowly recovering from a conflict known as Africa's first world war, which led to the loss of some five million lives between 1994 and 2003, but many eastern areas are still plagued by violence as various rebel groups continue to operate there....

DR Congo is extremely wealthy - and extremely big. Similar in size to Western Europe, it is rich in diamonds, gold, copper, cobalt and zinc.

The country also has supplies of coltan, which is used in mobile phones and other electronic gadgets, and cassiterite, used in food packaging....

The natural riches have attracted rapacious adventurers, unscrupulous corporations, vicious warlords and corrupt governments, and divided the population between competing ethnic groups.

Corporations that buy conflict minerals from rebel sources are, in effect, financing ongoing bloodshed. However, pro-business advocates are only beholden to eliminating any accountability that might limit their access to the rich Congolese supply of minerals.

John F. Calvelli, executive vice president for public affairs at the Wildlife Conservation Society, recently wrote a commentary for The Hill in which he called on the SEC to continue requiring transparency from companies, regarding conflict minerals:

There are armed militia groups present in those same parts of DRC [where there are precious metals and coveted minerals] and other countries that exploit these resources to finance their criminal enterprises. These groups are often engaged in a variety of human rights violations, including forced child labor and other atrocities. They flout the rule of law in DRC and endanger the lives of its citizens. Yet the fruits of these illicit mines often make their way into the western supply chains; these are called conflict minerals....

The United States has a vested interest in making sure minerals are mined conflict-free. Unregulated mines run by armed militias undermine stability and governance in DRC and, perversely, make it harder for U.S. businesses to invest, causing harm to American economic and national security.

The Congolese government has spoken out against the potential reversal of this rule as it would jeopardize the country's security and stability. Cracking down on conflict mines will strengthen the rule of law and help stop violence against millions of people and destruction caused by armed groups.

Corporations were opposed to the former SEC rule because they don't want to cut off the supply line of conflict minerals, regardless of shareholder and public pressure. It's all about the bottom line, despite the ongoing bloodshed in the Congo -- bloodshed that these companies are helping to finance every day.