The Securities and Exchange Commission (SEC), a U.S. financial oversight body, has developed the first draft of reporting requirements for companies covered by the U.S. legislation on Congo's conflict minerals.
Tin, tungsten, tantalum, and gold are essential to the performance of our SMART technology used in cell phones, laptops, digital cameras and other high-end consumer electronics. These minerals are sourced from eastern Congo, home to the deadliest conflict in the world since World War II. Over 5 million people have died, and rape is epidemic. The armed militias and soldiers committing atrocities in Congo make hundreds of millions of dollars per year on the illicit trade in Congo’s minerals.
Congress took a major step forward last year by passing conflict minerals provisions in the Wall Street Reform Act that will require all manufacturing companies that source tin, tungsten, tantalum and gold to find out where they get their minerals from and to audit their supply chains to ensure they are not benefiting armed groups in Congo.
Thanks to public action the proposed regulations incorporate points that we feel are essential to curbing the illicit trade in conflict minerals and ensuring our purchases do not contribute to a deadly war. But companies are actively calling for these rules to be watered down easing the reporting requirements placed on them, for example jewelry companies are asking for an exemption from the requirements all together. These draft regulations are open for public comments until March 2nd, after which time they will be finalized as law. (A group of activists will print out and hand deliver the petition to the commissioners in mid-February, so the petition will close on February 18.)
A few months ago activists delivered over two thousand signatures and comments to the SEC to voice how important it is for the legislation to deliver on its purpose: clean, transparent supply chains that facilitate a mining sector in Congo that benefits its people - and your voices were heard! Now as we enter the final stretch we need you to lend your voices once again to ensure the final rules remain strong.
As you work to finalize these regulations we write to ask you to ensure the following essential points remain included in the final rules so that consumers can be confident that companies are conducting thorough checks and accurately disclosing critical information to the public about their supply chains:
1. Supply chain checks by companies that are specific and verified. It is critical that the SEC specifically lay out the “Due Diligence” steps that companies take to check their supply chains. If a company does not source from Congo, it should issue a detailed third-party audit report saying how it verified that information. If a company does source from Congo, it should specifically report on the capacity of each mine it sources from, along with the weights and dates of individual mineral shipments and the taxes paid to the government or armed groups. This report should be independently audited and all information should be available to the public. “Business confidentiality” is a valid argument for not disclosing the price paid for minerals, but not for this information; it is essential to curb smuggling and does not harm companies’ competitive interests.
2. Equal reporting standards for all four minerals. While the 3 Ts (tin, tungsten, tantalum) and gold are unique, different reporting standards only weaken the regulations and create the possibility of loopholes. Furthermore, numerous companies from the electronics to jewelry industries have confirmed that it is reasonable and possible to secure disclosure on each of these supply chains.
3. All manufacturing companies must be included. Within the legislation passed, Congress intended for all manufacturing companies which use minerals in their products, regardless of how small the percentage or what label they manufacture under to be required to trace and disclose information on their supply chains. This intention must be delivered on through comprehensive regulations.
It is vitally important that companies at minimum undertake the steps above to ensure transparency in the minerals supply chain. As consumers and investors, we believe these steps, most of which already have the support of the United Nations Security Council and the Organization for Economic Cooperation and Development, are the only way to ensure a transparent system that will give consumers and investors the choice not to support violent conflict in eastern Congo.