The European Union’s new plan for restricting conflict minerals in global trade starts with good intentions, but basically ends there. The European Commission’s draft legislation, slated for implementation in 2015, aims to designate “responsible importers” that voluntarily keep their supply chains free of materials used to finance armed conflict, primarily sourced from the Democratic Republic of Congo, Angola and South Sudan. The plan covers four key minerals integral to electronic products like cellphones—tin, tantalum, tungsten and gold—through a “self-certification” scheme based on global ethical sourcing guidelines. But since it is not mandatory, and therefore only targets companies that voluntarily opt in, rights groups worry that the scheme would codify the trend of letting the fox guard the multinational henhouse.
And it’s a very small henhouse at that. The rules focus on European-based businesses dealing with raw materials, particularly smelters and refiners—and not companies that trade in imported, finished manufactured products that drive European consumer markets. Thus, as Euractiv reports, the program “will not apply to importers of products such as mobile phones, which may already have had the materials installed.” In other words, the dirty minerals can be present throughout the supply chain, but as long as the closest links are clean, corporate impunity will persist for the imported electronic gadgets bearing conflict-tainted metals in their circuitry.
In a statement issued earlier this month, a coalition of human rights groups warned that “the Commission’s proposal—an opt-in self-certification scheme available to a limited number of companies—is likely to have minimal impact on the way that the majority of European companies source natural resources.”
Advocates worry that under this weak certification system, European companies may simply start relying more on imports that enter European markets in a “cleaner” form. “Outsourcing might be a rampant way to deal with this proposal,” Michael Reckordt of the German NGO PowerShift eV (AK Rohstoffe) tells The Nation via e-mail. “Finished products made in Asia, Africa or Latin America are not part of the proposal,” and European consumers of these imports “will not know if [their purchase] supports child labour or human rights violations, or, in the worst case: is fueling a bloody conflict somewhere in the world.”
Click to enlarge (Courtesy: Conflict Minerals and their Supply Chains, Global Witness [PDF])
The political impetus for the EU initiative, ironically, comes from Washington—which often lags behind Europe in regulating big business—through a clause in the 2010 Dodd-Frank financial reform law. The law mandates that big firms listed on the US stock exchange disclose information on conflict minerals in their supply chains. The disclosure rules are based on the OECD’s official due diligence guidelines for Responsible Supply Chains. But unlike the US program, the EU’s plan does not impose mandatory disclosure, which, according to activists, renders it effectively toothless.
Since the 1990s, when Africa’s “conflict diamonds” erupted as a global scandal, the issue of “conflict trades” has expanded to cover various minerals linked to rights abuses in resource-rich areas from Burma to Colombia. The ubiquity of these materials in world markets provides a platform for campaigners to demand stronger policies for multinational accountability. Yet the most high-profile response so far has been led not so much by state regulators, but rather by image-conscious brands like Intel and Hewlett Packard, which have launched much-hyped voluntary auditing programs, in which they commission their own inspections of overseas smelters and supplier firms.
In the absence of a strong regulatory structure independent of business interests, the proliferation of self-certification schemes among tech firms reflects the honor-system model that many multinationals have used to boost their “corporate social responsibility” credentials: WalMart has commissioned rubber-stamp safety audits in Bangladesh sweatshops; Apple has partnered with a corporate-friendly third-party auditor to monitor labor conditions in its Chinese supplier factories. Still, the overarching structure of corporate power has thwarted political initiatives to impose regulatory strictures, leaving consumers with self-regulatory schemes that grassroots groups dismiss as glorified public-relations schemes.
In the response to the profits extracted from DR Congo, so far, the main program to curb the conflict diamond trade, the Kimberly Process, has been dismissed as a political failure, with member states failing to use sanctions to enforce trade rules.
With its new conflict minerals plan, critics fear the EU will again miss an opportunity to change industry practices through direct regulation. According to Nele Meyer, executive officer for social, economic and cultural rights at Amnesty International’s European Institutions Office, “The failure to implement due diligence procedures is largely due to companies’ perception that these standards are ‘voluntary’ despite their international significance and endorsement by [UN and EU member] States.”
The bottom line for advocates is that the role of government regulators is to mandate that corporations comply with global standards, not to have them “opt in” for a certificate of approval.
Original Article
Source: thenation.com/
Author: Michelle Chen
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