European Union officials have agreed on a regulatory framework regarding “conflict minerals” and the responsible sourcing of source tin, tantalum, tungsten and gold. Global efforts have sought to reduce the financing of armed militias that trade in those minerals.
"This political understanding on conflict minerals will help trade to work for peace and prosperity, in communities and areas around the globe affected by armed conflict", said EU Commissioner for Trade Cecilia Malmström.
The EU approach will build upon the OECD Due Diligence Guidance for responsible mineral sourcing and includes obligations for the "upstream" part of the conflict minerals supply chain, including smelters and refiners. The vast majority of metals and minerals imported to the EU will be covered, while exempting small volume importers from these obligations, a statement issed by EU institutions says. The European Commission will also carry out a number of other measures, including the development of reporting tools, to further improve supply chain due diligence by companies that use these metals and minerals as components in goods. The preliminary agreement will now require months of technical work before it can be implemented as EU law. Two years after it is completed, there will be an effectiveness review that could broaden the reach of the regulations.
While the framework requires smelters and refiners to confirm the geographical source of raw minerals, imports of “downstream” finished products are exempt. Small-volume importers are also excluded.
The EU rules cover conflict minerals that are sourced from anywhere in the world, a broader scope than the United State’s Dodd-Frank Act and a rule that focuses exclusively on the Democratic Republic of the Congo.
Activists, notably Amnesty International and Global Witness, are critical of the plan, in particular the focus on upstream entities and exclusion for smaller importers.
“Today’s decision leaves companies that import minerals in their products entirely off the hook. It’s a half-hearted attempt to tackle the trade in conflict minerals which will only hold companies importing the raw materials to basic checks,” says Iverna McGowan, head of Amnesty International’s European Institutions Office. “The EU has international obligations to protect human rights, but went only half way to meet them. EU investors and consumers still won’t have any certainty that the companies they deal with are behaving responsibly.”
“With EU laws now falling behind those in other countries, the EU is rapidly becoming the weak link in the mineral supply chain,” said Michael Gibb of Global Witness “While this is an important step, the EU should have gone much further to make full use of a unique opportunity to make a real difference.”
A joint statement by the two groups, prior to the EU announcement blamed an “intense lobbying by big business risks” for “watering down the law into a proposal that would do little to tackle a trade that funds conflict in parts of Africa and elsewhere.”
“If the proposal is not amended, only about 20 raw mineral importers would be legally required to source their materials responsibly,” the groups claim. “European businesses that sell and make products containing those minerals would only be covered by a voluntary system.”