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Dark Side Last Updated: Apr 2, 2014 - 8:50:03 AM


How Conflict Minerals Funded a War that Killed Millions
By Nick Heath, Tech News 1/4/14
Apr 2, 2014 - 8:46:19 AM

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"The conditions were inhuman. The armed groups saw themselves as outside the law -- no one could control them."

Axel Mutia Mburano is describing life in a mine in the Walikale region of the Democratic Republic of Congo (DRC), a central African country gripped by conflicts that have killed more than 5.4 million people since 1998.

The money that helped prolong the suffering of Mburano and his countrymen flowed from the likes of you, me, and just about anyone else who bought a PC, phone, or electronic gadget in recent memory.

Inside many of these electronic devices are components that began life as minerals dug at gunpoint from mines in the DRC.

SEE: Photos: The dangerous work of conflict mineral mining in the Congo
'There were no rules'

Mburano's story reflects the misery that war and mineral wealth has brought to the DRC. At the mine he worked alongside about 15,000 others, digging for the mineral cassiterite and panning for gold in a nearby river. But after an armed militia seized control of the mine in 2008, working conditions descended into what Mburano describes as "slavery."

"Sometimes people worked 24 hours out of 24, night and day, using head-mounted lamps -- one team working days and one doing nights. At the time there were no rules, and sometimes miners died of fatigue. There were also deaths because the pits were deep and there was flooding," said Mburano.

"We were in a really isolated quarry that made transporting the minerals to the Walikale distribution centre very hard. It was more than 50-km away, so the minerals had to be carried on men's backs -- and even women and children were used, too.

"The armed groups saw themselves as being outside the law, so there were a lot of thefts and sometimes rapes because no one could control them."

Countless Congolese have endured similar hardships to Mburano in mines across Eastern DRC. Their suffering has been at the hands of Hutu and Tutsi fighters, and corrupt officers within the Congolese army, who have seen the mines as a way of funding the armed conflict that has raged sporadically in the country since 1998.

The minerals from the DRC's mines have changed hands innumerable times on their journey to our PCs and phones. After being dug up in central Africa the minerals travel through a long and snaking chain of suppliers, travelling to Asia and elsewhere to be smelted into metals and then onto the wider world where they end up in electronics, as well in vehicles and jewellery.

The complexity and length of that supply chain is such that for years electronics firms claimed it was opaque, that determining whether their products were perpetuating a cycle of killings and rape in the DRC was an insurmountable task, both financially and logistically.

Today attitudes are changing as companies prepare to face up to the requirements of new legislation requiring them to track these minerals right back to the mine they were dug.

Companies registered with the US Securities and Exchange Commission (SEC) will have to disclose the use of conflict minerals sourced from the DRC or its neighbouring countries in their products under section 1502 of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act (PDF). Companies must file their first reports with the SEC by the end of May 2014.

Inside many of these electronic devices are components that began life as minerals dug at gunpoint from mines in the DRC.

If firms find that the minerals do originate from the DRC or an adjoining country, they are required to report on their efforts to determine the mine or location of origin to ensure that armed groups are not benefiting from the trade of these minerals.

By shining a spotlight on electronics manufacturers' supply chains, legislators are hoping to pressure companies to invest in removing conflict minerals from their products.

But while major US-registered electronics firms are outwardly pledging to end the use of conflict minerals some of these same firms belong to industry associations that are seeking to water down the disclosure requirements under Dodd-Frank.

The U.S. Chamber of Commerce, the Business Roundtable, and the National Association of Manufacturers have mounted a legal challenge to the obligations, which is being considered by the U.S. Court of Appeals.

The group is seeking to overturn the disclosure requirement and have it rewritten in a less strict form. They argue that it imposes too many costs, goes beyond congressional intent, and violates First Amendment freedoms by forcing companies to condemn their own products. The challenge won some sympathy with one of the judges at a hearing in January 2014, who raised the prospect of the requirement creating a "slippery slope problem" in relation to US companies having to disclose the conditions under which their products are manufactured overseas. The judges have yet to indicate when they will make a ruling on the challenge.

Some electronics manufacturers, such as Microsoft and Motorola, have distanced themselves from this legal challenge.

The European Commission is also considering implementing a voluntary scheme under which European Union (EU)-registered smelters selling materials derived from minerals from the DRC and other conflict zones worldwide could be certified as conflict-free. The proposal has been attacked as "weak," and a disappointment to campaigners who found the majority of EU companies not required to comply with Dodd-Frank have done minimal work to remove conflict minerals from their supply chain.

Download this article as a PDF (free registration required)
Cleaning up the tech industry

The three main conflict minerals are cassiterite, Coltan, and wolframite, sometimes referred to under the acronym 3T, a reference to the tin, tantalum, and tungsten metals derived from them. The fourth conflict material is gold.

The majority of US-registered computer component and PC manufacturers are currently attempting to document their supply chains and remove conflict minerals via the Conflict-Free Smelter Program (CFSP). The programme is run by the Electronic Industry Citizenship Coalition, an electronics industry body that works to make supply chains more socially, environmentally, and economically friendly, and the Global e-Sustainability Initiative (GeSI).

Major electronics firms among the more than 120 companies participating in the CFSP include:

AMD
Apple
Dell
HP
Intel
Microsoft
Nokia

Many of the large electronics firms are also engaged in their own private efforts to clean up their supply chains. Although progress varies, Intel made headlines when it pledged that no conflict minerals will be used to manufacture its microprocessors as of January 2014. The company travelled more than 250,000 miles to visit more than 80 smelters in 21 countries to verify its microprocessor supply chain is conflict free, and is working with partners in the CFSP.

Under the CFSP, which is part of the wider Conflict-Free Sourcing Initiative (CFSI), a whitelist is being built of smelters and refiners that don't use conflict minerals, as determined by third-party auditors.

To date more than 70 smelters have been listed as conflict-free under the CFSP, providing computer makers with a source of metals that isn't perpetuating abuses by armed groups in central Africa. Smelters are assessed against the OECD Due Diligence Guidelines for Responsible Supply Chains of Minerals (PDF), which provides recommendations for how companies can respect human rights and avoid contributing to conflict when sourcing minerals.

The CFSI has validated smelters for all four metals derived from conflict minerals -- tantalum, tin, tungsten, and gold -- as being conflict-free.




This graph shows each company's progress towards responsibly sourcing minerals in their supply chain.
Image: Enough Project

Unsurprisingly, the CFSI -- and schemes run by jewellery and gold bullions trade groups -- has limitations, which means it isn't a silver bullet when it comes to severing the decades old link between the western consumer goods and the central African mines where abuses are perpetrated.

At present there simply aren't enough of these conflict-free smelters to meet the needs of the world's biggest computer makers. Even HP, the world's largest server maker, and a firm that was rated as having made the second most progress of any electronics manufacturer in the world by the Enough Project in 2012 (PDF), said that of the just over 200 smelters it deals with only about 60 are certified as conflict-free. And of these 60 conflict-free smelters, only four or five source minerals from inside the DRC.

Apple revealed similar figures (PDF) earlier in 2014. It has verified 59 smelters in its supply chain as conflict-free, but 104 of its smelters use minerals whose origins are unknown.
Boycotting one of the world's poorest countries

Because of the lack of mines within the DRC certified as being conflict-free, some smelters have stopped sourcing minerals from the DRC and its adjoining countries in order to gain a conflict-free status.

This de facto boycott limits the DRC's ability to sell its trillions of dollars worth of untapped mineral wealth, in a country ranked by the UN as one of the poorest in the world, with the average annual income per person just $286 in 2012.

The conflict-free smelters and refiners used by electronics firms under the CFSP only source about 10% of 3T metals from inside the DRC and 15% from its neighbouring countries.

Stopping sourcing minerals from the DRC and its neighbouring countries will kill what could be a valuable part of these countries' economies, say activists.

http://www.youtube.com/watch?v=jeSRwkbdXCg&feature=player_embedded

"The biggest loophole in our view is that many companies are moving to withdraw from the DRC and that is not what we want to see companies doing. What we would like to see companies doing is to stay in the region and try to do their best to influence it in a positive way," said Gisela ten Kate who wrote a report into the use of conflict minerals by European companies for the pressure group SOMO.

"The armed groups saw themselves as being outside the law, so there were a lot of thefts and sometimes rapes because no one could control them." Axel Mutia Mburano, DRC Miner

After the Dodd-Frank Act was signed into US federal law in 2010, demand for 3T minerals from Congolese mines slowed right down, according to Fidel Bafilemba, who works as a field researcher for the anti-genocide group Enough Project and is based in Goma in the DRC.

"Soon after, there was a pull out by the companies because they were unable to substantiate whether their minerals were conflict-free or not," he said.

"Eastern Congo suffered a de facto embargo."

Left without much of a western market to sell into, Bafilemba said Congolese mines have instead been selling minerals to smelters that were not seeking to be whitelisted under the CFSP, which he said commonly sell to non-SEC registered Chinese firms.

"Since the pull out of the electronics companies there has been a tremendous surge by the Congolese government and local mining companies seeking an alternative market with the Chinese," he said.

The price that these smelters are willing to to pay for minerals varies but is generally far lower than what miners were previously receiving. In the case of the tin ore cassiterite, it's roughly one third of what miners were receiving previously, he said. In 2013 tantalum ore Coltan from the North Kivu region was reported to be selling for one tenth the price it fetched in the early 2000s


Source:Ocnus.net 2014

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