Painting by Cheri Samba

Lokuta eyaka na ascenseur, kasi vérité eyei na escalier mpe ekomi. Lies come up in the elevator; the truth takes the stairs but gets here eventually. - Koffi Olomide

Ésthetique eboma vélo. Aesthetics will kill a bicycle. - Felix Wazekwa

Sunday, November 14, 2010

Congressional staffer gives details about "conflict minerals" legislation

I was on a panel on Friday on conflict minerals, which was very instructive. Toby Whitney, the legislative director of Congressman Jim McDermott, was there - McDermott was one of the main sponsors of the "Congo conflict minerals" bill signed into law by President Obama in June this year.

I learned a few things.

First, and most importantly, there had been some debate among experts about the exact provisions of the bill. Toby clarified: The bill does not prohibit companies from buying conflict minerals. Instead, it requires them to carry out due diligence on their supply chain and to report back to the Securities and Exchange Commission what measures they have taken to find out whether they are importing minerals that fuel conflict in the Congo. "It's a name-and-shame bill," Toby said. There will only be fines for companies that do not do good reporting and auditing. Companies that carry out all the correct due diligence and report back to the SEC that they are indeed importing conflict minerals will not be fined.

Hence the importance of pressure from NGOs, press and private citizens. Since all these reports have to by law made public by the companies, the cost for the company will be reputational. For example, we are already asking Yale University to make clear to the companies it invests in that it will not keep them in its portfolio if (a) they do not carry out all the due diligence required by Section 1502 of the Dodd-Frank bill; and (b) if they do indeed buy minerals that fuel conflict in the Congo. Since Yale has a $17 billion endowment and is seen as a leader in investments, a policy statement could be important.

Secondly, Whitney bemoaned the departure from Congress of some of the congressional leaders on humanitarian issues. Russ Feingold (D-Wisconsin) was beaten by a Tea Party conservative, and Sam Brownback (R-Kansas) resigned from the senate to become governor of Kansas. Both had traveled repeatedly to Central Africa and, whatever we may think about their other political views, had promoted numerous bills and spending on humanitarian issues.

Lastly, Whitney detailed the resistance that had come up against the conflict minerals bill. Like many other congressional staffers, he reported the intense corporate lobbying against the bill. In the end, he said, they had won out because it was difficult for a company to be seen as in support of rape in the Congo


Champ said...

Hello Jason
Do you know if Yale is vested in AngloGold Ashanti, whose largest investor is American John Paulson of Paulson and Company? AngloGold is one of the companies identified by Human Rights Watch and UN Reports as having fueled the Congo through illegal exploitation of Congo's resources and supporting of rebels in Eastern Congo. Also, is Yale vested in any of the other 85 or so companies named in the UN Reports (2001 - 2003) and which the UN Mapping Report says that the Congolese people are entitled to reparations from? It would seem strange if Yale and other universities were to divest from electronics companies that may be sourcing minerals from the Congo and not doing anything regarding mining companies that have been identified as either illegally exploiting Congo's riches or been party to odious contracts.

Please let us know! Thanks

Sphex said...

Canada may have had a bill proposition looking somewhat like the American one. It was defeated (140 vs 134) on October 28th.

Champ said...


Thank you for sharing this. Bill C-300 out of Canada is nothing like the American bill if you are referring to the one that speaks to conflict minerals. The American conflict mineral bill stays away from mining companies while the Canadian bill calls for accountability of its mining companies. However, the less spoken of extractive industries transparency amendment to the Dodd-Frank Financial Reform bill speaks to mining companies by requiring them to report any transaction over $100K with a foreign government in an attempt to add transparency to an otherwise shadowy enterprise.

What has been strange regarding the American scene is the lack of focus on the mining companies by the American government and most American advocates. There is no daylight between the American government and her advocates when it comes to the destructive practices of American mining companies in the Congo. They are equally silent. It is for this reason I posed the question above to Jason regarding the Yale effort. It says nothing of the mining companies that have been systematically raping and pillaging the Congo over the past 14 years.

Jason Stearns said...


You point out a good issue regarding the lack of follow-up on the 2000-2002 UN reports on the illegal exploitation of natural resources in the Congo. A bunch of companies were named, but next to nothing was ever done about this.

However, to a certain extent these are different issues and we are trying to focus Yale Corp's attention on the mineral trade in the Kivus. AngloGold Ashanti, for all of its abuses in Ituri documented by HRW, is not linked conflict in the Kivus. We could have asked Yale to divest from companies such as Afrimex, which was also criticized in those UN reports - but they are not publicly listed, I think, and are very small fish. The logic of due diligence is to make the end users responsible - Apple, Intel, etc. - for their supply chains. The first step in this will not be divestment, but making sure these companies actually do carry out the required due diligence.

Champ said...


I think you actually put your finger on an issue - the piecemeal manner in which advocacy has been done around the Congo. The due diligence certainly is not just for the Kivus and the instability is a result of the lack of accountability and impunity that exists across the board and it would be a bizarre situation if Yale is calling on the tech companies to do due diligence on their supply chain without doing its own due diligence to make sure it is not vested in a company that has been a participant in fueling the very conflict that Yale is trying to address. Also, Anglo/Rangold just displaced 15,000 Congolese but that may be a separate issue too.

The October UN Mapping Report clearly puts front and center the need for accountability. BTW, Banro is in the Kivus and is publicly traded. Yale may consider checking to see if they are vested in Banro. Nothing should stop them from checking their portfolio right? They do not have to divest but what statement would it send if Yale were to say by the way, we have done our own due diligence on our investments to find out if we are vested in any of the companies that have been identified by the UN has having played a role in fueling the conflict over the past 14 years. It would certainly serve as a model for how institutions of higher learning can be accountable.

Abigail Long said...

Hi Jason,

Thank you for this helpful post. I'm very interested in seeing the transcript from this event if one has been made available.

Thanks again,

Abigail Long

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