EU agrees mandatory law on conflict minerals

Published by MAC on 2016-11-26
Source: Statement, Reuters, Euractiv.fr

... but exemptions cause concern

EU: Conflict Minerals agreement reached as exemptions added

Joint press release

22 November 2016

The European Union (EU) has today taken a positive, but half-hearted, step towards cleaning up Europe’s trade in minerals. EU legislators concluded their negotiations on a new law on so-called ‘conflict minerals’—a Regulation which is meant to ensure that minerals entering the EU do not finance conflict or human rights violations. Certain EU companies will, for the first time, be legally required to take responsibility for their mineral supply chains and to take steps to prevent their trade being linked to conflict or human rights abuses. However, a string of concessions and last-minute loopholes could undermine the Regulation’s impact, as they exempt a large number of companies from the law. Civil society organisations, including Amnesty International and Global Witness, are today calling on the EU and its Member States to show that they are serious about making sure these exemptions do not undermine the Regulation’s stated aims.

“This Regulation is a welcome step forward,” said Michael Gibb of Global Witness. “But while the EU has sent a strong signal to a small group of companies, it has ultimately trusted that many more will continue to regulate themselves. It is now up to these companies to show that this trust is well-placed and well-earned; and we expect our lawmakers to act if it is not.”

The EU is a major destination for minerals, both as a market for raw materials and the everyday products that contain them, from laptops and mobile phones to engines and jewellery.

The Regulation will cover EU imports of minerals tin, tungsten, tantalum and gold from all countries in the world, and is the first mandatory law of this kind to be truly global in its scope. But while global standards on the minerals trade require all companies to check their supply chains for conflict financing or human rights violations, the EU’s mandatory provisions will cover only a small part of the supply chain. In defiance of the European Parliament’s more ambitious proposal in May 2015, only companies that import minerals in their raw forms—as ores and metals—will be covered. Companies that bring the very same minerals into the EU inside components or finished products are let off the hook. Late in negotiations EU Member States also successfully pushed for the inclusion of a series of import thresholds that will further reduce the number of companies required to comply.

“These volume thresholds, that exempt companies from complying with legislation, are dangerous loopholes,” said Nele Meyer at Amnesty International. “They could let minerals worth millions of Euros enter the EU free of any scrutiny—often those with the highest risk of being linked to conflict. This new law can only be the very first step forward. Additional measures will be needed to ensure that all companies will and can adequately check their supply chains.”

Even companies required to comply with the Regulation have been offered shortcuts. The European Commission has agreed to accredit private industry bodies to which companies have increasingly sought to outsource their obligations to check their supply chains. Members of accredited industry bodies will benefit from limited oversight. In addition, companies will be encouraged to source from a list of “responsible” smelters and refiners, despite few mechanisms being put in place to actually assess the behaviour of all smelters and refiners on the list.

The Regulation will not come into force immediately, with legislators opting instead to insert a lengthy phase-in period.

“Talk of a phase-in is a red herring. The Regulation reflects responsibilities companies have had for many years, and they have all the tools and information they need to comply. Enough time has been wasted looking for ways to help companies shirk their responsibilities. Now the focus must be on making sure they meet them as soon as possible,” said Michael Reckordt of PowerShift.

By itself, this trade Regulation cannot bring peace and prosperity to communities blighted by the resource curse. Civil society has therefore welcomed the EU’s integrated approach intending to complement the new Regulation with diplomatic and development measures.

“Concluding these negotiations is an important step, despite the limited scope of the new law. But this is only the beginning of the process, not the end. Now is the time for companies to show that they are serious about meeting their responsibilities; for EU member states to show that they are committed to enforcing the standards which have now been established; and for the EU to make use of all its resources to promote a more sustainable and responsible sourcing of minerals worldwide.” said Frederic Triest of EurAc.

Notes to the Editor

The EU reached a “political understanding” in June 2016, which set the broad political contours for the Regulation. Technical discussions were then held to develop the final text of the Regulation. This “trilogue” process concluded today, with the European Commission, European Parliament, and Council reaching agreement on a final text. This text will now be voted on in the Council and Parliament.

The Regulation applies to companies whose imports of ores or metals of tin, tantalum, tungsten, or gold into the EU exceed certain specified annual thresholds. The law will require companies to conduct “due diligence” on their supply chains broadly in line with the requirements of the Organisation for Economic Cooperation and Development’s (OECD) “Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.” Unlike the EU’s Regulation, this OECD Guidance applies to all mineral resources and to the entire supply chain, including companies that buy or trade products containing those minerals.

Due diligence on mineral supply chains does not aim to discourage sourcing from fragile and high-risk areas. Rather, they seek to encourage and facilitate a more responsible and transparent trade with these regions.

For further information please contact:

Amnesty International
Alison Abrahams: Tel: +32 2 548 2773; email: aabrahams[at]amnesty.eu

Global Witness
Rosie Childs: Tel: +44 7725 260 530; email: rchilds[at]globalwitness.org

EurAc
Julie Capoulade: +32 499 81 01 77 ; email: julie.capoulade[at]eurac-network.org

PowerShift
Michael Reckordt: +49 (0)30 42805479, email: Michael.Reckordt[at]power-shift.de
 
Signed by:-
Action Aid
Alboan
Amnesty International
Association Internationale de Techniciens, Experts et Chercheurs
Bread for the World
CEEweb for Biodiversity
Christliche Initiative Romero
CIDSE
Diakonia
DKA Austria
EurAc
Fairtrade Luxembourg
focsiv
Fundacion Mainel
Germanwatch
Global Witness
Instytut Globalnej Odpowiedzialnosci
Jesuit European Social Centre
Jesuit Refugee Service
Justice et Paix Commission
Justicia I Pau
London Mining Network
Misereor
Powershift
PMU
Progressio 75
SCIAF Scottish Catholic International Aid Fund
Solidaritat Castelldefels Kasando
Somo
Stop Mad Mining
WEED e.V. – World Economy, Ecology & Development
11.11.11

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EU agrees law to curb flow of conflict minerals

Reuters - http://www.reuters.com/article/us-eu-trade-conflict-idUSKBN13H279

22 November 2016

The European Union agreed a deal on Tuesday to stem the flow of gold and other metals used to fund armed conflicts or produced in conditions that breach human rights.

EU importers of tin, tungsten, tantalum, gold and their ores will from 2021 have to carry out checks on their suppliers in legislation that will also apply to smelters and refiners.

Human rights campaigners said the agreement was a half-hearted first step, with imports of finished products that may contain the minerals not included and an end result that exempted a large number of companies.

Industrial users of the commodities said the deal reached in outline in June strikes the right balance.

Members of the European Parliament and European Commission officials who brokered the deal said it would improve the lives of those living in conflict zones and break a vicious cycle between the trade in minerals and the financing of conflicts.

"This is a very strong regulation. It's ground breaking," EU Trade Commissioner Cecilia Malmstrom told a news conference, adding she hoped other countries would follow the EU example.

The EU rules will cover the minerals anywhere in the world, meaning they go further in scope than U.S. Dodd-Frank legislation that is limited to the Democratic Republic of Congo and nine neighboring countries.

However, the EU would only scrutinize imports of the raw materials, while the U.S. law extends that to their use in products such as mobile phones, electrical goods and cars.

All but the smallest EU firms will have to carry out due diligence checks on their suppliers. Dentists have been cited as one group that would not have to do checks.

Michael Gibb, conflict resource team leader at campaign group Global Witness, welcomed the fact that checks would be mandatory, but said the EU had appeared to allow sizeable trading exempt from checks - such as up to 100 kg of gold (220 pounds) per year.

"This will include serious minerals traders. It's not just dentists," he said, adding a four-year phase-in was also too long.

Global Witness believes it would also have made sense to have a longer list of materials, including for example cobalt, widely used in batteries and in aircraft engines, and diamonds and other gems.

Tin, tantalum, tungsten and gold are used in the production of many high-tech devices, in the automotive, electronics, aerospace, packaging, construction, lighting, industrial machinery and tooling industries, as well as in jewelry.

(Reporting By Philip Blenkinsop, editing by David Evans)

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EU agrees to compulsory checks on conflict mineral imports

By Cécile Barbière

EurActiv.fr - https://www.euractiv.com/section/global-europe/news/eu-agrees-compulsory-checks-on-conflict-mineral-imports/

Translated By Samuel White

23 November 2016

After lengthy negotiations, the European institutions have agreed to establish compulsory checks on the supply chain of conflict minerals from 2021. EurActiv France reports.

The new EU rules will force importers of tin, gold, tungsten and tantalum (the material that makes mobile phones vibrate) to ensure that their raw materials do not come from conflict zones and are not used to finance armed conflicts.

Agreed on Tuesday (22 November), the new rules demand greater supply chain transparency from the EU’s mineral importers. The industry is often linked to human rights violations and armed conflicts, particularly in Africa’s Great Lakes region and, more specifically, the Democratic Republic of the Congo (DRC).

The agreement, which has become tougher as it has moved towards the adoption stage, will be put up for ratification in the European Parliament and Council next year.

The Commission had originally proposed a voluntary system of checks, incentivised by a certification scheme. But pressure from MEPs forced the executive to rethink its plans and propose a compulsory system.

Exemption for small importers

The regulation still offers an exemption for the smallest importers, like dentists and jewellers. They will not be obliged to trace the materials they bring into the EU, as the administrative costs are deemed too high.

“These volume thresholds that exempt companies from complying with legislation are dangerous loopholes. They could let minerals worth millions of euros enter the EU free of any scrutiny,” said Nele Meyer from Amnesty International.

“This Regulation is a welcome step forward,” said Michael Gibb from the NGO Global Witness. “But while the EU has sent a strong signal to a small group of companies, it has ultimately trusted that many more will continue to regulate themselves. It is now up to these companies to show that this trust is well-placed and well-earned, and we expect our lawmakers to act if it is not.”

The scope of the new legislation will be quite narrow, excluding a large number of companies and products.

Other exemptions enshrined in the compromise concern products that are particularly difficult to trace, like recycled metals and manufactured products. Civil society organisations have warned that this effectively means the compulsory checks will only apply to EU imports of raw materials.

To cover these loopholes, the EU executive must work on a system of voluntary regulations for imports of manufactured products.

The legislation has also been criticised for covering just four minerals and doing nothing to address imports of other materials with proven links to conflicts, such as emeralds and coal from Colombia or copper, jade, and rubies from Burma.

Yet despite its many flaws and loopholes, the proposal on the table has been broadly welcomed.

“It was a long, complicated and often solitary fight, but we made it. […] We made sure that products sold in the EU do not fuel armed militias or foster human-rights violations in conflict areas,” said Gianni Pittella, the leader of the European Parliament’s centre-left S&D group.

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Positions

"After many years of parliamentary and extra-parliamentary work, we have finally created a due diligence obligation for supply chain management," said Helmut Scholz, GUE/NGL Coordinator on the International Trade Committee and member of the Parliament's negotiating delegation.

"Member states have asked to be given until January 1st 2021, to complete this task. I am saddened by this situation, in which the suffering of victims of violence in ongoing conflicts, as well as of the 40,000 children who are forced to work for the warlords in the Congolese mines, will be prolonged due to slow administration in Europe. We therefore urge all companies to realise that the law has been agreed and that it is socially responsible to begin implementing their coming due diligence obligations immediately," he added.

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Background

Conflict minerals are minerals mined in conditions of armed conflict and human rights abuses, mostly in the eastern provinces of the Democratic Republic of the Congo (DRC). The looting of the Congo's natural resources is not limited to domestic actors; during the Congo Wars, Rwanda, Uganda and Burundi particularly profited from the Congo's resources.

The most commonly mined minerals are cassiterite, wolframite, coltan and gold, which are extracted from the Eastern Congo, and passed through a variety of intermediaries before being purchased by multinational electronics companies.

Since 2003, the European Commission has been a high profile donor to the Congo, particularly in the country’s unstable east. The EU’s Country Strategy Paper for the 2008-2013 period, under the 10th European Development Fund, pledges some €583 million of European funds to the country from DG Humanitarian Aid and Civil Protection (ECHO).

This is supplemented by funds from the EU general budget under the Development Cooperation Instrument, and funds for other bodies such as the European Instrument for Democracy and Human Rights, the Instrument for Stability, Eufor RD Congo, Eupol RDC, and Eusec RDC.