By Steve Feldstein and Sasha Lezhnev
It was not long ago that central Africa was mired in its "first world war" that led to 5.4 million deaths in the Democratic Republic of Congo. Slowly and painstakingly, conflict-affected areas have started to recover. But peace is fragile, and a reversion to widespread violence is never a far-off prospect.
A small provision in U.S. law that has had an outsized effect in the Congo and has diminished the ability of armed groups to raise revenue is Section 1502 of the Dodd-Frank Act, otherwise known as the conflict minerals law. This provision mandates that corporations are responsible for reporting on their supply chains such that they disclose whether or not they are buying minerals from armed groups, which have reaped enormous profits from these sales. The situation in eastern Congo has slowly and steadily improved in recent years, in part due to 1502. Seventy-nine percent of tin, tantalum and tungsten miners in eastern Congo now work in conflict-free mines – a stark contrast to before 1502 was passed. 1502 has also spurred a certification process for minerals, improving the rule of law in the Congo's previously chaotic minerals sector. This has cut significant revenues from armed groups, decreasing their troop strength.
There have been problems in implementing the law, as is the case when any new approach is taken to solving a complex problem. But things have turned around significantly – last year there were record-level exports of conflict-free Congolese minerals. This provision has made a discernible difference in changing the rules of the game and breaking the power of armed groups in several respects: It has forced corporations to be accountable for where their minerals come from, changing longstanding practice from purposeful opaqueness to mandatory transparency, due diligence and public accountability. As transparency has improved, this has also had a virtuous effect on broader labor conditions in the region.
But last week, the Trump White House leaked startling news: The administration is considering suspending the law for the next two years on national security grounds.
This potential decision would undermine peace and security, endanger a tenuous peace in the Congo, provide armed groups with new funding and would represent a major setback to the corporate transparency agenda. We strongly urge the Trump administration and Congress to take a second look at the damage suspending the law would cause, and to build on it, not suspend it.
First, suspending the rule would not save U.S. corporations money. The cost of implementing the rule has been 74-85 percent less than the SEC estimated, according to Elm Sustainability's study released last week. The study also noted that cost savings for U.S. businesses will be "far less than 100 percent of the current implementation costs," because most due diligence programs would continue. The biggest costs for companies were in setting up tracing and auditing systems, which have already been borne by leading companies like Intel and Apple. Moreover, international and U.S. standards for responsible business are requiring these steps as well. The U.S. National Action Plan for Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights both call on companies to look at salient risks and take many of the same due diligence steps.
Second, suspension would undermine stability and democracy in Congo at a particularly sensitive moment. Congo is currently experiencing significant political turmoil, with delicate negotiations taking place about whether President Kabila will adhere to his country's constitution and leave office on time. If militias rearm and increase operations, this could provide a basis for Kabila to try to suspend the constitution on emergency grounds and make the case for staying in power indefinitely.
Finally, suspending Section 1502 would send a devastating precedential signal. It would clearly indicate to the world that the United States is abdicating its leadership on corporate transparency and accountability, and that employing citizens in slave labor conditions and importing minerals that enrich illegal armed groups, which can threaten U.S. national security, is no longer sanctionable behavior. Over time, this action could reverse progress made on establishing an international norm for corporate supply chain responsibility.
We are not suggesting that the Trump administration should refrain from addressing key issues that Section 1502 has not yet resolved. There are legitimate issues that warrant further reflection – for example, how can the U.S. better enforce the rule, exert greater impact on the conflict gold trade or increase the livelihoods of Congolese mining communities? But pursuing a shotgun approach and moving ahead with a blanket suspension of Section 1502 is policy malpractice. Such an action will not bring greater profits for most companies and will likely have a perverse effect by bolstering dangerous armed groups. That is a bet the long-suffering Congolese people cannot afford the U.S. to take.
This article was published on US News' website on February 24, 2017.