GAO Says State Dept Must Help Control Eastern Congo Minerals Trade
The Government Accountability has issued its report examining the connection between minerals trade with the eastern Democratic Republic of the Congo (DRC) and human rights abuses, and the efforts to help control the trade.
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Illegal Armed Groups, Military Involved in Mineral Trade
Tin, tantalum, tungsten, and gold are the key minerals mined in eastern DRC. Tin, tantalum, and tungsten follow a similar supply chain; they are mined by hand, sold to small-scale traders, carried by porters, transported by truck or airplane to the border, and sold to trading houses for export. The minerals transit DRC’s neighbors, such as Rwanda, and most are processed in Asia and used in technology products. In contrast, most gold is smuggled out of the eastern DRC and is ultimately used by the jewelry industry.
To varying degrees, illegal armed groups and some military units illicitly tax minerals at mines and mineral transport routes, but they also make money illicitly taxing other trades, such as trade in charcoal and timber.
Significant Challenges Exist for the Monitor/Control of Minerals Trade
The U.S. and the international community, particularly the United Nations, are working to help control the illicit minerals trade, but many efforts are in the preliminary stage. Significant challenges, which are yet to be addressed, exist to monitoring and controlling the minerals trade, including tracking the mine of origin.
U.S. and foreign officials and others said that lack of security, weak governance, and lack of infrastructure in eastern DRC are significant challenges that, unless addressed, will likely impede efforts to control the minerals trade.
GAO Recommends State Dept Provide Steps to Control Minerals Trade, Etc.
GAO recommends that the Secretary of State, in consultation with relevant agencies, provide concrete, actionable steps to help control the minerals trade, including addressing the lack of security, governance, and infrastructure. GAO also recommended that the Secretary work with relevant stakeholders to periodically update information on mines and armed groups. The State Department concurred with GAO’s recommendations.
New Law Requires DRC “Conflict Minerals” Reports to SEC
On July 21, 2010, the President signed into law the conference version of H.R. 4173, the financial reform bill (Public Law 111-203), which imposes new requirements on companies that use “conflict minerals,” etc.
Such minerals are defined as columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivates or any other mineral or its derivatives determined the Secretary of State to be financing conflict in the DRC or an adjoining country.
P.L. 111-203 requires the Securities and Exchange Commission (SEC), not later than 270 days after July 21, 2010, to promulgate regulations requiring certain annual disclosures to the SEC by all persons otherwise required to file with the SEC, for whom “conflict minerals” originating in the DRC and adjoining countries are necessary to the functionality or production of a product that they manufacture.
(See ITT’s Online Archives or 07/22/10 news, 10072230, for BP summary of the President signing H.R. 4173 into law.)
(GAO-10-1030, dated 09/10)