European Parliament Approves 'Conflict Minerals' Law for Importers

Retail and Consumer Confidence
20/03/2017 16:46

The European Parliament last week approved a draft regulation intended to prevent the minerals trade from funding conflict and human rights violations in Africa. If adopted, this “conflict minerals” law will oblige all but the smallest EU importers of tin, tungsten, tantalum, gold and their ores from conflict and high-risk areas to do "due diligence" checks on their suppliers, and big manufacturers will also have to disclose how they plan to monitor their sources to comply with the rules. Authorities in EU member states will be responsible for ensuring compliance by companies. Recycled materials and small importers, such as dentists and jewelers, accounting for 5% of imports, will be exempted, so as not to impose unreasonable bureaucratic burdens. The new regulation is yet to be approved by the EU Council.

“The new regulation has the potential to change the lives of people caught up in war. Our system, however, will only work on the ground if it stays flexible and all players involved learn continuously and act responsibly”, said rapporteur Iuliu Winkler (EPP, RO). “We cannot turn a blind eye to the harm we cause in other parts of the world. These rules have laid the groundwork for an effective tool to break the link between conflicts, human rights abuses and our consumption of everyday goods”, International Trade Committee chair Bernd Lange (S&D, DE) added. Once approved, due diligence obligations will apply from 1 January 2021 to allow member states time to appoint competent authorities and importers to become familiar with their obligations. The EU Commission will review the effectiveness of the new law regularly, covering its impact on the ground and compliance by EU firms. It may have to propose additional mandatory measures should the application of due diligence by companies prove unsatisfactory.

Background

Mineral-rich countries afflicted by conflicts face a vicious circle in which revenue from illegally extracted resources feeds armed revolts. The regulation applies to all conflict-affected and high-risk areas in the world, of which the Democratic Republic of the Congo and the Great Lakes region are the most obvious examples. 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 jewellery. “Due diligence” is defined by international OECD guidelines to help companies respect human rights and avoid contributing to conflict through their trade in minerals. Currently they have the status of recommendations.