Responsible sourcing of minerals from conflict-affected areas : initial appraisal of a European Commission impact assessment

This note seeks to provide an initial analysis of the strengths and weaknesses of the European Commission's Impact Assessment (IA) accompanying the above proposal adopted on 5 March 2014. Armed groups and security forces in conflict regions partly finance their activities from the proceeds of the extraction and trade of minerals. These products later enter the global supply chain, meaning that business operators further down this chain are at risk of supporting armed activities through their purchases of mineral ores or their derivatives. Business operators from the EU and third countries have therefore expressed an interest in sourcing responsibly from such regions. The concept of responsible sourcing is not new and the proposal builds on existing international due diligence frameworks. The EU has been actively engaged in the process leading to the adoption of the so called OECD Guidance on responsible sourcing of minerals from conflict regions. At the OECD Ministerial Council (May 2011), the Commission 'advocated greater support for and use of the OECD Guidelines for Multinational Enterprises, and of the OECD Guidance - even beyond OECD countries' . In addition, the EP Resolution of 7 October 2010 on human rights failures in the Democratic Republic of Congo (DRC) already expressed the need for the EU 'to legislate along the lines of the US "conflict minerals" law' (The Dodd-Frank Act). Also in 2010, the United States passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (US DFA), section 1502 (Annex I/5) of which requires companies listed on US stock exchanges which use 'conflict minerals' to declare the origin of such minerals, and to perform due diligence. Although the problem is worldwide, the UN Security Council Resolution 1952 (2010) specifically targeted the DRC and surrounding areas in Central Africa, calling for due diligence to be observed.