KIGALI, RWANDA— Companies exporting from the eastern Democratic Republic of Congo could soon be offered advantages in Europe under a law being drafted by the European Commission.
The draft law seems to be intended to help break the link between the minerals trade and conflict, but without stopping trade altogether.
A delegation of members of the European parliament has been visiting Rwanda, Burundi and the Congo to see how those countries are likely to be affected by a draft European law on so-called “conflict minerals."
Leading the delegation is Judith Sargentini. She says she won’t see the draft law until it is published, in the next few months, but she has some knowledge of its contents.
She suggests the law will require EU companies buying tin, tantalum, tungsten and gold to prove their supply chain for these minerals.
She says this is in response to legislation passed by the U.S. Congress, in the Dodd Frank Act. The 2010 law mainly deals with financial regulations but also requires U.S.-listed companies buying any of the above minerals to show they have not funded conflict in Africa's Great Lakes region.
"We cannot just have the U.S. work on this issue, when we are the biggest traders with Africa, and ignore this. It will influence European companies that want to trade on the U.S. market, but more importantly Europe has a responsibility to a lot of countries that are even former colonies," says Sargentini.
Asked if the proposed law is also a response to an increase in Chinese imports of these Congolese minerals by companies that are not concerned with the Dodd Frank Act, Sargentini said no, she wouldn’t put it that way.
"But I would say that European communication on trade and raw materials is completely influenced by the fear Europe has that China will buy out everything, and we won’t have anything any more," says Sargentini.
Avoiding an outright embargo
Critics of the Dodd Frank Act say it resulted initially in a virtual embargo on the Congo’s exports of the four minerals, and an increase in smuggling via neighboring countries. Sargentini agrees, but suggests the European law should have a different effect.
"The Dodd Frank Act led to no trade, which makes people unemployed. That’s not what I’m looking for. EU legislation doesn’t have to follow the U.S. It has to put in place legislation that is credible and equally recognized. It will not be a complete stop on commodities from eastern Congo - even if they were mined in bad circumstances," says Sargentini.
She suggests the EU trade commissioner, Belgian Karel de Gucht, who is leading the law drafting process, wants to encourage trade with the Congo.
"I think he will suggest some sort of advantages for companies that continue trading in commodities from eastern Congo and make an effort to do this as transparently as possible. What it could be is to make the entry point into the EU easier - make it cheaper or make it faster," says Sargentini.
Some Congolese experts say they think the Dodd Frank Act has had a positive effect, helping to cut warlords’ funding.
Fidel Bafilemba, who works for the Enough Project in eastern Congo, an organization that campaigns for responsible trading, says the Dodd Frank Act has had positive and negative effects.
He added that the conflict minerals section of the law has not been officially implemented yet, but has had effects because of people’s reactions to how they think it will eventually be applied.