Tag Archives: New York Times

Is Demand for “Absolute Certainty” Fueling Failure of US Conflict Minerals Law, DRC?

Recent reports in the New York Times and Christian Science Monitor (CSM) about the impact of Section 1502 of the Dodd-Frank Act on the Democratic Republic of Congo (DRC) sparked both controversy and debate in the media and in on-line conversations.  The CSM article contains an interview with Eric Kajemba who, according to the CSM, is founder/director of Observatoire Gouvernance et Paix (OGP), an NGO based in Bukavu, and has worked in the minerals trade.  Mr. Kajemba provided insight into DRC’s mining sector in the twelve months since the law’s passage.  Among his more interesting quotes:

… It is true that there is no official embargo on the Congo today, and that the Dodd-Frank law did not call for such an embargo. But the truth is that as soon as the Congolese export ban was lifted, the Electronic Industry Citizenship Coalition (EICC) [an electronics industry body] in the United States imposed a de facto embargo. Traders here only had time to sell their stock and then everything stopped again! Now most of the minerals seem to leak out through smuggling.

… There are a lot of initiatives that have been proposed, but this has added to the confusion. We need one approach. The centres de négoce and tagging are not enough. Tagging is good – but you can end up tagging dirty minerals, as well! There is a whole bunch of work to do. Let’s not confine ourselves to tagging.

 ENOUGH [the US based activist organization most visible/vocal on conflict minerals issues] has hardened its tone. They only show the negative side of artisanal mining here. This one-sidedness of their advocacy has had negative side-effects. No, we know we can’t stop Dodd-Frank, but we need to be aware of these negative consequences – we are not very happy with Global Witness or ENOUGH, but we feel they are very influential, and we are ready to work with them.

Based on our experiences in conflict minerals auditing, we recognize these points, but from a different perspective:  Approaching compliance with the US conflict minerals law demanding immediate resolution with absolute certainty is perhaps the most direct reason for the de facto US embargo on DRC sourced minerals, and the breakdown of an economy supporting legitimate sources. 

Why?  The issue’s disturbing basis (systemic human rights atrocities), combined with media coverage and well managed NGO campaigns, drive emotionally-charged demands for zero tolerance and absolute certainty in traceability information and processes.  No such solution exists, and attempts to force-fit a handful of inadequately planned ideas are proving unsuccessful and problematic.  The easiest (and theoretically most certain) solution is for companies to simply stop buying any materials sourced from Central Africa, collapsing the sole legitimate economic support for those most needing it.  This result is a case study in perverse consequences.

Our long-standing position is that the implementation of Dodd-Frank’s conflict minerals mandate should be based on “reasonable assurance” rather than “absolute certainty” in expectations, management processes and auditing.   It is worth pointing out that the language of the law itself mirrors this, as it requires “efforts to determine the mine or location of origin with the greatest possible specificity.” 

Removing expectations of – and pressures related to – achieving perfection will allow pragmatic and compliant solutions to develop quickly, and reduce risks for companies seeking to support legitimate DRC sourced materials helping those in need.

Citibank Tries to Swim With the Sharks, But Gets Bitten

The New York Time published an interesting story about Citibank’s environmental reputation.  Apparently, Citibank Hong Kong ran a promotion giving a 15% discount to Citibank card holders for a shark’s fin dinner at Maxim’s Chinese Cuisine.

Oops.  While shark fin is considered a delicacy in the Orient – and most of the world’s commerce in shark fin takes place in or through Hong Kong, there is growing global concern about the legality and sustainability of harvesting the fins.

The promotion drew swift condemnation, with a lively discussion group created on Facebook and an e-mail campaign aimed at Citibank’s marketing manager.

Last week, Citibank Hong Kong withdrew the promotion, which was to have run until the end of the month, in response to feedback. ‘‘Citibank is committed to managing our business in a manner that benefits the society and the environment,’’ it said in a statement.

“A few years ago, there may have been no reaction to Citibank ads promoting shark fin soup,” Michael Skoletsky, executive director at Shark Savers in New York, said in an e-mail message. “Now, Citibank’s fast response shows that companies can’t fall behind an informed public on important environmental problems like shark fin soup.’’