In the News

By Peter Schroeder

 

A provision from the Wall Street reform law intended to force companies to disclose if their products are made using minerals from conflict-stricken areas of Africa was painted by critics as missing the mark and burdensome Thursday.

 

While the House Financial Services Committee is typically occupied with manners closer to Wall Street, a subcommittee hearing delved into the Democratic Republic of Congo (DRC), where violent militias use the mining of key minerals found in a wide range of technological products, like tin, to help fund their operations.

 

The topic was a late addition to the Dodd-Frank financial reform law, which requires companies to determine and then disclose whether any materials used in their products originated in the war-torn region.

 

Republicans and various industries have expressed concern about the measure, warning it could heap burdens on companies trying to meet the requirement while doing little to actually alleviate suffering in the DRC.

 

At the hearing, they sought to strike a precise balance between expressing concern about the human-rights abuses in the area while noting reservations with the measure.

 

"There is an atrocity occurring and nobody's downplaying that, but does taxing American companies solve the problem in the Democratic Republic of Congo? I question that," said Rep. Gary Miller (R-Calif.), who chaired the debate.

 

Meanwhile, Democrats listed the litany of atrocities committed in the Congo, especially the widespread rape of women by the militias, to hammer home the need for the United States to do all it can to combat the problem.

 

"We're talking about the most wretched and vile massive human-rights abuses on record today," said Rep. Gwen Moore (D-Wis.).

 

"Nothing is going to come in and be the silver bullet that fixes it," said Rep. Jim McDermott (D-Wash.), a leading backer of the measure. "The question is ... does our continuing to put money into the Congo feed the war?"

 

Skeptical witnesses agreed that the provision would discourage companies from purchasing minerals from the region. But in doing so, they argued that it would end up harming the miners reliant on the work more than the militias that are being targeted, noting that militias do have other sources of revenue.

 

Mvemba Dizolele, a Congolese who is now a visiting fellow at Stanford University's Hoover Institution, said militias could still function after a crackdown on the minerals, and that if lawmakers were truly serious about the issue, they would take stronger steps.

 

"Our activism is lackluster, and devoid of moral courage in the face of the unnecessary suffering of the Congolese," he said in his testimony. "We hedge our action and refuse to see the reality before us by covering our faces like little children."

 

He called the conflict-minerals provision a "veneer" that would do little.

 

"Maybe the American consumer will have assuaged his conscience," he said.

 

However, the Most Reverend Nicolas Djomo Lola, a Catholic bishop from the Congo, argued through a translator that mining is a leading source of revenue for the militias, and curbing that profit in a gradual way could help reduce the suffering of the Congolese people. He added that most Congolese support themselves via farming, not mining. The Catholic Church of the DRC came out in support of the provision when Dodd-Frank was under consideration.

 

"The mines 'employ' a much smaller portion of the population and their working conditions violate their basic, God-given human dignity," he said. "If we can sever the link between the mines and the militias, we believe that we can curtail the violence and allow people to rebuild their communities and resolve the underlying causes of their conflicts."

 

The Securities and Exchange Commission (SEC), which is charged with implementing the rule, offered a version in December of 2010. It was supposed to finalize the rule by April of last year, but has not yet. The SEC's website estimates the provision will be completed by June.

 

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