How are conflict minerals currently addressed?
In the United States, the Dodd-Frank Act came into force in 2012. It requires all publicly listed companies to check their supply chains for any tin, tungsten, tantalum and gold that may be sourced from the DRC or surrounding countries. In the EU, new legislation came into force in 2021 that requires EU businesses to ensure that 3TG minerals are sourced responsibly.
Both regulating bodies require due diligence, third-party audits, consultations and annual reporting, and the intergovernmental OECD provides guidelines for companies to follow.
However, as the EU law did not come into force until 1 January 2021 – after the Brexit transition window closed – this did not become an EU retained law and currently, there is no legislation on conflict minerals in the UK.
Reducing the environmental impact of mining has not yet made it into legislation. However, a new “Handbook on Environmental Due Diligence in Mineral Supply Chains” was published in 2023 by OECD, the same organisation that aides companies through due diligence for workers rights issues. The handbook acknowledges the “rising demand for minerals critical to the energy and digital transition, such as cobalt, copper, lithium, nickel and rare earths among others” and gives guidelines for companies to understand how they can embed environmental considerations into their supply chain due diligence processes.
What are the effects of legislation on workers’ rights?
It has been widely disputed whether the legislation has had an effect on alleviating the conflict. Some dismiss its impact on reducing conflict as non-existent.
Others say that it had devastating effects on the lives of miners as unemployment rose when some companies pulled out of the conflict zone to avoid being associated with it.
But most commentators agree that legislation has had some benefits. According to the Enough Project, as of 2018, 78% of smelters/refiners have passed third-party audits. This created a two-tier market whereby the price for untraceable 3T conflict minerals is significantly lower than the price for verified conflict-free minerals, which has made the trade in minerals less lucrative for armed groups.
The International Peace Information Service found that, as of 2016, over three-quarters of 3T miners were working in mines where no armed group involvement had been reported. But 64% of gold miners still work at conflict mines.
Many think that enforcing official taxation is the most significant achievement of the implementation of the traceability chain. However, the collected tax rarely flows back to aid the mining communities and the economic and social impacts of these revenues remain unclear.