RESPONSIBLE TRADING STRATEGIES FOR MINERALS FROM CONFLICT ZONES
High Representative (HR) of the EU for Foreign Affairs and Security Policy Catherine Ashton and EU Trade Commissioner Karel De Gucht today proposed an integrated EU approach to stop profits from trading minerals being used to fund armed conflicts. The package of measures will make it more difficult for armed groups in conflict-affected and high-risk areas to finance their activities through the mining of and trade in minerals. The focus of the approach is to make it easier for companies to source tin, tantalum, tungsten and gold responsibly and to encourage legitimate trading channels.
“We are committed to preventing international trade in minerals from intensifying or perpetuating conflict,” said HR/VP Catherine Ashton and EU Trade Commissioner Karel De Gucht. “Today’s initiative on ‘conflict minerals’ will help trade to work for peace, for communities and for prosperity in areas around the globe affected by armed conflict. It is a first and timely contribution from the EU to support a consensus reached by business, civil society and governments in OECD countries to help communities benefit from their natural resources.”
The Commission proposes a draft Regulation setting up an EU system of self-certification for importers of tin, tantalum, tungsten and gold who choose to import responsibly into the Union. Self-certification requires EU importers of these metals and their ores to exercise ‘due diligence’ – i.e. to avoid causing harm on the ground – by monitoring and administering their purchases and sales in line with the five steps of the Organisation for Economic Cooperation and Development (OECD) Due Diligence Guidance. The aim is to act at the most effective level of the EU supply chain for these minerals and to facilitate the flow of due diligence information down to end users. The Regulation gives EU importers an opportunity to deepen ongoing efforts to ensure clean supply chains when trading legitimately with operators in conflict-affected countries.
To increase public accountability of smelters and refiners, enhance supply chain transparency and facilitate responsible mineral sourcing, the EU aims to publish an annual list of EU and global ‘responsible smelters and refiners’. With more than 400 importers of such ores and metals, the EU is among the largest markets for tin, tantalum, tungsten and gold.
The proposed Regulation is accompanied by a “Communication” (a proposal), a paper that presents the overall comprehensive foreign policy approach on how to tackle the link between conflict and the trade of minerals extracted in affected areas. It sets out the EU’s further engagement in support of the OECD due diligence guidance and the EU’s foreign policy outreach and support in this regard. With the Communication, the Commission and the HR/VP confirm that ‘conflict minerals’ are part of the EU’s foreign policy agenda and that the EU will take concrete action at country and international level – ranging from support to policy dialogues and diplomatic outreach to smelter countries. The Communication supports the commitment by the Commission and the High Representative to promote a strong and coherent EU raw materials diplomacy, addressing the security-development nexus in a joined-up and strategic manner.
Today’s initiative also proposes a number of incentives supporting the Regulation to encourage supply chain due diligence by EU companies, such as:
- Public procurement incentives for companies selling products such as mobile phones, printers and computers containing tin, tantalum, tungsten and gold;
- Financial support for Small and Medium sized Enterprises (SMEs) to carry out due diligence and for the OECD for capacity building and outreach activities;
- Visible recognition for the efforts of EU companies who source responsibly from conflict-affected countries or areas;
- Policy dialogues and diplomatic outreach with governments in extraction, processing and consuming countries to encourage a broader use of due diligence;
- Raw materials diplomacy including in the context of multi-stakeholder due diligence initiatives;
- Development cooperation with the countries concerned;
- Support by EU Member States through their own policies and instruments.
The proposal for a Regulation is based on a public consultation, an impact assessment and extensive consultations with the OECD, business, civil society, as well as with institutions in producer countries.
It responds to the European Parliament’s call in 2010 for the EU to legislate along the same lines as the US which requires its companies using ‘conflict minerals’ to declare their origin and exercise due diligence.
The public consultation and impact assessment highlighted the difficult market situation in the Great Lakes Region which has prompted the Commission to develop an alternative but targeted and complementary model. The Commission also announced in the specialised publication Commodity markets and raw materialsand its Trade, growth and development Communication its intention to look at ways of making the supply chain more transparent.