EU agrees on measures regulating conflict minerals

Companies importing tin, tantalum, tungsten and gold into the bloc from conflict zones would have to ensure their activities aren’t fueling fighting

European Union firms importing tin, tantalum, tungsten and gold from conflict zones will have to ensure their activities aren’t fueling armed conflict, under new EU rules that have drawn criticism from human rights groups for not including a wider range of companies.

Large importers, smelters and refiners of the minerals used in goods such as mobile phones, cars and jewelry would now be obliged to investigate the sources of the minerals in which they trade to ensure they don’t finance armed groups.

The proposed regulations have been agreed upon by EU lawmakers, member states and the European Commission, the bloc’s executive arm. The rules are expected to be adopted formally in the coming months.

Under the new regulations, national member states would oversee compliance with the rules and set the size of the sanctions for any companies breaching the laws targeting the four so-called conflict minerals.

The rules could affect around 900,000 European companies using the metals in auto parts, electronics, packaging, lighting, aerospace, construction, jewelry and other industries.

“We need to finally break the vicious cycle between trade in minerals and the financing of conflicts. Today marks an important way point towards achieving this goal,” Bernd Lange, head of the European Parliament’s trade committee said.

The commission and member states had initially proposed that companies only investigate the sources of their minerals on a voluntary basis.

Human rights group Amnesty International, however, said the proposed law would have no meaningful impact because the EU regulations wouldn’t impose the same rules on companies that import finished products containing those minerals.

“What we’re asking for is simple: that the European Union requires European companies to act with due care when buying these minerals or products. This is entirely in line with existing international standards that EU member states signed up to years ago,” said Iverna McGowan, head of Amnesty International’s European Institutions Office.

The commission said it would encourage manufacturers, such as car makers or phone makers, to disclose details about products that could contain the conflict minerals.

Trading in conflict diamonds already is addressed by the so-called Kimberley Process, a global industry effort to prevent trading in rough diamonds by insurgent groups.

Iuliu Winkler, a Romanian member of the European Parliament who brokered the deal, said the new EU regulations had particular importance in light of the migration crisis faced by the bloc.

The new rules would apply to all areas mired in armed conflict, but the EU singled out the Democratic Republic of Congo as a prime example. Conflict minerals and diamonds have fueled the fighting in that country, displacing several million people.

The EU’s smallest importers, such as those supplying the dentist industry, would be excluded from the rules, the bloc said, to avoid what it said would be “unreasonable bureaucratic burdens on small enterprises.” Recycled materials, existing mineral stocks within the 28 member states and mineral byproducts are also excluded from the regulations.

In the U.S., public companies are obliged to report whether minerals used in their products come from the Democratic Republic of Congo or neighboring countries and, if so, to determine if their mineral purchases are funding armed groups in the region.

Source: http://www.wsj.com