Special Guest Post by STAND Canada Policy Director Maria Simeonova

 

Prior to the January 20th inauguration, the Trump administration had already begun talks on suspending or altogether dismantling former President Obama’s Dodd-Frank Act, specifically section 1502 responsible for addressing conflict minerals originating from the Democratic Republic of Congo (DRC). Section 1502 of the rule mandates that the onus is placed on companies who purchase resources from the DRCcompanies registered with the U.S. Securities and Exchange Commission, and adjoining countries, to ensure that their suppliers guarantee that the business exchange does not include the sale of conflict minerals. Currently, the Act directs companies with ties to business in the region to perform a due diligence check of their supply chain. This guarantees the disclosing of reports for independent audit to regulate whether their mineral acquisitions are aiding armed groups in eastern DRC.

The Trump Administration contends that the suspension of the Dodd-Frank Wall Street Reform and Consumer Protection Act with the newly drafted proposal was executed for 3 reasons:

  1.           “Concern for human rights advancement in the DRC;
  2.           Inflicts harm to parties in the DRC;
  3.           Threatened the national security interest of the US.”

Justification of the Act’s suspension asserts the benevolent intentions of identifying the essential role of humanitarian operations, but emphasizes that it’s the President’s responsibility to defend the national security interests of the United States. This “mounting evidence” cited by the administration providing support for the new proposal has yet to manifest.

International aid groups hold a differing interpretation of the Trump Administration’s draft executive order. Given their extensive experience of working in the region with Congolese victims affected by the trade in conflict minerals, aid groups renounce that the new law would serve in the victims’ benefit. As per Global Witness, this provision would be understood as a carte blanche for companies to instigate business dealings with criminals. In fact, it would encourage the US companies to engage in funding existing conflict and human rights abuses, which is in direct contradiction to the President’s concerns.

Global Witness’s examination has concluded that the current proposal of the draft by the Trump Administration is the antithesis of progress. It amplifies instability in the region, rather than containing it as implied by the Trump administration’s understanding of the legislation. Inevitably, the organization trusts that if this law were to take effect, it  would lead to increased destabilization and undermine US national security fears. Global Witness elaborated further by declaring that the “suspension of the existing law through a national security exemption intended for emergency purposes” is a blatant abuse of power by the Trump Administration.

Possibly expecting objections from human rights organizations, a new strategy to address human rights violations and financing armed groups in the DRC was assured within 180 days of the law’s enactment. The robustness of the pending proposal to target companies known to participate in illegitimate undertakings however, glaringly remains in question as the White House has not provided further commentary since this information was leaked.

STAND Canada, established on the basis of raising awareness of the disastrous impact of financing the conflict in Darfur through natural resources, celebrated the legalization of the provisional clause in 2010 targeting the use of conflict minerals. Devised to discourage companies from sourcing metals and minerals such as tantalum, tin, gold and tungsten from countries ridden with human rights violations, the law placed the onus on businesses to perform a supply chain due diligence. In the slightest, the status quo of the law at least provides a global precedent aimed at encouraging companies to track and divulge their supply chain. However, with the new proposal, the ability to minimize the negative implications of environmental damage and ongoing corruption in the region, no longer appears as a feasible option.

The current United States government should be weary of jumping on the bandwagon to blatantly support businesses at the behest of industry groups criticizing the cost of compliance for companies. Distressingly, as implied by the leaked draft of the bill, the rhetoric of the Trump Administration’s at dismantling Section 1502 impedes the provision’s incremental progress achieved in the last few years at standardizing and raising the bar of expectations for multi-national organizations.  As staunch advocates for human rights issues and the desire to preserve conflict-free areas, STAND will continue to closely monitor and provide updates of the developments in the region.

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