Rules imposed by Dodd-Frank are cutting off a critical source of funding for armed groups that have plagued the country for more than 20 years.
- By John PrendergastJohn Prendergast is the Founding Director of the Enough Project (EnoughProject.org) and the Co-Founder of The Sentry (TheSentry.org), a new investigative initiative to counter the financing of Africa's deadliest wars. He was formerly a Director of African Affairs at the National Security Council., Sasha LezhnevSasha Lezhnev is Associate Director of Policy at the Enough Project and author of the book Crafting Peace: Strategies to Deal with Warlords in Collapsing States., Lauren WolfeLauren Wolfe is a journalist and director of Women Under Siege, a journalism project on sexualized violence based at the Women's Media Center in New York.
In a critique on the campaign to end the trade in conflict minerals from the Democratic Republic of Congo, Foreign Policy contributor Lauren Wolfe asserts that three main arguments used by the campaign are myths. Over a decade of independent research by the United Nations, Congolese research bodies, and NGOs, as well as key leaders of Congolese civil society, however, reveal critical evidence on why work on conflict minerals is one important part of the solution in eastern Congo. In its assessment of the impact of the Dodd-Frank legislation on conflict minerals, the article misses the larger picture of the deadly conflict in eastern Congo and ignores many important voices of Congolese civil society.
[Editor’s note: A response from Lauren Wolfe can be found at the end of this article.]
Alleged myth: Armed groups control and rely on most of Congo’s mines, and Dodd-Frank has helped to counteract them.
Fact: Armed groups and their backers have profited heavily from minerals in eastern Congo, and Dodd-Frank Section 1502 is starting to transform that. But there is still a long way to go.
The conflict in eastern Congo began in the early 1990s for reasons other than minerals, but minerals then became a critical fuel and driver of the violence. Rwanda and Uganda invaded Congo for the second time in 1998, establishing “a system for effective use of natural resources in the territory under their control, setting up departments of finance and mining in charge of awarding contracts and sales,” according to the International Crisis Group. Multiple United Nations expert panels and Congolese research bodies have documented since 2001 how various armed groups and their backers in Kigali, Kampala, and Kinshasa made hundreds of millions of dollars by illicitly exploiting natural resources, in particular minerals. One U.N. panel called minerals “the engine of the conflict,” a prominent Congolese research institute cited minerals as “a major source of income and of conflict in North Kivu as in the whole of the DRC,” and a third U.N. Group of Experts called minerals “the principal method used by FDLR [rebel group] to raise funds.” In 2008 alone, armed groups were estimated to have generated between $138 to $226 million from the minerals trade by controlling mines and trading routes. In 2010, the year that Dodd-Frank passed, the U.N. Group of Experts reported that, “In the [Congo’s] Kivu provinces, almost every mining deposit [was] controlled by a military group.” The Congolese Archbishop of Bukavu François-Xavier Maroy Rusengo explained to our team in 2014, “War is planned by people who want to get a hold of this wealth. There is a correlation between minerals and rape. Most places that are home to mines are where the assaults on women have been most dramatic.”
Wolfe cites a finding that “8 percent of conflicts [in Congo] are over natural resources,” which traces back to a footnote from Professor Severine Autesserre that cites an internal study by the U.N. in Congo. That report seems to contradict a decade of U.N. expert studies, so one would need to review the methodology it used to define conflicts, the scope, time period, etc., in order to be able to assess its validity. We contacted the U.N. in Congo and academics who cited the study, but no one could actually provide it. We would welcome the opportunity to read the study and understand its methodology.
Today, several major armed groups are significantly weaker in eastern Congo, and many fewer mines under the control of armed groups. This is thanks to both military operations and economic shifts that were a result of Dodd-Frank and corporate supply chain audits.
Several significant armed groups that traded in conflict minerals have significantly decreased in size or have disappeared. There is no longer a large-scale Rwanda-backed militia in eastern Congo, in contrast to the eastern Congo of the past 20 years. The Rwandan army and Rwandan-backed rebels had been major profiteers from the conflict minerals trade, in particular from the tin, tantalum, and tungsten (“3T”) trade, which has been heavily affected by Dodd-Frank. International pressure and military operations had a major impact on Rwandan-backed rebels, but the changed incentives for the 3Ts trade have also had a significant effect. The FDLR armed group is one-quarter of its size from five years ago, and other militias such as FRPI, Mai Mai Morgan, Nyatura, Hilaire Kombi, and Mai Mai Kifuafua are weakened.
Armed groups and Congo’s army have also pulled out of Bisie, previously one of the largest tin mines in the world and which accounted for 70 percent of North Kivu’s tin production and which was the site of large-scale profiteering and exploitation by multiple armed groups. As 28 Congolese civil society organizations highlighted in 2014, “the campaign against conflict minerals as well as the requirements of section 1502 of the Dodd-Frank legislation give armed groups no choice but to change the sector of activity, in the absence of a market for their minerals. It is indeed an achievement for the campaign and the legislation to have forced armed groups to leave the artisanal mining sector. … all ongoing initiatives [should] broaden their field of action to these other sectors that are not taken into account in section 1502 of the Dodd-Frank legislation.”
However, there are still major issues to be dealt with, because Congo’s war is not only about minerals. The Congolese government and donors have utterly failed to develop a program to disarm, demobilize, and reintegrate combatants from domestic armed groups, resulting in some ex-fighters wanting to rejoin armed groups. The FDLR still profits, albeit to a lesser extent, from gold and charcoal, and it did not disarm voluntarily in 2014. The Ugandan ADF militia, allegedly in collaboration with Congolese army officers, killed over 300 people in attacks in late 2014. And the presidents of Congo, Rwanda, Uganda, and Burundi have all spent far too many years in power, seriously undermining democracy in the region. A far more effective DDR process must be set up; the remaining armed groups must be the targets of peace-building efforts; and Kabila and other regional presidents should institute major governance reforms, including the holding of free, fair, and timely elections in Congo. And regional and international leaders should incorporate the voices of civil society, in particular women’s groups, as a serious and legitimate part of any sustainable peace process.
Remaining focused on the primary goal — ending armed violence and contributing to peace and stability in Congo — is key. Dodd-Frank 1502 was never intended to address all of Congo’s challenges. Nevertheless, it has spurred many reforms in the region to address the illicit minerals trade, and it has started to help make areas of eastern Congo safer.
Alleged myth: Dodd-Frank will make life better for Congolese civilians.
Fact: Dodd-Frank 1502 is leading to increased security in many mining areas by shrinking the market for conflict minerals. However, it must urgently be accompanied by additional mining and minerals tagging reforms and investment in livelihood programs.
In stark contrast to 2010, nearly three-quarters of miners (74 percent) at tin, tantalum, and tungsten mines are now no longer working under the threat of armed groups or Congo’s army, according to independent research conducted in 2014. Civil society groups in eastern Congo’s most mineral-rich territory, Walikale, are now positive about security conditions at mines that have been validated as conflict-free. One hundred twenty five mines in eastern Congo have now passed the conflict-free audits, which is the first step of the regional minerals certification process. The certification process was conceived of before Dodd-Frank, but because there was no incentive to implement it, it remained dormant until 2010.
It is only since the passage of the legislation that certification has kicked off. Conflict-free mining projects involving Motorola Solutions, Intel, Apple, and other companies have begun as well. Today, the minerals prices for Congolese miners at such projects are over 30 percent higher than previous prices. Many of the miners at the conflict-free mining projects are ex-combatants who fled from armed groups such as Nyatura, meaning conflict-free mining is starting to contribute to gainful employment outside armed groups.
However, this is far from the end of the process. The Congolese army continues to smuggle gold and, to a lesser extent, other minerals. Both Congolese and international experts and Congolese civil society groups have called for deeper reforms by the Congolese and regional governments, as well as metals companies that run the minerals tagging system, to reinforce Dodd-Frank. For example, certain Congolese army officers should be prosecuted by the Congo’s military justice system for illegally pillaging natural resources, and the minerals certification process must investigate and sanction smugglers in Uganda and Rwanda. Many miners still face harsh conditions, especially gold miners. These mining communities must be supported with microfinance schemes and improved infrastructure such as the Goma-Walikale road. The E.U., the World Bank, USAID, governments, and tech and jewelry companies should support robust livelihood programs to support mining communities, increased conflict-free certification, and further mining reforms.
Alleged myth: Dodd-Frank is being successfully enforced.
Fact: Dodd-Frank is succeeding in compelling corporations to make supply chains more transparent, but it must be followed up with more measures on the ground.
Dodd-Frank 1502 is a transparency measure intended to force corporations to be more transparent about their supply chains. It is a critical piece of the puzzle, because corporations are the end-users of Congo’s minerals, and Dodd-Frank 1502 is the only mandatory mechanism for corporate accountability. It succeeded last year in getting 1,305 end-user companies to examine their supply chains and report on their due diligence steps for the first time in history, meaning that tens of thousands of companies within those supply chains had to examine and change their business practices. Without it, companies would be free to source minerals opaquely from war zones with no mechanism for public accountability. Because of the law, companies have joined rigorous conflict-free auditing programs set up by Intel, Motorola, HP, Apple, and others, and approximately half of the world’s smelters are now conflict-free. However, company reporting is still very uneven and must improve.
On the ground in Congo, this has meant a shrunken market for traders who previously sold minerals from mines controlled by armed groups. Today, minerals not part of the validated conflict-free mines sell at a discount of 30 to 60 percent to minerals that are. That is a major market incentive to decrease the military presence in the trade.
However, corruption in Congo and in other regional governments remains very high, making attempts at implementing reforms increasing responsible investment in Congo painfully slow. Congolese government agents continue many corrupt practices, and some 3T minerals are being laundered through Rwanda, according to the U.N. Additionally, the “bag and tag” due diligence system for minerals, a current component of certification, must have greater transparency, and the regional certification process must move more quickly, which is planned for 2015. Moreover, there has been little to no progress on gold to date, because of the ease of smuggling small amounts of gold for high value. However, there is finally more widespread recognition of the conflict gold problem, and gold is the main target of new conflict minerals campaign efforts aimed at increasing responsible sourcing of Congolese gold and formalization of the trade.
The critics of the conflict minerals efforts often allege that conflict minerals are not a silver bullet for Congo’s problems. This is a straw man. The conflict minerals campaign is about using minerals reform and transparency as a catalyst for increased attention to a wide array of policy initiatives and reforms that must occur for peace to have a chance in Congo. Instead of attacking a straw man, time and energy would be better spent investing in these important accompanying reforms that can continue to demilitarize eastern Congo while increasing the benefits to Congolese mining communities.
A Response from Lauren Wolfe
In a badly lit room in Bukavu, a city in eastern Congo, about one year ago, a handful of women described being raped for permission to engage in the stupefying grueling lifting of rocks and water for a few dollars a day. They begged for anyone to listen to their suffering. Would anything stop the men at the artisanal mines where they worked from exploiting them?
My heart ached. I knew that there were groups in the United States trying to stop the violence in this part of the world, and a provision of the U.S. law known as Dodd-Frank — the “conflict minerals” law — is meant to help remove the threat of rape and war from their sites of labor. They hadn’t heard of it. What about armed groups at mines? “The men who rape us are not rebels,” they said. In fact, a few women in the room described having been raped by armed militias while farming instead. I left that dark room aware of a disconnect between what American NGOs were saying about Congolese minerals and what these miners had experienced. The problem of “conflict minerals” was not quite as all-encompassing as we had perhaps heard in the States.
Congo has been destroyed by nearly 20 years of conflict; its effects have been devastating, yes, and those need to be addressed. But can the regulation of minerals be achieved in a meaningful way, and will that have positive consequences for these women and the others they work with?
Many months later, after dozens of interviews with experts, NGOs, and corporations, I’ve concluded that while perhaps well-meaning, and with a number of solid research points, the narrative repeated by groups like the Enough Project was not leading to change for these women and other low-level miners. Almost everyone I spoke to on all sides of the debate — including a representative for Enough — mentioned a “long-term” endgame with no final date. There would be some sorrow as Dodd-Frank’s regulation process was slowly applied, they said.
Enough states that armed groups may no longer control certain mines. But as I wrote in my story, there is simply no way to know that this is due to Dodd-Frank. The war in Congo is an ever-shifting beast, and one with many factors driving it, as Enough acknowledges. In fact, I’ve found in my reporting that rape is now perpetrated mostly by civilians. We seem to agree that something — indeed many things — need to be done.
The sad fact is that there is no easy answer to the great suffering of a country whose people have been colonized and murdered, and whose resources have been pillaged by a corrupt government.
Removing corporate interest in Congo’s minerals, an inadvertent outcome of Dodd-Frank, was devastating to everyday miners. Interest must be paid to this fallout and the ongoing loss of income as companies’ costs increase due to regulation, and as these costs are passed on to the lowest-level workers. Governments and corporations must make a meaningful investment in alternative livelihoods for those at risk of losing their jobs or still working under terrible conditions — conflict related or no.
There is no silver bullet to simply fix this country’s complex problems, as Enough plainly states. But perhaps it is time to face the fact that the regulatory law now in place has done little to improve the lives of some of the poorest people on earth — and, for many, it may have made an already dismal reality grimmer.
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