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Conflict Minerals: A Business of War

CGW4U FSE Presentation
by

Rebecca Amoah

on 14 January 2013

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Transcript of Conflict Minerals: A Business of War

Conflict Minerals: A Business of War 1885 Colonization -1885 Belgian King Leopold II
takes possession of Africa – central DRC 1960 army revolt – Mobutu Sese Seko declares self president
- establishes dictatorship,
re-names country Zaire 1980 pressure from Zaire totalitarian opposition
and other nations
to hold legitimate elections 1994 conflict breaks out in Rwanda 1996 1997 Mobutu flees Kabila names self president,
assumes name of DRC Kabila’s military – Congolese
and Rwandan troops –
Forces Armes Congolese is formed 1998 Rwandan troops
rebel against Kabila
- assassinated Kabila’s son - Joseph Kabila, sent to end unrest with support from the UN – neighbouring countries withdraw troops, splinter groups stay behind, terrorize Hutus flee to Zaire,
presence of militia
further destabilises country 2nd government merges to
form coalition with Mobutu
- legitimate vote delayed until 1990s Belgian Congo resists foreign rule, gains independence
- new country named Democratic Republic of Congo - elected prime minister assassinated A History of Violence Ethnic groups with deep cultural and political motivations= a constant power struggle
Will continue until a stable government enforces social order 1965 Laurent Desire Kabila organizes rebellion
against Mobutu Armed Violence One of the leading causes in Eastern DRC, 200,000 people internally displaced - Refugees International 2012

Armed Groups – FDLR (Forces democratiques de liberation du Rwanda), Congolese National Army (FARDC), CDNP (Congres
national pour la defense du people), M23

Slayings, mass rape (“rape capitol of the world”) intimidate/control local populations – UN special representative
on sexual violence

Make millions by controlling mine sites/illegally taxing the minerals trade M23 Seizure of Goma, North Kivu November 20th, 2012 military support from Rwandan government
ramifications for humanitarian assistance, aid operations for much of eastern DRC based here - 19, 154 uniformed personnel 31 October 2012 - United Nations
52 fatalities, approved budget - 1 July 2012 - 30 June 2013: $1,402,278,300 - United Nations
displacement deems UN civilian protection mandate a failure - MONUSCO
peacekeepers could not protect Kanyaruchinya IDP camp - sheltered 60,000-80,000 fled to Muguna UN Refugee agency - Refugees International 2012
rebel administration enforce economic power – administrators, informers, police, operatives
cause of M23 rebellion – capture Goma=control border and parts of eastern Congo, secures influence over mineral, charcoal, timber trade, and oil trade wealth in the region Rebel Controls extort and coerce civilians to work
rapid growth of mineral smuggling routes from Congo to Rwanda
exploitation of power in Goma networks expanding
tags routinely sold by mining cooperatives – UN investigators
hotels used as staging posts – Hotel Planet appointing loyalists to control economics of the city
M23 General Bosco Ntaganda “The Terminator” – claimed share of legal/illegal trade between Rwanda and Congo
arrested by president Kabila, wanted by International Criminal Court Global Financial Markets Material Value produces major quantities of tin and tungsten, half the world’s cobalt output, 3% of the world’s copper and gold – US Geological Survey 2010
key supplier of columbite-tantalite (coltan) – mineral ore used to manufacture capacitors in cellphones, tablets, laptops and most mobile devices 15 cents worth of tantalum in every smartphone shipped=$93 million in 2010 – 2012, IHS database of 300 million electromechanical and fastener components used in commercial and military applications
total value of DRC’s mineral wealth – $24 trillion slow, ineffective, early stages
study released October 25 2012: of firms so far haven’t produced data, declarations or documentation to help fulfill regulatory requirement – IHS iSuppli Research Firm 2012 percentage of electronics component manufacturers with available conflict minerals information: of the peer group
of active electronic components on the market – IHS Parts Management Service 2012 Supporters: Financial Reform Legislation July 2010, US enacted the Dodd-Frank Wall Street Reform Act and Consumer Protection Act Requirements: companies must conduct “due diligence” and disclose annually if they use the minerals:
cassiterite
columbite-tantalite
gold
wolframite or tin
tantalum
and tungsten (derivatives)
in products from the DRC or adjoining countries Arguments Supporters too costly compared to effect in the Congo ($9-16 billion to implement) – National Association of Manufacturers "difficult to accurately trace the origin of minerals" – AT&T retailers (Wal-Mart, Motorola and AT&T) want exemption - minimal involvement in manufacturing process "achieving a conflict free supply chain may hurt legitimate miners in the region" – Intel Hewlett-Packard and Intel have started tracking supply chain
avoiding purchasing minerals and metals that finance armed groups in the Congo
conducting on ground assessments and on site reviews Democratic Republic
of Congo welcomed the law, “noble initiative” – Information Minister Lambert Mende
want to prevent a ban on commercial mineral activity Burundi, Tanzania concerned about effect on economies
compliance costs of new rules
manufacturers to begin sourcing minerals from other countries – Minister for Energy and Minerals of Tanzania national army extracting money from mining operations/business trade
battle for economic power against rebels
generals’ salaries financed by revenue from mining districts – rebels seized United States of America US Chamber of Commerce still analyzing regulations
"unworkable and ineffective"
strong concerns, some challenges and issues – Tom Quaadam, VP of Center for Capital Markets Competitiveness Humanitarian "naming and shaming"
SEC caved into industry pressure, for 2-4 years companies would be allowed to say they couldn’t determine where minerals came from – Global Witness
“Making sure your product is not supporting death or rape should also be seen as a quality-of-product issue” – Enough Project
“Clean up this bloody trade”, asking electronic companies to exercise power controls over supply – Global Witness THESIS Complex political and historical implications
Economic necessity
Cannot be solved through basic economic solutions
Requires diplomatic reform to establish stability politically
Achieve political stability=stabilize economic affairs of the state Stance Corruption Armed Violence A technological embargo=widespread economic instability Necessary to virtually every sector involving machinery/mechanical components Neighbouring Countries Solutions Summary and Diplomatic intervention as opposed to economic withdrawal from commercial relations in protest Solutions and Summary diplomatic intervention - increased sanctions against rebels NOT economic withdrawal from commercial relations in protest
accountability demanded by UN Security Council - governments supporting rebel groups, peacekeepers
cutting off funding - hinder armed groups in the DRC but does not address underlying factors
auditing supply chain isn’t easy
legitimate companies suffer – object poverty and destabilisation
difficult/impossible to verify origin of ore shipment Government support of military taxing mines and smuggling ores out of country to sell to smelting companies, using money to purchase weapons Involvement Government Efforts Effects on Congolese People "could assist in the removal of armed groups out of the minerals sector" – Global Witness
major job losses
Kabila stopped mining in eastern provinces for 6 months after US law passed – attempt to break up the “mafia” controlling the trade
UN member states commitment to defend rights of civilians
restoration of protection monitors CONSIDER: CORRUPTION 90% 11.3% 17.1% Industry Response Conflict Minerals EDITION Game Play Teams: pressure from the international community gives voice to civil society
farming can subsidize mining productivity "No single law, particularly foreign, can solve these issues."
- Enough Project “You’re not going to get militias to stop fighting because you cut off one source of revenue. We need to stop pretending that will curb the violence. It won’t”
– Laura Seay, assistant professor of political science at Morehouse College Nikon CSR Report 2011 MONUC and Resolution 1279 - United Nations Organization Mission in the Democratic Republic of the Congo (MONUC) mandate - humanitarian assistance, human rights monitoring - vulnerable groups -women, children and demobilized child soldiers, training and mentoring of FARDC - security sector reform Select one captain and one co-captain Land on claimed property:
Pay the price of the lease designated on the deed
If a team owns all of the properties of the same colour=monopoly, price of the deed is doubled Congolese Government:
All penalties applicable to you drawn as Opportunity or Investment cards will become applicable to any team of your choice Bokungu Rd. Land on an unclaimed property:
Purchase it for the listed price
Place the title deed in front of your team’s area 1) Congolese Government 2) Independent Mining Company 3) Canadian Supply Company 4) Tanzania 5) Congolese Military 6) Rebel Militia Enough Project 2012 "War in this country is a business" - Roger Meece, UN Special Representative of the Secretary General
Full transcript