Dealing with conflict minerals

13 November 2014

For years the business of minerals has fuelled conflicts in many parts of the world. The extraction and trade of minerals such as gold and tin have financed or even created civil wars, and led to unimaginable violence and human rights abuses.

Currently, there are very little rules in place preventing these minerals making their way to the UK. Conflict minerals can be found everywhere in Europe, from the jewellery we buy for our loved ones to the mobile phones we use every day.

Because we buy these minerals we are responsible for the way they are extracted. This is why the new EU draft legislation on conflict minerals is so important.

The file was discussed for the first time recently in the International Trade Committee of the European Parliament. Many of you in the North East have already written to urge us to get it right. We'd like to explain how we think it could be done.

The Commission is proposing a voluntary self-certification scheme. Under this new system, importers of minerals would commit to carry due diligence to ensure that the minerals they trades are not supporting conflicts. This proposal would replicate in EU law a similar initiative at global level that was launched by the OECD 3 years ago.

But voluntary systems do not really work. The Commission carried out a study that found that only 4% of all importers reviewed were complying with the OECD system. This is clear evidence that we need to make our rules compulsory, or else they simply won't be implemented.

Having such a voluntary system would also penalise virtuous companies. Companies not complying with the rules would have an unfair advantage.

And because the system would only apply to importers, this could lead to very unfortunate consequences. Before becoming MEP for the North East, Jude was leading the European Metalworkers' Union on trade policy. She learned in this experience that supply chains are extremely long and intricate in this sector. Imposing rules just on importers would put a lot of pressure on smelters. So our rules should involve everyone on the supply chain, from end users to smelters, as it is the only way to ensure fairness, close all loopholes and avoid negative side effects on jobs and economic development.

The Commission proposal is in stark contrast the US regulation. The American Congress adopted a law in 2012 that makes it mandatory for all companies to disclose any minerals used which have been sourced from the Congo.

In the future trade agreement between the EU and the US, there will be a chapter on regulatory cooperation. On some issues, the US regulation is lagging behind and cooperation could lead to a weakening of our standards. But we could match the level of ambition displayed by US regulation on conflict mineral to our benefit and that of exporting countries.

The Commission proposal as it stands would create a lot of red-tape for very little potential benefit. It would add a new set of rules for global importers to choose to comply with, on top of the OECD scheme and the US regulation. This is not the right approach, and we need to make sure that our rules complement and enhanced what already exist.

So we are a still a long way to deliver truly useful legislation, breaking the link between minerals and conflicts and make a real contribution to enforcing human rights. We'll table amendments and lobby the European Commission to push for better solutions.

We'll keep you posted on how the file evolves. In the meantime, get in touch if you'd like to know more!

 

Jude and Paul

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