EU prepares clampdown on conflict minerals

Blessed with large reserves of cobalt and coltan, key components in batteries and mobile phones, the struggle over lucrative mining zones between government and rebels forces in the country has led to an ongoing litany of murder, rape, and forced labour, notes a recent report by Human Rights Watch.

To counter this, the European Commission is actively eyeing two provisions in a package of new US rules for Wall Street (the Dodd-Frank Act), signed into law by President Barack Obama last July.

One measure obliges extractive companies listed on US stock-exchanges to publish payments made to governments on a country-by-country basis (CBCR), a step Brussels is likely to mirror.

"Internal market commissioner Michel Barnier's view is to extend disclosure requirements to the extractive industry [mining, oil and gas], and leaves open the possibility to include other sectors at a later stage," said spokeswoman Chantal Hughes.

The added disclosure can be used to hold governments to account for the royalties they receive, helping to stamp out corruption, say supporters of the move. A commission communication is scheduled for this summer, along with a reform of the EU's transparency directive in the autumn.

But measures to target large corporations may be insufficient in certain conflict zones, warn experts.

"The problem is that mining in eastern DRC is artisanal and frequently controlled by military or rebel groups," Evie Francq, a researcher with the Antwerp-based International Peace Information Service (IPIS), told EUobserver.

As a result, a second provision in the Dodd-Frank Act calls for new rules to force listed US companies to declare whether their products contain minerals from eastern DRC or neighbouring regions.

A number of euro-deputies support this additional country of origin reporting, and have called on the commission to go even further. Socialist Belgian MEPs Marc Tarabella and Véronique de Keyser used a recent plenary session to call on the commission to ban all goods made with conflict minerals.

Green MEP Reinhard Butikofer is also sympathetic to the idea, but acknowledges various complications exist.

"How do you identify the source of raw materials? The Kimberley process for diamonds is much easier as you can analyse the chemical structure of individual diamonds. This is much harder for other materials," he says.

Germany's Federal Institute for Geosciences and Natural Resources has however made progress in developing 'fingerprinting' techniques for other minerals, but high costs remain an issue.

The complications mean the commission's next move in this area is uncertain. "It's very hard at the moment to predict what shape EU legislation might take. Possibly the EU is waiting to see if the Dodd-Frank provision will work in practice," say Francq.

Parts of the extractive industry have also shown resistance to greater non-financial reporting, preferring to follow the industry's voluntary EITI code.