Friday

21st Sep 2018

Opinion

Conflict minerals: EU can save lives and boost profits

It’s not always fashionable to talk about Brussels wielding power. To many, the inner workings of the European Union seem far-removed from day-to-day life, and in particular, corporate power.

But on Thursday (4 December) in the first European Parliament hearing on trade in “conflict minerals”, MEPs will be discussing landmark legislation that could impact European businesses and some of the most fragile and conflict-affected states in the world.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

As a former business leader at the second biggest mining company in the world, I feel like I have no choice but to make sure that at this critical juncture, an industry voice is heard.

Europe is a key player in the trade in minerals - responsible for almost a quarter of the global trade in tin, tantalum, tungsten, and gold. These minerals - worth over €123 billion - end up in products like mobile phones, laptops, cars and aeroplanes.

But the world’s largest economy has no legislation in place to make sure this trade is not inadvertently funding conflicts, human rights abuses, and modern-day slavery.

We know this isn’t just a risk: In countries, such as the Democratic Republic of Congo, Colombia, and the Central African Republic, the trade in minerals has helped fund conflicts that have killed tens of thousands of people and displaced millions of others.

The US and a dozen African countries have responded by drawing up measures that require companies to investigate and clean up their supply chains. Big US-listed brands, such as Tiffany’s, Intel and Apple, all have to comply.

This makes good business sense. As a former senior executive in the resources sector, I know that supply chain due diligence - whereby companies identify, mitigate, and report on risks along their supply chains - is vital to any successful and sustainable business.

It helps companies discover previously unknown risks, learn more about their supply chains and build in innovations. It also enables them to position themselves as ethical brands to consumers and investors alike.

And of course, companies don’t have to do it on their own.

When companies together commit to due diligence, by sharing information and ideas, it creates new business opportunities in many of the regions that need sustainable and responsible investment the most. This is an opportunity, not a challenge.

But don’t just take my word for it: At Walk Free, I now work with the world’s leading businesses to ensure their supply chains are slavery-free.

In the UK, at a recent parliamentary hearing on the draft Modern Slavery Bill, Swedish retailer Ikea said ethical supply chains are “absolutely” more profitable, while Tesco said a good reputation “more than pays for itself.”

Red tape is red herring

And yet, at the hearing in Brussels on Thursday, you will hear a different argument.

Some MEPs will defend the EU’s paltry conflict minerals proposal - which is not only voluntary, but also estimated to cover only a meagre 0.05 percent of European companies involved in the trade.

Some will even argue that Europe can’t handle mandatory regulation and speak of unnecessary “red tape”.

Conversely, binding legislation has proven to be an effective force in getting companies to take responsibility for their operations and supply chains. It is analogous to workplace safety - a process initiated by some leading brands and then encouraged upon laggards by legislation.

The mining industry had unbelievably high worker injury and mortality rates until the 1980s and 1990s, when companies recognised that looking after their workers had the potential to increase productivity and so profitability.

Now, it is unthinkable not to have health and safety precautions.

We know business can be boosted by doing the right thing.

I’m glad to hear that investors representing more than €855 billion in assets under management have joined the call for binding conflict minerals legislation - which is estimated initially to cost companies just 0.014 per cent of annual turnover, falling still further in subsequent years.

Brands must comply

But, we also need to be clear about who this proposal should cover: the brands that place the consumer products on the market need to comply, as well as those importing the minerals in the form of raw ores and metals.

This is about working together to ensure we are creating the strongest and most sustainable business relationships from source to store.

This brings us back to Brussels.

Right now, MEPs have a rare chance to shape the future of the trade in conflict minerals.

They can help companies source responsibly from some of the most fragile states on earth and ensure that the lives of millions of people are better off as a result.

Of course, there will be dissenting views and I welcome debate.

I just hope those talking on behalf of businesses remember one thing on Thursday: Strong conflict minerals legislation in Europe is a business opportunity that we can not afford to miss.

Peter Nicholls is a former vice-president in the Rio Tinto Group and the head global business authentication at Walk Free, a British-based foundation

MEPs divided on conflict minerals scheme

EU lawmakers have clashed over which businesses should be covered by new rules on the trade of conflict minerals used to fund civil wars.

Will the centre-right stand up for EU values?

Time for Christian Democrats in the EP to show where they stand on Hungary and on the EU's founding principles, say Human Rights Watch and Amnesty International in a joint text.

Europe needs more modern leadership

If Europe wants to be a global leader, our political leadership has to change dramatically. Power needs a new face in Europe, and it needs to get legitimacy from the people, argues liberal MEP Sophie in 't Veld.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  2. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  3. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  4. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  5. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  6. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  7. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  8. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  9. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  10. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  11. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  12. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow

Latest News

  1. Brexit and MEPs expenses in the spotlight This WEEK
  2. Wake-up call on European Day Against Islamophobia
  3. Sound of discord at 'Sound of Music' Salzburg summit
  4. Salzburg summit presses for bigger Frontex mandate
  5. UK's post-Brexit plan 'will not work', EU says
  6. Airbnb agrees to clarify pricing for EU
  7. Libya keeps coast guards rejected by the EU
  8. EU divisions on menu at Salzburg dinner

Stakeholders' Highlights

  1. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  2. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  3. Mission of China to the EUChina: Work Together for a Better Globalisation
  4. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  5. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  6. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  7. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  8. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  9. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs
  10. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  11. FIFAGreen Stadiums at the 2018 Fifa World Cup
  12. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development

Join EUobserver

Support quality EU news

Join us