"Africa is, indeed, coming into fashion." - Horace Walpole (1774)

8.08.2011

the Dodd-Frank catastrophe

David Aronson in the New York Times, writing on the effects of Dodd-Frank in eastern DRC:

For locals, however, the law has been a catastrophe. In South Kivu Province, I heard from scores of artisanal miners and small-scale purchasers, who used to make a few dollars a day digging ore out of mountainsides with hand tools. Paltry as it may seem, this income was a lifeline for people in a region that was devastated by 32 years of misrule under the kleptocracy of Mobutu Sese Seko (when the country was known as Zaire) and that is now just beginning to emerge from over a decade of brutal war and internal strife.

The pastor at one church told me that women were giving birth at home because they couldn’t afford the $20 or so for the maternity clinic. Children are dropping out of school because parents can’t pay the fees. Remote mining towns are virtually cut off from the outside world because the planes that once provisioned them no longer land. Most worrying, a crop disease periodically decimates the region’s staple, cassava. Villagers who relied on their mining income to buy food when harvests failed are beginning to go hungry.

Aronson blogs at Congo Resources.

What's so frustrating for people like me is that it was clear to most Congo experts that Dodd-Frank wouldn't play out as designed, but no one listened to us. Everybody who really knows the region - who lived there before, during, and since the wars, who speak the languages, who know local communities - understood that initiatives rarely work as intended in a place as complicated as the DRC and foresaw exactly these sorts of problems. We were vocal about it. And we were ignored.

I have puzzled and debated with many knowledgeable observers for the last few years over how the Enough Project works and how some of the very smart people who work there could come to conclusions that are so off-base. The conclusion I've come to is that information that comes into that organization is almost always filtered through the lens of John Prendergast's initial opinions. Prendergast decided early on that the story in the Congo was one about fighting primarily driven by resource extraction, and any information that contradicted that story had to be made to fit the pre-determined narrative. I don't have any way of proving that this is true, but I think it's fair to say that this is the consensus opinion about how Enough works by people who closely observe the organization. Feel free to disagree in the comments if you'd like.

If true, that's a terrible way to do advocacy. What's even more frustrating is that members of Congress like Jim McDermott and their staffs seem to have taken Enough's word at face value, going so far as to let the advocacy organization choose most of the witnesses at hearings on the Dodd-Frank measure, which meant that any dissenting voices - Congolese or American - went mostly unheard.

That's a terrible way to develop legislation. I realize that members of Congressional staffs are extremely busy dealing with hundreds of issues every day and that it saves time to let an advocacy organization plan most of the details of a hearing on one obscure topic, but there need to be a wider variety of voices on questions involving Africa - or any topic, for that matter. At the very least, I think it's reasonable to expect that people testifying before Congress on DRC actually speak French and spend regular, extended periods of time there.

It is beyond frustrating to have watched this completely avoidable catastrophe unfold when it was so evident that Enough has misread the situation in DRC and that the legislators who listened to them were going to unintentionally create the disaster Aronson describes.

At this point, I don't know what we do to help the families whose lives have been destroyed by Dodd-Frank. But it's time to start that conversation, and to have another on how we can avoid making these mistakes in the future. The Congolese deserve better.

21 Comments:

Anonymous Michael Kirkpatrick said...

Predergast has become the pied-piper of idealistic young students in the United States without anyone really talking about the fact that he used to be an intelligence agent specializing in Africa under the Clinton administration. Who's to say that the ENOUGH Project isn't some marketing and PR front for US foreign policy and military intervention in Africa? Does one really "retire" from intelligence? People need to look below the "do-gooder" surface of Predergast to discover his agenda.

Monday, August 08, 2011 7:59:00 AM

 
Blogger texasinafrica said...

I'm not one for conspiracy theories, and the degree of being flat-out wrong in their analysis by Enough suggests to me that they are most definitely not a front for American intelligence services. At least I hope my tax dollars are funding better intelligence collection than that.

Monday, August 08, 2011 8:31:00 AM

 
Anonymous Brett Keller said...

Intelligence agent? Do you have a source for that?

According to Wiki he worked at the NSC and State Department. Where else has he worked, and how do you know? (I'm curious - I'd never heard "intelligence agent" before.) There's a difference between working in the foreign policy establishment and being an intelligence agent...

Monday, August 08, 2011 9:00:00 AM

 
Blogger JK said...

As someone who attempts to straddle the often precarious line between the advocacy and academic communities, I agree that there is too often a disconnect between advocacy campaigns and real-time, objective, information gleaned from empirical evidence. This is even more true in regards to the legislation process.

So what could/should have been done to alleviate the very real problems in the DRC? I don't buy the conspiracy theory argument... I know people who work for Enough and they are well-intentioned and intelligent. But the DRC is complex, and far from the advocacy-policymaking circles of DC, where simple narratives rule the day. How could (or could?) U.S. legislation have helped in a more precise and relevant manner?

Monday, August 08, 2011 9:52:00 AM

 
Blogger texasinafrica said...

JK, the overwhelming focus on minerals was a mistake from the beginning - the argument was that this was a place where the US could have leverage and therefore worth pursuing. But the DRC conflict was never about minerals, not really - they are a tiny part of a much more complex story about citizenship, ethnicity, and land rights. Better legislation would have focused on strengthening government and governance in the DRC to help address those underlying issues.

Monday, August 08, 2011 10:31:00 AM

 
Anonymous Anonymous said...

As an activist jeweler, the plight of small scale miners in the Congo is an issue of great concern. Here is a letter we published from those miners expressing the negative effects of this bill:

http://www.fairjewelry.org/archives/4602

Marc Choyt
Director, Fair Jewelry Action, USA

Monday, August 08, 2011 12:09:00 PM

 
Anonymous Rebecca said...

Surprise, surprise-- the conflict minerals bill had unintended consequences... It's soo frustrating! When I first started looking into this issue many years back, I had the same initial gut reaction as what the Enough project advocates-- but that bubble was eventually burst as I learned more about the situation. I don't understand why they stick soo tightly to that one narrative. It doesn't seem to make any sense, especially since they have people on the ground there.

Monday, August 08, 2011 2:50:00 PM

 
Anonymous Scott said...

The op-ed is incredibly sloppy in that it does not mention that the Congolese government banned the trade, not Congress. This is the sloppiness you object to in NGO advocacy, and you should equally object to it here. It was not a de facto embargo--it was de jure!
This does not change the fact that a serious conversation should be had regarding how NGOs interact with experts.

Monday, August 08, 2011 4:50:00 PM

 
Anonymous Scott said...

What legislation would you write that would strengthen government and governance? And do you disagree that transparency in the mining sector can contribute to good governance?

Monday, August 08, 2011 4:52:00 PM

 
Blogger Nell Okie said...

I left a comment earlier, which was not posted???

Monday, August 08, 2011 8:06:00 PM

 
Blogger Nell Okie said...

I apologize - my error. It was posted under your previous post.

Monday, August 08, 2011 8:08:00 PM

 
Blogger texasinafrica said...

Marc, thanks for passing that on.

Scott, I think it was clear from the op-ed that the de facto embargo was an unintended consequence of the legislation. Aronson says that pretty clearly in paragraph two of his piece. He's not referring to the actual embargo that was placed on the mineral trade out of the Kivus and Maniema for six months (Sept. 2010 - March 2011) by Kabila, but rather to the situation that is now happening in which companies are refusing to buy Congolese minerals because it's too difficult to verify that they are conflict-free.

On improving government and governance, I'll reiterate what I've posted here many times before - there are serious limits to what US legislation can achieve in the DRC. That said, I think we could put more resources and effort into security sector reform (especially in training and professionalizing the FARDC), improving the justice system as a whole (not just in the sexual violence sector), and in helping to sort out the property rights mess.

I think the transparency and good governance issue is a chicken-egg type of question. There's no question that you need better governance for transparency to work. It seems unlikely to me that putting transparency first will lead to the latter, but we'll have to wait for evidence on that point.

Tuesday, August 09, 2011 11:27:00 AM

 
Anonymous Scott said...

Many thanks for the response.

Aronson does say clearly that it was an unintended consequence of the legislation. But he doesn't mention that crucial intermediary step. I just think that any serious conversation has to recognize the actual embargo imposed by the government, and it is misleading to attribute all the impact on the sector to legislation requiring reporting.

I also agree that the question about the effect of the legislation cannot be sorted out in a year. There near term harmful effects are clear, but there is certainly some possibility that this is on the road to long term beneficial effects.

Tuesday, August 09, 2011 5:41:00 PM

 
Anonymous Tom Cushman said...

This problem has its initial and so far biggest effect on ASM in the Congo but Dodd Frank also requires reporting from US listed companies of minerals sourced from 8 adjacent countries. This will impact the willingness of manufacturers to source from those African countries and will lead to a fall off in business for them too.

Wednesday, August 10, 2011 4:49:00 AM

 
Blogger texasinafrica said...

Tom, totally agree and we are already seeing those effects in Rwanda.

Scott, I think that's a fair point, but I also don't think there's any reason to believe that a de facto boycott wouldn't have happened from April 1 on regardless of what Kabila had done (or, in this case, hadn't done). It is so difficult to trace where the minerals come from in east DRC and to verify that they are what their sellers say they are that it's likely that companies would have stopped buying then if not before. That might have slowed down these negative effects (eg, now miners would only have been out of work for four months rather than eleven), but it would still be bad and ultimately the same outcome.

Wednesday, August 10, 2011 9:25:00 AM

 
Blogger katelmax said...

Enough has posted a response here: http://www.huffingtonpost.com/sasha-lezhnev/what-conflict-minerals-le_b_922566.html

Response to that? I am too exhausted by reading to attempt to critique it.

Wednesday, August 10, 2011 11:14:00 AM

 
Blogger texasinafrica said...

katelmax, I left a comment as "Laura_centralAfrica" at the bottom of Sasha's post. Why my name is that on HuffPo I can't remember.

Wednesday, August 10, 2011 12:08:00 PM

 
Anonymous Anonymous said...

What do you make of Jason Stearns's comment? "If we can hold companies accountable for their business practices, we will give an incentive to the Congolese government to clean up the mining sector. The “conflict minerals” legislation signed into law by President Obama in July 2010 is a step, albeit a small one, in the right direction" (Dancing in the Glory of Monsters, 303-304).

Wednesday, August 10, 2011 12:17:00 PM

 
Blogger texasinafrica said...

Anon @12:17, Jason and I are friends and I have huge respect for his opinions, but this is one place we disagree. He might be right, but so many people benefit from the mining sector not having its act together that I think the government faces an uphill climb on this one. In particular, the question of Rwandan access to minerals looms huge in my mind. Most observers believe that the deal between Kagame and Kabila that ended so much of the violence in the east in part involves an agreement over Rwandan access to the minerals (the agreement was verbal, so there's no way to confirm this, but Rwandan export numbers strongly suggest that they are definitely still getting DRC minerals somehow - there aren't that many mineral reserves in Rwanda). That's an important and tenuous peace; any plan that disrupts it could have dire consequences.

Wednesday, August 10, 2011 9:28:00 PM

 
Blogger marshall said...

Re: the de facto embargo, two electronics industry associations leading the industry efforts to work on this issue (EICC and GeSI) announced voluntary conflict-free documentation efforts effective April 1 back in September 2010, and these have arguably driven the de facto embargo. The government ban, announced about the same time, actually derailed some industry certification efforts that had hoped to be up and running by that point. A decent summary is available at the GeSI website here: http://bit.ly/olv5Wy

Thursday, August 11, 2011 12:57:00 AM

 
Anonymous Brett Keller said...

Jason has some follow-up thoughts up at Congo Siasa (http://congosiasa.blogspot.com/2011/08/thoughts-about-conflict-minerals.html)

Looks like this discussion will be continuing for some time...

Thursday, August 11, 2011 6:05:00 AM

 

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