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

8.11.2011

links on conflict minerals

One point most of Section 1502's defenders are making is that Dodd-Frank does not call for any boycott of Congolese minerals. This is true, but it is also true that it is highly unlikely that either the government boycott of last September or the EICC-driven boycott would have happened were it not for the legislation. An unintended consequence can be a direct consequence, and this is such a case.

There must be a better solution for now-unemployed Congolese miners that will enable them to support their families with meaningful employment over the long term. Starting a fund, as Leshnev suggests, will only create dependency and further impede long-term sustainable development in the region. The advocates who pushed for Section 1502 need to take responsibility for all the effects of their efforts, not just the intended ones.

15 Comments:

Blogger Daniel Solomon said...

This comment has been removed by the author.

Thursday, August 11, 2011 3:42:00 PM

 
Anonymous Anonymous said...

"Starting a fund, as Leshnev suggests, will only create dependency and further impede long-term sustainable development in the region."

Strarting a fund is not a bad idea at all depending on how the money is used.

The DRC could of course be the bread basket of africa.

http://www.afribiz.net/content/leveraging-the-drc-for-agricultural-opportunities-in-africa

Thursday, August 11, 2011 5:43:00 PM

 
Anonymous Tom Cushman said...

Before DRC becomes the breadbasket of Africa it will have to stop being the basket case of Africa.

Starting a fund as suggested by well meaning consultants could be a great idea.
After many strategy meetings and requests for donations (from whom?) Im sure the fund will find a way using reasonably paid NGOs to distribute some money to someone.
In the long run a fund is a good idea if you wont/cant let miners mine and you can find someone to give you money for it. Of course in the long run we are all dead and perhaps the issue might better be resolved differently in the short run.
I am confident this issue will be resolved, but not as imagined by Dodd Frank supporters.
Nature abhors a vacuum and so does business. If there is product and workers there will be work.
Minerals will be produced if that is the sole income opportunity. They will be sold to whomever will buy them and someone will come to buy them. Someone who does not care about or respect Dodd Frank. And they will pay less because the buyers who do respect Dodd Frank will be absent.
In my many years of experience working in ASM (not just as a consultant)the best, the very best, way to improve miners and mine communities livelihoods is to increase the numbers of buyers. Formal buyers are best but any kind of buyer competition will improve producer prices. Increasing the number of formal buyers also marginalizes those buyers, dealers or comptoir owners who make outsized profits by monopolizing the market.
Formal buyers need security and unless and until there is real security in the mining camps and markets those markets will belong to those who can provide their own security.
This situation is not going to improve until DRC gets control of its country and since that does not seem likely anytime soon you may expect it to get worse.

Miners by their very nature live in the expectative. They know there is a chance (small) that they can hit it big and score enough to change their life. Even without a big score they make many times more than subsistence farmers or herders.
Gangsters live in the expectative too and if young, aggressive, brave men dont have a legal avenue for their expectations they may easily go over to the dark side. That would be yet another unintended consequence of Dodd Frank.

Friday, August 12, 2011 4:35:00 AM

 
Anonymous Anonymous said...

Or maybe they could all fly over to Madagascar where you act as a middleman between government and mining interests Cushman lol.

Your whole argument is flawed the mineral trade in the DRC has not lacked for buyers. In the past the whole world has been queuing up.

Just been less obvious at times due to middle men and the length of the supply chain.

More middle men and smuggling means less money in the miners hands. Cleaner trade in the DRC means more buyers paying higher prices.

“This situation is not going to improve until DRC gets control of its country and since that does not seem likely anytime soon you may expect it to get worse.”

Follow that kind of philosophy and nobody would ever attempt to improve things unless they did not need improving!

Friday, August 12, 2011 5:52:00 PM

 
Anonymous Tom Cushman said...

Dont get your knickers in a twist Anonymous.
The reason I have the job I do in Madagascar is that both government and industry trust me and I know what Im talking about.
As you say, in the past there were buyers in DRC but there arent now and that is the problem today.
I like formal buyers best and most buyers would prefer to be formal. Keep in mind the goods dont just leave the country of origin they have to arrive in another country and formality makes that easier. I could not agree more that cleaner trade means more buyers paying higher prices.
I also like middlemen. They are part of the eco(nomic) system and they deserve to make more money too.
A safe place to work where the miner and the middleman and the international buyer can all fill their niche would be an ideal world.
I dont think acknowledging the security problem of the Congo is a philosophy. I do think improving internal security in the Congo is not merely the solution to the mineral problems but a host of others as well. I'd wager the Gov of the DRC thinks internal security is their biggest issue too.
Since you seem to know me you will know that I have been working for years to improve incomes and competencies of small scale miners and dealers as well as working with government to improve their management of the mineral sector. Ive had some successes and some set backs. These days working under a coup regime things are a little more difficult but Im still managing to help the little guy make a little more money.

Saturday, August 13, 2011 11:48:00 AM

 
Blogger Salil said...

Thanks. This is a difficult one. You ask advocates of 1502 to take responsibility for all the effects of their efforts, not just the intended ones.

By that logic, shouldn't the mining companies take responsibilities of all effects, and not just the intended ones, which means accountability for the conflict and the mass gender-based violence, in which they run the risk of being complicit, by their association with warlords in the area?

It is not my case - or many responsible organizations' case - that companies intend the conflict to continue. But that is the effect. It is a question of choosing between two evils - and anything that helps reduces conflict deserves support.

Saturday, August 13, 2011 6:05:00 PM

 
Blogger texasinafrica said...

Salil, two points: 1) I think the advocates should be more responsible in this case because the unintended consequences of their actions were predictable - and predicted. By ignoring people who disagreed with their version of how events would play out, they were seriously irresponsible. So I do think it's fair to hold them responsible. 2) Had these actions helped to reduce conflict, that would be one thing. But they haven't, and the long-term prospects for peace in the DRC are not good. The reason is that the violence is not, as the advocates claim, predicated on the mineral trade, but rather on the land, citizenship, and identity issues. The violence against civilians will continue, no matter how it is financed. By taking away their livelihoods, they've now been made worse off without reaping any net benefits in terms of security.

Saturday, August 13, 2011 9:23:00 PM

 
Blogger texasinafrica said...

I don't disagree that the mining companies should behave as responsibly as possible, but that doesn't mean shutting down operations and harming the local economy as they are now doing. There are alternatives to the way this is being done - some of which were underway and have now been disrupted by 1502 - that were supported by segments of industry.

Saturday, August 13, 2011 9:26:00 PM

 
Blogger Salil said...

Thanks. I agree that advocates should not claim that the proposal they offer - 1502 - will end violence. All it can do, as I argued in my Guardian piece, is to impose costs on the "bad guys". That is desirable. With all its flaws, Kimberley Process managed to do that. (Of course, KPCS was helped by UN sanctions on one hand, and a very precise definition as well as a product that's not essential for human survival. DRC minerals have many uses, and are more essential, than, say, diamonds, which have an elastic demand.

That said, the end-result of the "livelihood" argument is to never have any sanctions, because any form of sanctions would mean the livelihood of some poor will be affected. That would be fine, if there was global consensus on surgical military action, arms embargo, prosecution of war criminals, etc. None of that exists. In such a context, smart, surgical, targeted sanctions make sense. And for that reason, sanctions in the DRC, if imposed properly, can help.

To reduce conflict in E DRC, then, you need (a) impose arms embargo, (b) increase troops with peace-enabling responsibilities, and (c) prosecute the war criminals. Of course, that would have a real effect. But at the same time, steps need to be taken to prevent those who are aiding conflict from stop doing precisely that. Since Nuremberg, there are precedents in holding non-state actors accountable. (Please look at the FAFO-International Alert initiative, www.redflags,info, about liability risks for businesses in high-risk zones). In reducing conflict, there has to be a concerted effort, and each step should be considered.

Sunday, August 14, 2011 8:10:00 AM

 
Blogger Salil said...

And I agree; companies have other ways of operating responsibly. The OECD tool can help. The World Gold Council's initiative can help. The Responsible Jewellery Initiative is another step in that regard.

Sunday, August 14, 2011 8:12:00 AM

 
Blogger texasinafrica said...

Thanks for your reply, Salil. I guess my question would be why a sanctions regime on the mineral trade is a necessary condition for securing the peace in east DRC and where the evidence is that such an approach actually works. There's already an embargo on arms (that doesn't work) and the situation involving war criminal prosecution is improving, albeit at a glacial pace.

I actually disagree with the claim that the Kimberley Process has helped; we don't have enough data to know. Peace efforts were already underway in Sierra Leone by the time it went into effect there, so it's incorrect to claim that Kimberley ended that war, and Angola continued unabated until Savimbi was killed. It's far from clear that mineral sanctions regimes ever really work to end conflict as rebel movements are able to tax local populations.

I know there are some human rights groups working on legal challenges to the companies sourcing minerals this way. But in the end, I remain unconvinced that these initiatives will actually improve life for average Congolese people.

Sunday, August 14, 2011 8:45:00 AM

 
Blogger Salil said...

Thanks again.

What we know from the experience of sanctions is that (a) blunt sanctions don't work; (b) smart sanctions sometimes work; (c) smart sanctions are better than military intervention for a range of reasons, some having to do with morality, some having to do with realpolitik.

Unless the suggestion is that there should be no action other than military intervention, there is need for some form of action from the international community to demonstrate its disapproval over what's going on. Unless your position is that one should never intervene - that's a position that can be argued at an intellectual level, but I don't think you are suggesting that.

An effective certification mechanism can be good for the DRC because (a) it will help establish some form of governance in an ungovernable area, and over time, create a source of revenue (legitimate) for the state (as against being aid-dependent).

True, the arms embargo hasn't worked, but it has rarely worked - which is a failure of the international commitment - but does it mean no other step be considered? As for the situation regarding war criminal prosecution improving - I suppose it gets subjective here, but the movement is glacial, as you correctly point out; the Anvil case also shows that local options which need to be exhausted first, aren't sufficient.

On KPCS - I have contributed chapters in two books, in which I have mentioned KPCS's limitations and desirability. There is data to show that "illicit" diamonds reduced in raw numbers of imports into Antwerp since KPCS, although there is a mood now, that since SL/Liberia are at peace, do we still need KPCS? (Also, KPCS's inability to deal properly with the Zimbabwe question also complicates matters. But to fix Zim under KPCS you need to redefine conflict diamonds.

I didn't say KPCS ended the war. I said i imposed a stiff cost on the rogue traders.

The human rights groups which would like to see prosecution of companies or other complicit entities are doing so in order to prevent bad behavior in future. They do so in order to ensure that the perverse incentives for the "bottom feeders" are reduced, if not eliminated. The long term consequence of that is, of course, improved lives for the poor in the area, who would not live in fear of armed groups or security guards.


I know there are some human rights groups working on legal challenges to the companies sourcing minerals this way. But in the end, I remain unconvinced that these initiatives will actually improve life for average Congolese people.

Sunday, August 14, 2011 9:07:00 AM

 
Blogger Salil said...

Sorry, that last paragtaph in my past response was yours, not mine. My response is:


Thanks again.

What we know from the experience of sanctions is that (a) blunt sanctions don't work; (b) smart sanctions sometimes work; (c) smart sanctions are better than military intervention for a range of reasons, some having to do with morality, some having to do with realpolitik.

Unless the suggestion is that there should be no action other than military intervention, there is need for some form of action from the international community to demonstrate its disapproval over what's going on. Unless your position is that one should never intervene - that's a position that can be argued at an intellectual level, but I don't think you are suggesting that.

An effective certification mechanism can be good for the DRC because (a) it will help establish some form of governance in an ungovernable area, and over time, create a source of revenue (legitimate) for the state (as against being aid-dependent).

True, the arms embargo hasn't worked, but it has rarely worked - which is a failure of the international commitment - but does it mean no other step be considered? As for the situation regarding war criminal prosecution improving - I suppose it gets subjective here, but the movement is glacial, as you correctly point out; the Anvil case also shows that local options which need to be exhausted first, aren't sufficient.

On KPCS - I have contributed chapters in two books, in which I have mentioned KPCS's limitations and desirability. There is data to show that "illicit" diamonds reduced in raw numbers of imports into Antwerp since KPCS, although there is a mood now, that since SL/Liberia are at peace, do we still need KPCS? (Also, KPCS's inability to deal properly with the Zimbabwe question also complicates matters. But to fix Zim under KPCS you need to redefine conflict diamonds.

I didn't say KPCS ended the war. I said i imposed a stiff cost on the rogue traders.

The human rights groups which would like to see prosecution of companies or other complicit entities are doing so in order to prevent bad behavior in future. They do so in order to ensure that the perverse incentives for the "bottom feeders" are reduced, if not eliminated. The long term consequence of that is, of course, improved lives for the poor in the area, who would not live in fear of armed groups or security guards.

Sunday, August 14, 2011 11:30:00 AM

 
Anonymous Anonymous said...

“There are alternatives to the way this is being done - some of which were underway and have now been disrupted by 1502 - that were supported by segments of industry.”

Are you kidding most if not all those efforts would not even have existed if it was not for the pressure put on by enough and other agencies.

How many years did the mining and smelting industry have to clean up their acts?

The main problem with one alternative was the mining companies did not want to cough up the peanuts amount of money needed to them to keep it going.

This in the middle of a mining boom when the big mining companies are awash with money.

http://www.itri.co.uk/pooled/articles/BF_NEWSART/view.asp?Q=BF_NEWSART_322005

However, an estimated shared financing commitment of $12 million over a three year period is required, to enable the scheme to be self funding by the end of 2013 as a result of increasing mine production and trade from the region. Of this, US$1.5 million is required immediately to enable the commencement of the Katanga programme.

Further funding of around US$5 million will also be required once the mining suspension is lifted and the project can continue in North and South Kivu and Maniema. (tin price has tripled in five years was four times the price recently).

http://www.itri.co.uk/pooled/articles/BF_NEWSART/view.asp?Q=BF_NEWSART_323150

Kabila said he wants to boost state revenue and improve labour conditions by replacing independent miners, who account for almost all of Congo’s tin ore, with larger mining companies.
(Seems to have been missed by lot of commentators that Kabila may have his own reasons for his mining ban).

http://www.itri.co.uk/pooled/articles/BF_NEWSART/view.asp?Q=BF_NEWSART_323268

Traxys may work with Malaysia Smelting Corporation to develop tin mining in DR Congo, Bloomberg reported.

MSC and DR Congo Mines Minister Martin Kabwelulu announced last month that they were discussing a joint venture

http://www.enoughproject.org/blogs/traxys-and-conflict-minerals-congo

Rather than trusting these nefarious actors to somehow clean up their act on their own...the United States should vigorously support support a comprehensive solution for Congo mineral trade one that includes.... and improved livelihood options for miners.

Stopping buying minerals from eastern Congo is not the solution: companies, the DRC government, and the U.S. government need to be part of a comprehensive plan to clean up the trade and develop serious alternative livelihoods for miners. (also missed that enough had already pointed out the need for possible alternative livelihoods for miners).

Seems a big problem with your comments on the conflict mineral issue Laura is you know very little if anything about the mineral side.

Hope you are not letting contacts from the big mining companies lead you astray.

P.s tried to post this several times now wonder how many other people are being blocked from posting?

Sunday, August 14, 2011 12:47:00 PM

 
Anonymous rental mobil said...

Nice article, thanks for the information.

Wednesday, August 17, 2011 10:52:00 PM

 

Post a Comment

<< Home