The European Union (EU) Commission’s Trade Directorate has proposed a voluntary self-certification scheme that would set up a “responsible importer” scheme for firms exercising due diligence over commodity supply chain for conflict gold and the “Three Ts” – tin, tungsten, and tantalum and their mineral ores. The voluntary self-certification scheme would require companies to exercise due diligence to demonstrate that their products’ mineral components did not finance human rights abuses, and would offer incentives ranging from EU public procurement contracts to funding possibilities for small and medium-sized enterprises (SMEs).
The proposed scheme will only apply to companies placing raw materials on the market – such as Europe’s 20 or so smelters – and not importers of products such as mobile phones, which may already have had the materials installed. Under the EU proposal, member states would have to nominate competent authorities to receive information and perform checks and audits (within the scheme) under the five steps of the process laid out in the Organisation for Economic Cooperation and Development (OECD) Due Diligence Guidance.
In proposing this voluntary scheme, the EU appears to have listened seriously to IPC and other industry players who have highlighted the difficulties experienced by companies attempting to comply with the 2010 U.S. Dodd-Frank Act, which obliges U.S. Stock-Exchange-listed firms to disclose minerals sourced from the DRC.
The EU’s Trade Directorate, which prepared the new regulation, sees it as a complementary law to the U.S. legislation that would concentrate on “upstream” actors and avoid imposing an extra burden on small European businesses. To increase public accountability of smelters and refiners, enhance supply chain transparency and facilitate responsible mineral sourcing, the EU plans to publish an annual list of EU and global “responsible smelters and refiners.”
The European Parliament, whose development committee passed a non-voluntary proposal on 19 February, could try to add more strict provisions to the proposal when they take it up in September. IPC and other interested parties will need to continue to stay engaged and support cost-effective measures.
IPC is actively engaged in advocating on behalf of our members and has met with EU Commission officials to urge them to proceed cautiously before implementing conflict minerals legislation especially in light of the negative, unintended effects of Dodd-Frank. In October, Signe Ratso of the EU Commission spoke at a conference hosted by IPC in Brussels. IPC members can view her presentation here.
IPC will remain actively engaged in the conflict minerals issue and will continue its advocacy efforts to promote conflict minerals legislation that avoids actions to unduly burdens manufacturing and commerce industries or cause unnecessary disruptions of the minerals trade. For more information about IPC’s advocacy and position on conflict minerals, visit IPC’s Conflict Minerals webpage.