Commission shies away from rules on conflict minerals

Call for European importers to disclose where they obtain their stocks, but no obligation.

The European Commission yesterday (5 March) proposed that the European Union should call on European importers of four metals and minerals frequently found in war zones to disclose where they obtain their stocks, but refrained from proposing an obligation.

The proposal was immediately criticised by proponents of mandatory and more extensive transparency requirements, including Judith Sargentini, a Dutch Green MEP who is the European Parliament’s rapporteur on the issue. Campaigners had also wanted more ‘conflict minerals’ to be put on the list.

US pressure

The proposal, which follows similar measures adopted in the United States in 2010, would apply pressure on more than 400 European smelters and refiners to demonstrate to their customers and the public the place of origin of their gold, tin, tungsten and tantalum.

The US rules, part of the Dodd-Frank package of finance-related legislation, cover the same set of minerals. It is, however, significantly, more challenging for business, imposing transparency requirements on all companies in the supply chain, including retailers.

The Commission’s proposal is more extensive geographically, as it is global in scope, while the US legislation applies just to the Democratic Republic of Congo and nine of its neighbours.

EU officials acknowledge that the Commission’s proposal is largely a reaction to the Dodd-Frank measure, as the US legislation applies to all companies listed on the US stock-markets, many of them European.

The Commission says that “only 12% of companies listed on EU stock-exchanges not directly subject to the US legislation refer to conflict minerals on their websites”. The lack of voluntary due diligence or disclosure in Europe is an argument emphasised by proponents of mandatory transparency requirement.

The proposal would need the backing of the EU’s member states and the next European Parliament to become law.

In 2012, in legislation similarly prompted by the Dodd-Frank law, the EU obliged energy and mining companies to provide details of their revenues, country by country.