Legal action by the U.S. Chamber of Commerce threatens to protect business practices that are fuelling bloodshed in Africa.
Global Witness today condemned recent legal action by the U.S. Chamber of Commerce (the Chamber), National Association of Manufacturers (NAM) and the Business Roundtable to derail a law which seeks to curb violence in the eastern Democratic Republic of Congo (DRC).
On 21 November 2012 the industry groups submitted legal arguments to the DC Court of Appeals as part of the suit they filed against the Securities and Exchange Commission (SEC) on 19 October 2012 against Section 1502 of the Dodd-Frank Act.
The grounds put forward for the lawsuit are largely a rehashing of baseless arguments made by industry during the SEC’s extensive comment period in the lead up to the rule’s final release on 22 August 2012.
“It is clear to us that the industry’s legal attack of the rule is designed to protect profits over the lives of the people in the DRC. The industry’s claim that the rule is too burdensome does not hold up to scrutiny,” said Jana Morgan, Assistant Policy Advisor at Global Witness.
“Many companies have already begun implementation and are participating in industry-led schemes to determine the source of the minerals in their products.”
The industry associations claim that the due diligence required by the SEC for companies to determine if their mineral purchases are funding armed groups is ‘onerous’. However, companies are already taking steps to implement the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
The OECD Guidance is endorsed by a broad group of stake-holders including companies, governments, NGOs, and has been adopted by the Congolese government as a legal requirement. The SEC has referenced the OECD’s due diligence framework as the standard companies are expected to meet in implementing Section 1502.
Aggressive industry lobbying led to a sixteen month delay in the SEC issuing the final rule and contributed to a downturn in the minerals trade in eastern DRC.
This lawsuit risks causing further disruptions to the trade and may hamper efforts already underway to establish conflict-free supply chains in the region. As violence escalates in mineral rich areas between government forces and the M23 rebel group, it is critical that Section 1502 be swiftly implemented so that it can finally begin to contribute to the intended effect of reducing violence.