Why Section 1502 of The Dodd-Frank Act Cannot Solve the Humanitarian Crisis in the Democratic Republic of Congo

Michael Davie, “Creusers” or diggers carving out a mine in hopes of finding cobalt
Michael Davie, “Creusers” or diggers carving out a mine in hopes of finding cobalt

Implemented by the United States Securities and Exchange Commission (SEC), Section 1502 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) addresses trade in conflict minerals originating from the Democratic Republic of Congo (DRC).[1] Conflict minerals include tungsten, tantalum, tin, and gold.[2] Section 1502 requires publicly traded companies in the U.S. to disclose whether any conflict minerals used in their products were sourced from mines controlled by rebel groups in DRC.[3] Congress intended Section 1502 to address the exploitation and trade of conflict minerals by armed groups as an attempt to bring peace to the “epicenter of the deadliest conflict since World War II.”[4] Such legislation, however, is insufficient to combat the extreme level of human rights abuses in DRC due to its focus on a common misconception.[5] Namely, conflict minerals directly cause relentless exploitation, sexual violence, and death.[6] In reality, the trade of minerals contributes to the ongoing corruption and abuses in DRC, but human rights violations collectively stem from deep-rooted ethnic and political tensions, land ownership, and a series of micro-conflicts.[7] Thus, the issue of conflict minerals is best examined on its own.

After its enactment, the SEC regulation affected nearly half of all U.S. publicly traded companies.[8] For example, companies had “10,000 to 50,000 suppliers and several layers in their supply chains.”[9] Yet, thirteen years later, the law proves futile when corporations and mining companies continue to commit human rights abuses.[10] Section 1502 requires companies to “perform a due diligence examination of the source of [conflict] minerals.”[11] Section 1502 leaves the door open for corporations and mining companies to continue using conflict minerals.[12] If a product originated from the use of conflict minerals, a company simply writes a description of which facility they used to manufacture the minerals.[13]

Section 1502 falls short because companies unwilling to be subjected to Section 1502 can “source their minerals from other parts of the world” where disclosure laws do not exist.[14] Companies can purchase conflict minerals from these foreign-owned mining companies with underground operations in DRC that are “severely polluting the air, poisoning the water, and contaminating the soil.”[15] As a result, communities are surrounded by a toxic, dangerous environment.[16] Mining companies often demand that their miners complete hazardous work with minimal compensation and zero safety procedures.[17] Children play a forefront role in the mining crisis, “us[ing] the most basic tools, and sometimes their bare hands, to extract the minerals,” resulting in frequent accidents or deaths.[18] Additionally, the minerals trade has worsened the rape culture in DRC, mainly due to “rebel groups compet[ing] for control of mining sites, … use[ing] rape as a deliberate tactic to control the population and drive locals away from the mines.”[19]

While such exploitation remains a critical source of profit for armed groups, [20] miners receive between one to five dollars a day, and Congolese citizens find themselves “dependent on an exploitative minerals trade.”[21] Western companies fuel this exploitation and child labor, as the electronics industry “consume[s] more than 60% of tantalum.”[22] Cell phones, laptops, and televisions – all devices heavily integrated into Western consumers’ lives – are composed of tantalum and derived at Congolese lives’ expense.[23] Further, Section 1502 fails to define “cobalt” as a conflict mineral despite its common extraction for purposes of lithium-ion batteries and rechargeable batteries for smartphones and electric vehicles.[24] DRC currently has the “world’s largest reserv[e] of cobalt,” but the demand for cobalt will also increase as clean energy technology increases.[25]

NGOs leading various clean mineral campaigns should strongly advocate for environmental standards to protect and ensure the well-being of miners and communities surrounding mines.[26] Specifically, NGOs can encourage companies to “purchase from direct sources” or even establish the use of “blockchain technology to trace minerals.”[27] Moreover, NGOs should “increase litigation against large-scale mining companies in violation of environmental standards and health and safety codes.”[28] Corporations should also be obligated to buy from sources with environmental standards “aimed at protecting people’s health and property.”[29] In the meantime, Section 1502 alone cannot combat the mineral conflict mining in DRC. Any legislation attempting to combat the mineral conflict in DRC should only center on the mineral conflict as a standalone issue.[30]

[1] Conflict Minerals, SEC Release No. 34-67716, available at https://www.sec.gov/files/rules/final/2012/34-67716.pdf.

[2] Conflict Minerals: 2022 Company Reports on Minerals Sources Were Similar to Those Filed in Prior Years, GAO-23-106295, ¶ 1 (Comp. Gen. 2023).

[3] Maz Chaffetz, Note: Disentangling Conflict and Minerals: How NGOs and Lawmakers Ought to Rebrand Their Flawed Narrative of Eastern Congo, 62 Va. J. Int’l L. 203, 205 (2021).

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Marcia Narine, From Kansas to The Congo: Why Naming and Shaming Corporations Through The Dodd-Frank Act’s Corporate Governance Disclosure Won’t Solve a Human Rights Crisis, 25 Regent U. L Rev. 351, 359 (2013).

[9] Id.

[10]Chaffetz, supra note 3.

[11] Narine, supra note 8, at 360.

[12] Emily Veale, Note: Is There Blood On Your Hands-Free Device?: Examining Legislative Approaches to The Conflict Minerals Problem in The Democratic Republic Of Congo, 21 Cardozo Int’l Comp. Pol’y & Ethics L. 503, 526 (2013).

[13] Id. at 524.

[14] Narine, supra note 8, at 392.

[15] Chaffetz, supra note 3, at 233.

[16] Id.

[17] Id.

[18] Veale, supra note 12, at 517.

[19] Id.

[20] Id. at 515.

[21] Enough Team, A Comprehensive Approach to Congo’s Conflict Minerals – Strategy Paper, Enough (Apr. 2009), https://enoughproject.org/reports/comprehensive-approach-conflict-minerals-strategy-paper.  

[22] Veale, supra note 12, at 515-16.

[23] Id.

[24] Chaffetz, supra note 3, at 207.

[25] Powering Change or Business as Usual?, Amnesty Int’l (Sept. 12, 2023), https://www.amnesty.org/en/latest/news/2023/09/drc-cobalt-and-copper-mining-for-batteries-leading-to-human-rights-abuses/#:~:text=The%20expansion%20of%20industrial%2Dscale,sexual%20assault%2C%20arson%20and%20beatings.

[26] Narine, supra note 8, at 365.

[27] Chaffetz, supra note 3, at 232.

[28] Id. at 230.

[29] Id.

[30] Id. at 233; See Nik Stoop et. al., More legislation, more violence? The impact of Dodd-Frank in the DRC (2018) (discussing how the short-term impact of the Dodd-Frank Act backfired between 2011-2012).