A Conflict mineral procurement bill for Oregon
Oregon should institute responsible electronic purchasing through the enactment of a state procurement policy to require that all state-level purchases take into consideration the presence of conflict minerals when purchasing electronics.
The Never Again Coalition, Oregon Coalition for Humanity, Amnesty International USA and Enough Project are all committed to supporting peace in the Democratic Republic of Congo (Congo). We believe that transparency and stability in the mining sector in Congo will help to ensure that armed groups cannot profit from violent and illegal mining practices, which in turn stunt local communities from economic growth.
We ask for your support for Senate Bill 471, introduced in the 2019 Session of the Oregon Legislative Assembly. .
Why Is this Change Needed?
The ongoing conflict in the Congo has resulted in the deaths of more than 5.4 million people - more than any conflict since World War II. Millions have been displaced, citizens continue to be terrorized, and rape is used as a weapon of war.
Conflict minerals have fueled and continue to help sustain the ongoing conflict. Armed groups have generated hundreds of millions of dollars by illegally extracting and smuggling tin, tantalum, tungsten, and gold (3TG). These minerals eventually end up in consumer products such as computers and cell phones. Companies have the opportunity to contribute to peace in the Congo by making sure that the minerals they use in their products do not come from areas controlled by armed groups. But they will not take action unless their consumers require it.
Consumer activism is essential to ensure that companies and industries as a whole prioritize conflict-free sourcing. State-level legislation is a powerful way to amplify individual consumer activism by institutionalizing the demand for conflict-free products. The public expects that tax dollars should be spent on procuring products produced by companies with strong ethical standards.
Passing a Conflict Mineral Procurement Bill in Oregon
By passing SB 471, Oregon would become the fourth state in the country to enact legislation that places a preference on companies that are working to source conflict-free minerals for their products.
This bill will link to existing international guidelines and reporting mechanisms that companies should already be implementing. Therefore, the infrastructure is already in place for implementing an Oregon policy and should not place an undue burden on the State or on businesses.
The History and Future of Conflict Mineral Regulation
For decades, activists and affected communities in Congo have called attention to the links between their country’s minerals and its protracted armed conflicts. To the many communities historically impacted by the violence and lawlessness surrounding Congo’s 3TG mines, the need for transparent supply chains has been clear.
The regulation of the 3TG minerals has developed as a result of pressure from end-user companies, other stakeholders and legislative action, all of which when combined, have contributed to a significant decrease in violence and exploitation in mining areas.
In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act became law. Section 1502 of Dodd-Frank, also known as the Conflict Minerals Act, was established to break the link between minerals and armed groups in Congo through creating a transparent supply chain for 3TG minerals. The rule simply requires all publicly traded companies to report if 3TG minerals sourced from Congo can be found anywhere in their supply chain. It does not require a boycott, nor does it require sanctions.
Since 2010, we have seen the infrastructure required for companies to audit their supply chains develop and prosper. Companies such as Intel, Kemet Electronics and Signet Jewelers have remained committed to sourcing from conflict-free mines in the region.
Change doesn’t happen overnight but it is clear that the creation of transparent supply chains has made a remarkable difference in the 3T mining sector in Congo. In 2016, a study found that 79 percent of miners at 3T mines surveyed in Congo now work in conflict-free mines. This is a major change, as the UN stated in 2010 that "almost every mining deposit was controlled by a military group.
Despite support from the tech industry, consumers, and Congolese civil society, Section 1502 is under threat by the current US Administration, and may be rescinded. There is good news though. The same disclosures that Section 1502 requires for companies using 3TG minerals in their products are the same guidelines in the Organization for Economic Co-operation and Development (OECD) Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High Risk Areas. The OECD is an intergovernmental organization and the guidelines it has put in place will continue regardless of what happens to 1502. We suggest that an Oregon state procurement bill use the OECD guidelines.
Support for a Conflict-Free Mineral Policy for the State of Oregon
The City of Portland - Portland City Council included SB 471 in the City’s 2019 Legislative Agenda.
Oregon Businesses - The following Oregon businesses support a statewide conflict-free mineral policy:
Trios Studios, based in Lake Oswego, has been a leader in the way the jewelry industry conducts business globally - supporting fair trade gems, protecting miner’s rights, and supporting transparent supply chains for gems and minerals.
Portland’s TechForm Advanced Casting Technology is the industry leader in the casting of platinum group metals. Sustainability is a top priority for TechForm. Consideration of sustainable practices is a part of the daily fabric of their business operations.
What other conflict-free mineral procurement policies are there in the US? Maryland, California and Massachusetts, as well as 25 schools and six cities (including Portland) have implemented policies supporting conflict-free minerals trade and peace in the Democratic Republic of Congo.
Portland has since strengthened its policy by adopting a new sustainable procurement policy (Resolution Number 37379) that is more robust and shifts the implementation of the Conflict Minerals components from a reliance upon federal legislation to using international guidelines set out by the OECD.
The federal government adopted new procurement standards in March 2018, requiring all federal government agencies to consider key conflict mineral provisions in purchases of all computers and monitors. These include due diligence, whether the company is helping build the conflict-free trade in the Democratic Republic of Congo and the region, and whether the company is sourcing from audited, conflict-free smelters. This important step, which our partners, the Enough Project contributed towards during the consultation phase, complements the Dodd-Frank 1502 legislation.
How will this affect Portland and other cities in Oregon’s procurement of electronics? In August 2015, Portland City Council voted unanimously to approve Resolution 37150. The initial implementation of this policy was focused on the City’s purchasing of cellular devices and radio transcriber units. The city surveyed makers of these devices to determine if conflict minerals were present and took preference to purchasing products that were conflict mineral free. On August 22, Portland City Council approved a new overarching policy of sustainable procurement. We supported the changes as the new incorporated policy is broader in scope and expands the conflict mineral procurement resolution. We continue to work with the City as they work to both broaden and strengthen their policies. The City of Portland can only benefit from a statewide procurement policy as it will make purchases for the City that much easier. Procurement for many other cities in Oregon is tied to State purchasing agreements. A statewide policy will allow other cities in Oregon to become “conflict mineral free” also.
How does compliance affect the Tech Industry? A study by Elm Sustainability Partners, an independent advisory firm, found that implementation costs related to federal conflict minerals reporting requirements for businesses have been substantially lower than expected. In fact, US companies have seen “tangible business benefits.” According to Elm, compliance costs are 74-85% less than the initial SEC estimate. While the SEC projected $3-4 billion for total company costs, Elm estimates costs at $600-800 million for all companies. Additionally, these costs have dropped significantly as new tools and processes have been developed which streamline compliance.
What does Congolese civil society have to say about conflict minerals? Janvier Murairi Bakihanaye, a Congolese civil society leader and activist working in the mining areas of North Kivu said, “As a native of Democratic Republic of Congo (DRC), I have seen first-hand what things are like on the ground – gang-rape, modern child slavery and other flagrant human rights violations on a massive scale, affecting scores of victims, especially in eastern DRC. Some people may not understand how a U.S. law related to corporate supply chain sourcing practices could help stop this horrific, decades-long conflict. However, I am writing to explain how the Dodd-Frank Act has done much to reduce violence in my country. It is one of the main reasons why armed groups no longer wield the power they once enjoyed.”
Why should you support SB 471, creating a Conflict Mineral Procurement Policy for Oregon? Consumer activism is essential to ensuring companies and industries as a whole prioritize conflict-free sourcing. State-level legislation is a powerful way to amplify individual consumer activism by institutionalizing the demand for conflict-free products. By passing SB471, Oregon would become the fourth state in the country to enact legislation that places a preference on companies that are working to source conflict-free minerals for their products.