Painting by Cheri Samba

Lokuta eyaka na ascenseur, kasi vérité eyei na escalier mpe ekomi. Lies come up in the elevator; the truth takes the stairs but gets here eventually. - Koffi Olomide

Ésthetique eboma vélo. Aesthetics will kill a bicycle. - Felix Wazekwa

Sunday, March 20, 2011

Pressure on US universities grows to de-fund conflict minerals

Numerous US student groups have launched initiatives to prevent universities from investing in or purchasing conflict minerals from the Congo. Stanford University, the first to take concrete steps last year by passing proxy voting guidelines, is now hosting a conference from April 8-10 to share experiences and strategies and to plan further actions.

These initiatives fall within the spirit of the US legislation passed last June. The Dodd-Frank bill does not punish companies for buying or using conflict minerals, instead imposing fines if they fail to publish what kinds of efforts they are taking to determine where their minerals are from (in "Conflict Minerals Reports"). In other words, the legislation will criminalize the lack of transparency, not the use of conflict minerals.

Hence the importance of private actors, such as universities. If universities - some of which have huge endowments - begin divesting from companies that use conflict minerals, these businesses will change their behavior.

This is the spirit in which universities such as Stanford have passed proxy voting guidelines, which mean that if a shareholder vote comes up with regards to this issue, Stanford will vote against the use of conflict minerals. It's an important, albeit symbolic step - it is unlikely that such a vote would come up in the first place, but it still sends a strong message.

The University of Pennsylvania is pursuing another route, this past week issuing a statement saying they would not purchase electronics from companies that are not members of the Electronics Industry Citizenship Coalition (EICC), which include most major electronics companies and has said its members will stop purchasing minerals from the eastern Congo in April this year if they are not properly tagged and traced. The U Penn initiative was also made following pressure by students.

Yale University, where I am involved in a similar initiative, is considering writing to major electronics companies it invests in (it has a $17 billion endowment that it invests) to ask them to adopt OECD guidelines in their due diligence efforts. If companies do not adopt thee guidelines, or if they are found to be in violation of the SEC rules or using conflict minerals, we would ask Yale to divest.

Will these initiatives have an impact? Hopefully, but it all depends on how this US-based pressure impacts the situation on the ground. Ideally, this pressure will create incentives for suppliers in the field to pressure the Congolese government to demilitarize key mining sites - after all, most large mining areas are now controlled by the Congolese army - and set up sound tracing schemes. At the same time, pressure would grow for the Congolese army to chase non-state armed groups out of other mining concessions and sanitize them, as well, for international trade. This would lead to less corruption of the Congolese military and greater incentives for demobilization for other armed groups. Some pilots for tracing schemes are under way, although the mineral export ban by the Congolese government between September 2010 - March 2011 brought a halt to those initiatives.

But there is another possibility: that the pressure in the US will just lead to a boycott of the Congo by endusers in the US, pushing trade to the domestic Chinese and Indian markets. Tens of thousands of Congolese jobs could be lost in the short-term and in the long-term little would change, as the endusers in Asia would probably not care much about due diligence. The authors of the conflict minerals bill say that these are scare tactics, and that western companies will continue to buy from the Congo, but I am less certain. Several Congolese organizations - including BEST in Bukavu and Pole Institute in Goma - are critical of the Dodd-Frank legislation and say the Congolese government and the industry need more time to implement the requirements.

The only way that we can ensure that activism in the US can have a positive impact on the situation in the Congo is that donors actively engage with the Congolese government to help demilitarize mining zones (perhaps starting with the lucrative Bisie mining area) and set up tracing schemes. If we don't do this, our efforts here in the US could backfire.

Unfortunately, there seems to be little movement in this direction by the US government. The Dodd-Frank bill required State Department to come up with a strategy for conflict minerals, including through support to the Congolese government, and State (after a long delay) finally brought out a short paper two weeks ago. I will post it later, but it does not appear to contain any new concrete diplomatic or institutional initiatives - a lot seems to be riding on the World Bank's Promines program.

12 comments:

LNFAW said...

http://lnfaw.blogspot.com/

Jonathan said...

Great initiatives indeed! Just hope that it will have some effect in my home region.

Anonymous said...

(rest of post)

This may sound simplistic to you given you study every element of this remarkably complex region of the world. As activists trying to encourage fellow Americans to take action on the Congo, however, we must avoid these complexities and clearly explain why so much of this beautiful land is marred by violence, rape, poverty and corruption and what they can do about it. Therefore, the goal cannot be “get donors to get the Congo to do X, Y, and Z” since your average American is clueless about donors, the Congo, and the intricate politics of Kinshasa and the region. It needs to be: getting rid of this corrupt and oppressive government that is empowered by your Ipad.

We leave the complexities to analysts like yourself which is deeply appreciated and I personally look forward to your book tour hitting Atlanta. Please leave strategy and tactics to the activists and organizers.

Today at 3pm we have a very important meeting with Congressman John Lewis of civil rights fame. Do wish us luck and we promise to encourage him and his staff to reach out to you as an expert.

A meeting with board members of Emory is next week.

Melissa

Anonymous said...

Thanks for sharing our work at UPenn!

For those interested in finding out more about what we are doing please check out our website at www.pennsid.org/congo

I cannot agree more with Jason, there is a limited range on what parts of the issue activists can act on, but that does not mean we should lose sight of the bigger picture.

No one wants to see a complete and devastating embargo of the region. We should all be sure to include this key caveat in the publicity events we hold and documents we publish on conflict minerals.

Ben Brockman
Penn Conflict Mineral Campaign

Anonymous said...

Great post, Jason.

While I certainly support the efforts of universities and am excited to see our young take up this cause, I agree with Melissa entirely.

As I have implied on other occasions, the goal of long time activists of the Congo- both here and in the country itself- is to remove Kabila and the black hole of corruption that ensnares the bulk of its political class.

At the heart of that black hole is the lust for wealth that is realized by the clandestine nature of the mineral trade. I would too be entirely satisfied if the aggressive implementation this law shut down the entire trade and thus removed the incentives that have led to the deaths of millions, the rapes of thousands, and a good deal of the nation struggling to get by on barely a dollar a day. This may seem extreme but do we honestly believe that a more transparent mineral trade in the Congo, alone, will lead to a Congo that releases the full potential of its people?

I will submit that a more long lasting goal of activism in the US and abroad should be what a good deal of what most of the nation’s preeminent liberal interest groups (as opposed to the helpful but narrow efforts of Enough and FOC) has been since we began our efforts in the fall- namely, encourage the Congolese themselves in this election year to demand from all who seek to lead them a clear platform that forces this trade out in the open and provides assistance to the growing list of rape victims.

By developing the capacity of the Congolese to “work” their democracy by holding their representatives accountable we will do far more good than simply trying to change the behavior of its leaders. Pressure must come from above (us tightening the screws on the regime) and below (the people of the Congo demanding more accountability of its leaders).

If we fail to do both we will fail the Congolese.

Bryce

William said...

Great book, I would recommend it to anyone going to Congo for any reason. It was startling to me that the people there (I was in the DRC for 7 months in 2010) were as resilient and vibrant as you describe. It's especially difficult to comprehend considering the poverty that I saw and the recent history that you record. I agree, the Congo does "cast a spell on many visitors." Good work, and thanks.

haris said...

fantastic book , you are right about there is really pressure in the US that will just lead to a boycott of the Congo by end-users in the US, pushing trade to the domestic Chinese and Indian markets.

john said...

good work on posts , keep it up , congo is wonderful place channel tonight

chris said...

congo is grate place and I would recommend it to anyone going to Congo for any reason
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