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Editorial

As Congo faces economic backlash, SEC must define ‘conflict minerals’

ECONOMISTS CALL it the “resource curse.’’ Poor countries with precious metals are often dragged into war over them. For more than a decade, unscrupulous militias in the Democratic Republic of Congo have fought for control over the eastern part of the country, where the earth is rich with tantalum and tungsten - rare metals that are used in cell phones, electronics, and laptop computers.

In an effort to stop the militias, who have kept countless people in virtual slavery in the mines, a growing movement in the United States has been pushing companies to publicly disclose their supply chains for their metals to determine whether they were mined in conflict areas. That movement, which gained backing from both Christian conservatives and liberals, successfully pushed for a disclosure requirement to be included in the massive financial and regulatory reform law known as Dodd-Frank in 2010.

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But the Security and Exchange Commission has still not released the rules about exactly how companies must satisfy the disclosure requirement. The delay is bad for business, and it’s bad for the people of Congo. Some electronics manufacturers are avoiding Congo altogether. That punishes mines that are operating in a humane way, and blocks a path out of poverty for the Congolese, who desperately need one.

Other companies have actively worked to solve the problem. Motorola, Dell, Apple, and Intel, among others, participate in a “conflict-free smelters’’ program, which independently verifies the source of the supply. This week, the Massachusetts Legislature heard testimony in support of a state law that would disqualify any company that does not comply with the Dodd-Frank provisions from doing business with the state. If it passes, it would be the second state after California to send such a message.

Activists - including the Enough Project, Global Witness, and a local group called Congo Action Now - should be applauded for championing the cause of vulnerable people in a distant land. But activists should be careful with their message. If Congo becomes synonymous with “conflict minerals,’’ then companies might simply forgo doing business there altogether.

The good news is that the Dodd-Frank provision has already had an impact in Congo. It has forced those who buy minerals from Congo to investigate the conditions in the mines they purchase from. It has also spurred the Congolese government to pass a series of measures aimed at cleaning up human-rights violations. Since the law doesn’t outlaw the use of “conflict minerals’’ - it only mandates their disclosure - its chief value is symbolic. For that reason, SEC rules should be as simple and easy to implement as possible.

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