Transparency on Congo Conflict Minerals Folded into the Financial Regulatory Reform Bill
May 25th, 2010
With the passage of the Restoring American Financial Stability Act (S. 3217) in the United States Senate, the Congo Conflict Minerals and the Energy Security through Transparency (ESTT) amendments have made it into legislation. However, as neither amendment was in the House version of the financial reform legislation, both amendments will be taken up by the House/Senate Conference committee which will work to reconcile the differences between the two bills. Both amendments were agreed to during the passage of the Restoring American Financial Stability Act in the Senate.
Senator Russ Feingold (D-WI) sponsored the Congo Conflict Mineral amendment (SA 3997) which was attached to the financial regulatory reform bill. The Congo amendment was originally known as the Congo Conflict Minerals Act of 2009 (S.891). The amendment will require companies to disclose to the Securities and Exchange Commission annually if the minerals in their products originated or may have originated in Democratic Republic of Congo or a neighboring country. Some of these minerals are key ingredients in laptop computers, mobile telephones and products such as video recorders. Companies would also report on their due diligence in determining the source and chain of custody to ensure activities involving such minerals did not finance or benefit armed groups.
Another amendment which was not included in final financial reform bill but was offered during debate in the Senate is the Energy Security Through Transparency amendment (SA 3732) sponsored by Senators Ben Cardin (D-MD), Dick Lugar (R-IN), Chuck Schumer (D-NY) and Roger Wicker (R-MS). There is a new push by advocates to try to get this important amendment, which was included in the House bill, to be conferenced into the final legislation. The amendment is drawn from the Energy Security Through Transparency Act of 2009 (S.1700). It targets companies listed on U.S. stock exchanges to disclose their extractive payments to foreign governments for oil, gas and mining in their regular SEC filings. This builds on the Extractive Industries Transparency Initiative (EITI) requirement that all extractive companies operating in an EITI implementing country must report their payments to the government. It also would make the U.S. an implementing country for the EITI, an international protocol that sets a global standard for transparency in oil, gas and mining.
These two amendments are important to millions of poor people in developing nations. Resource-rich countries are home to more than two-thirds of the world’s poorest people and have seen horrific acts of violence committed by those seeking to exploit those natural resources. Corruption and greed have oppressed thousands. If passed into law, these amendments would help shareholders and the concerned public hold corporations accountable for the important minerals they use from the Congo and foster greater transparency within the extractives industry.
Reconciliation of the two bills in the Conference committee will be underway soon. Due to the impact of these two amendments on certain stakeholders, negotiations are expected to be fierce, with strong pressure exerted by affected industries. Yet, the transparency called for in the legislation has the potential to decrease the violence afflicting the eastern Congo. It is vitally important that these amendments are included in the final version of the legislation.