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A Kimberley Process for tin? Not really

Last week, the Congolese government asked Amalgamated Metals Corp (AMC) and Traxys to begin buying tin again. Both companies had suspended mineral shipments in May 09 and Sept 08, respectively, for fear of being accused of indirectly supporting rebels who control the tin mines.Their boycott was a big blow – AMC subsidiary Thailand Smelting and Refining Co. was buying around half of all tin from the DRC. (Maybe the catastrophic decline in the world tin price had something to do with it, too). In any case, their boycott hit the tin traders in Goma hard.

The Congolese government says they have put a mechanism in place to certify that the tin sold by the buying houses (comptoirs) is not tainted with conflict. They have gotten together with the Tin Research Institute (ITRI) to devise a certification process. A word of caution ITRI describes itself as non-profit, but has the mission to “promote a positive image of tin and the tin industry through effective media communication and conference.” Thai Smelting Co and several other big tin companies are on its board .

So does it work? Having gone through ITRI’s proposal, I tend to agree with Global Witness, who published a news release on the topic today. The ITRI plan is basically for the industry to watch itself. Traders make their suppliers sign a form, where they check a box saying that the minerals do not come from rebel-controlled territories. I don’t think I need to say much more…

Incidentally, this idea is not new. After our UN Group of Experts report of December 2008, some trading companies based in Belgium had already asked their suppliers simply to sign a waiver, saying that they were not selling them any conflict minerals. Hear no evil, see no evil.

But let me use this to briefly address the problem of “conflict minerals” and the Congo. Over past months, campaigns have been building around the world to “get blood out of my mobile,” and other variants on the same theme. Senators Russ Feingold and Sam Brownback have introduced a bill in the US Senate to force US companies to disclose the country and – for Congolese minerals – the mine of origin.

First, the war was not started in 1996 by a bunch of blood-thirsty, greedy rebels. We need to move beyond these stereotypes and remember the complex history of the region. Domestic reasons for conflict in the Congo included the presence of a million descendants of Rwandan immigrants in Rutshuru and Masisi territories, conflicts of land tenure and access to economic and political power, and the collapse of neutral, efficient state institutions. The main regional cause was the presence of a million Rwandan refugees and militiamen in the Congo.

But once the conflict began, the presence of minerals and other resource did make it easier for armed groups to survive and raise revenue.

Today, all armed groups – probably first and foremost the Congolese army – benefit from the minerals trade through taxes, smuggling and protection money from traders. These are not the only rackets they run – anywhere there is an easily taxable commodity, especially in rural areas, rebels will tax it. By way of comparison, the annual charcoal trade around Goma is estimated to be worth $25 million a year, while the official export statistics for tin in North Kivu was $28 million in 2007 (actual exports were much higher). Customs rackets and road taxes are other sources of revenue for armed groups. The CNDP, for example, was able to raise at least $700,000 in taxes from the Bunagana customs alone.

We definitely should think about “due diligence” in the minerals supply chain. But what does that mean? There have been different proposals besides the ITRI one. Global Witness, for example, has called for a certification scheme that would be monitored by a third party (not the trader or the government) and would be audited regularly for compliance. The German government, through the German Federal Institute of Geosciences and Natural Resources, has begun a pilot program focusing on similar issues in Rwanda that it intends to extend to the Congo, possibly including laboratory “fingerprinting” of coltan to identify its origin. ENOUGH, a US advocacy group, has also called for a certification scheme.

I have my doubts about these certification schemes, as laudable as they may be. All of these initiatives rely on a local mechanism that can distinguish between conflict and non-conflict minerals. Such a mechanism would have to certify the minerals at the source, as batches from different mines are often mixed together far before reaching Goma or Bukavu.

There are thousands of tin, gold, tungsten and coltan mines in the Congo. The logistics of deploying enough monitors to all of these sites is difficult in itself. As we have seen, the monitoring currently carried out by the Congolese government can be easily manipulated and tampered with. This tampering can happen in the field – where militias can force ministry of mines officials to issue fake certificates – or in the trade centers.

So what can we do? I recommend a policing option. In other words, instead of certifying ever single bag that comes out of the mines, we rely on spot checks by an independent, third party. This kind of detective work is already being done by the UN Group of Experts, Global Witness and several local NGOs. We need to institutionalize this oversight and pour in more resources. The Congolese government could enter into a formal agreement with a third party monitor, who would report back to them on traders who are knowingly buying minerals from rebel-controlled mining areas (it could later be extended to investigate Congolese army officers involved in such rackets, as well). There would also be an agreement on the consequences of abuse, either through administrative sanction or criminal prosecution. This is basically the model of criminal policing everywhere in the world – we do not take a breathalyzer every time we get into the car – but if the cops stop up, we face heavy penalties.

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