U.S. Rep. Howard L. Berman, the Ranking Member on the House Foreign Affairs Committee, submitted the below remarks to be entered into the record for today's Financial Services Subcommittee on International Monetary Policy and Trade hearing, "The Costs and Consequences of Dodd-Frank Section 1502: Impacts on America and the Congo."
The statement follows:
The Democratic Republic of the Congo has been plagued for decades by civil war and violence. The hallmarks of this instability are well known: child soldiers, sexual and gender-based violence, indiscriminate mass killings, and other serious human rights abuses. Despite the fact that civil war formally ended in 2003, violence continues today and it is fuelled in part by the availability of valuable minerals to warlords and criminal elements of the Congolese army. They sell gold, tungsten, tin, and tantalum for millions of dollars, and these "conflict minerals" eventually end up in products such as cell phones and laptops that are purchased by American consumers.
Section 1502 of the Dodd-Frank Wall Street Reform Act, which I was proud to work on with Ranking Member Barney Frank (D-MA) and Jim McDermott (D-WA), is intended to sever the ties between violent groups in the Congo and the minerals that finance their activities, and create greater transparency with regard to international supply chains. It aims to raise awareness among Americans that our spending habits have a real impact on the lives of innocent people half a world away.
Some critics of the law say that it will result in a total ban on sourcing minerals from the Congo, thus hurting the very people we are trying to help. This is simply not true. The law would not prevent companies from importing any minerals from this region of the world. Rather, its purpose is to help both consumers and investors make informed decisions about the products they buy and the companies in which they invest.
This is not a new approach. For decades, Americans have demanded more information about the origin of the products they buy to help ensure that they were not produced with the use of child labor, inhumane working conditions, or environmentally destructive procedures.
I believe that companies looking to be good corporate citizens and to burnish their reputations should support this legislation. Indeed, many companies are already moving in this direction. Motorola, Apple, and Intel have all made efforts to procure conflict-free minerals from the Congo. For example, Motorola Solutions for Hope and KEMET are both establishing closed supply chains so that they can control every stage of sourcing and prevent rebels or corrupt government officials from profiting from their activities. I commend these companies and encourage their efforts.
However, other companies have said that implementing this law would simply be too difficult and too expensive. They are telling us that, sophisticated as they are, they have no idea where their materials come from. They are saying that if we ask them to be responsible, they cannot make a profit. I take issue with all of those statements. If this is the case, what makes them so different from companies already complying with the law? I would also be interested to know, based on the massive cost estimates they have calculated, what is the additional per-unit cost of a cell phone or other product, given the hundreds if not thousands of products that utilize the conflict minerals cited in section 1502?
The Congolese government has responded to this legislation by requiring companies to comply with OECD guidance on supply chain due diligence. The government has also reiterated that the military is prohibited from being involved in mining. With this legislation, we have started an important dialogue about how consumers, companies, and the Congolese Government can all play an important role in reducing violence and conflict in Central Africa. I recognize that conflict minerals are only a part of this puzzle, and that better, more accountable governance from the Government of the Congo is the only long term solution to insecurity and poverty in the country.
Finally, it is important to respond to critics who claim that Section 1502 was written without the support or input from the Congolese themselves. In fact, the legislation was supported by over 30 groups from the ReCongo, including the Catholic Bishops' Conference in the DRC, represented today by Bishop Nicolas Djomo. Furthermore, the groups who have been working to promote this provision, such as Global Witness and Enough, have done significant research on the ground to examine the impact of conflict minerals in the Congo. They have Congolese staffers, but also utilize outside experts who travel regularly to the region. I have found them to be a reliable source of information, and I thank them for their work.
In closing, I think it is very important that we use this hearing not just to discuss the costs of implementing Section 1502, but also to examine the human costs of not implementing the provision, and the real-world impact that would have on the people of Eastern Congo, who have already endured unthinkable violence and deprivation. As we evaluate Section 1502, we must not forget about or ignore the human rights basis behind the law.