Why U.S. Leadership is Critical to Reforming the Mineral Trade in Eastern Congo

In mid-September 2010, President Joseph Kabila of the Democratic Republic of Congo (DRC) announced a comprehensive ban on mining in three provinces of the conflict-wracked Eastern Congo. During my recent visit to the region, the ban was a central preoccupation for most of the diggers, traders, government agents, and civil society representatives with whom I met. Many were skeptical of the sudden action, and many more fearful of the security and economic consequences of a long-term embargo on mining in the region. Kabila’s ostensible justification has been that the trade does not benefit local populations and that the ban on minerals will allow the government to rid the sector of the “kind of mafia” that currently control it.

 
Although Kabila’s real motives remain clouded, it is likely that increasing international attention on the role of conflict minerals in fueling Congo’s war and the recent passing of U.S. legislation designed to combat this trade in the Dodd-Frank Wall Street Reform Act influenced his decision. The timeframe for lifting the ban has not been made public, and beyond the decree, the president has done little to indicate a way forward within the sector. The DRC government has done nothing to help affected communities, and both illegal mining and human rights abuses continue despite the ban. If the ban has illustrated anything, it is the inadequacy of a haphazard approach to eastern Congo’s mineral sector, and the likely costs of a failure to establish a credible, effective, and sustainable minerals certification regime. 
 
Critics of the legislation are quick to decry the negative impact on livelihoods that could arise if private sector investors and companies walk away from the Congo, but as the impact of Kabila’s ban makes clear, it is unlikely that such action would actually cause mining activity to cease. Militarized extraction and black market trading would continue, with traders and exporters looking to eastern Europe, China, and other Asian economies for demand. Additionally, most major electronics manufacturers and component suppliers would not be able to simply withdraw extraction from the region. The significance of Congo’s mineral reserves is too great for world markets to ignore, particularly in the case of tantalum, which currently accounts for as much as 60 percent of the world’s global supply. Also, a steady, unregulated, and less-expensive supply of materials coming out of the Great Lakes region would have damaging effects on the global prices of these commodities. If U.S. companies are forced to find alternative sources, prices will increase and competitive advantage will go to companies and countries with less reputational risk that are willing to procure the cheaper Central African materials. Either way, companies affected by the U.S. legislation lose, giving them every incentive to ensure the speedy stand-up of a regional certification system that would enable the credible sourcing of responsible materials from the region and avoid such a scenario. 
 
The other imperative for more urgent and comprehensive efforts to reform the Congolese mineral sector is the looming crisis in marginalized mining communities in the three affected provinces. The small-scale mining sector in eastern Congo is responsible for a massive cash economy on which many Congolese are solely dependent; from the miners, traders, and comptoirs (licensed exporters of the minerals), to the small businesses and services that spring up and become dependent on these groups. Negative economic implications of an extended embargo will ripple through nearly every source of livelihood in the Kivus, Maniema, and north Katanga and, if not mitigated, could have enormous destabilizing effects on the region. Therefore, it is critical for the success of stability and security that international actors work with the Congolese government and private sector to develop a strategy to support communities around militarized mine sites. Elements of the strategy should include economic diversification, formalized employment in the mining sector, and alternative livelihood development. Ironically, plans to do just this were part of the government’s stabilization plan for the region, but have been held up as a result of the ban.
 
The U.S. government has taken a leadership role in focusing on Congo’s conflict minerals, thanks to bipartisan leadership in Congress, personal commitments from the senior-most levels of the State Department, and a groundswell of consumer activism. The passing of the conflict mineral provision in the Wall Street Reform Act now requires publicly traded companies that use designated conflict minerals in their products to report annually to the Securities and Exchange Commission (SEC), as to whether or not their sourcing of these materials directly or indirectly funds armed groups committing illegal acts in Congo or central Africa. The time pressure imposed by the legislation on affected companies to begin reporting on due diligence measures has galvanized industry, civil society groups, and governments in the region; as well as spawned similar initiatives in Canada and the European Parliament. These efforts have yet to cohere around a comprehensive certification scheme that would enable the responsible sourcing of minerals from eastern Congo and ensure that revenues benefit citizens of the region Under Secretary of State for Economic, Energy, and Agricultural Affairs, Robert D. Hormats has said, “Bringing an end to this war is one of the great moral issues of our time.” Secretary of State Hillary Clinton, along with others in the State Department and colleagues throughout the U.S. government, has underscored the need to address it urgently—“working with the business community, the government of the DRC, other governments, NGOs, and multilateral institutions.” Failure to mitigate the impact of an extended embargo would almost certainly lead to failure in reducing instability and violence in the region, and would severely cripple any efforts towards creating legitimacy in the mining sector.
 
Red flags emerging under the ban
 
Beyond the economic consequences of a mining embargo, a much more disturbing trend is beginning to emerge that could also exacerbate regional instability in both the short and long terms. Although the ban applies to both civilian and military entities, while moving through North and South Kivu, I heard multiple reports of armed groups, including the Congolese Armed Forces (FARDC), continuing to mine. In Goma, North Kivu, the majority of civilian miners had reportedly left the mines to head to nearby towns or other populated areas to seek work. However, the FARDC, not wanting to relinquish its control or exploitation of mine sites, began a campaign of forcing individuals from nearby communities to work the mines. Reports were given in reference to four mining sites in Walikale and one in Masisi. Many of those kidnapped were youth, some children, and inexperienced miners. At the Bisie mine near Walikale, a mineshaft collapsed, killing over 30 individuals, reportedly due to the inexperience of miners recently forced into service.  
 
In Bukavu, South Kivu, sources relayed that both the rebel Forces for the Democratic Liberation of Rwanda, or FDLR, and the FARDC continued to mine despite the ban. In fact, our team was turned away from being able to visit a privately owned mine south of Bukavu that just one month earlier was visited by the Enough Project’s co-founder John Prendergast and actress Ashley Judd as part of their joint awareness-raising trip to eastern Congo. The explanation we received from several accounts as to why we would now be turned away, was that the FARDC didn’t want any outside eyes to see the mining continuing to take place. Additionally, I found in Bukavu that two additional sites mining cassiterite and wolframite in the province were also reported as seeing the FDLR recruiting from local communities, paying up to $10 USD for individuals to join their ranks, just to maintain control and work the mines during the ban. 
 
These accounts offer a disconcerting glimpse of the types of challenges to security that may arise if a long-term embargo is willingly or unwillingly put in place. The artisanal and small-scale mining sector in Congo provides livelihoods for a huge number of Congolese, and if these livelihoods disappear, an enormous segment of the population will be left open to recruitment into armed groups, forced labor, prostitution or worse. It is critical to choke off and hold accountable those responsible for the worst abuses associated with mineral exploitation. At the same time, however, an unemployed and starving civilian population in the militarized mining areas is a powder keg waiting to explode. Without alternative livelihoods or support, these communities will be easy prey for the armed groups of eastern Congo who will continue to use them for labor and sustenance.
 
Alternative livelihoods
 
In conversations with a cross-section of those involved in the mineral trade in the region, three common areas emerged as central components of an economic diversification and alternative livelihoods strategy:
 
  • Agricultural production: Re-establishing the agricultural sector is essential. Agricultural production used to be the region’s primary economic driver; the region is fertile and primed for agricultural development beyond imagination. One need only to cross the border to Rwanda to see the possibilities. The first step towards the any re-establishment of agricultural production however must be stability and reduction of violence so that Congolese citizens can actually engage in agriculture unmolested by armed groups. 
 
  • Creating mineral processing centers: Creating local mineral processing centers to legitimize and create jobs in provincial urban centers is another method for mitigating the impacts of an embargo or illegal exploitation. The establishment of processing centers would not only create legitimate jobs in extraction and transportation at and around the centers themselves, but would also generate additional revenue to regional provincial and local governments by adding value and selling and trading a refined product, as opposed to the sacks and truckloads of raw materials that are being bought, sold, and smuggled now. If well managed, this additional revenue could be reinvested in infrastructure and other community-based initiatives.
 
  • Economic incentive for private investment and infrastructural development: Infrastructure development can play a critical role in attracting potential foreign investment and in creating employment for local communities. For instance, investment in medium to large scale private sector mining could spawn increased revenue and job creation in the short term in order to foster the stability that in turn would encourage longer-term growth.  Initiatives such as road building and development of communications infrastructure are critical to pave the way for potential foreign and regional investment.
 
Support and partnership with the affected communities around militarized mine sites must include contributions from the Congolese government, companies that benefit from the extraction in the region, and civil society groups in the West and in the Congo that galvanize concerned citizens and implement solutions that meet local needs. The longer the gap continues between embargo and alternative sources of income for mining communities, the greater the chance of failure in reducing violence and illegal mining, or in eliminating incentives to cheat any certification scheme.
 
The role of the United States
 
A strong message was repeatedly raised as I met with those involved in or victimized by the illicit mineral trade: the U.S. government must be a driving force behind developing a solution. And indeed, the United States has begun to expand its efforts. It is the swiftness and decisiveness of action, led by the U.S. consumer, which sparked legislation that is now being felt in the Congo. But, with the achievement of legislative victory comes the responsibility of following actions through to their intended consequences. The U.S. conflict mineral provision may have the unintended consequence of aiding in creating a period of embargo on conflict minerals in Congo; this will mean that, in the communities in and around the mines, things might get worse before they get better as armed groups make final attempts to extend influence or stockpile material. Therefore, it is imperative to prevent a long-term ban or embargo that would allow regional and international spoilers to continue to exploit instability and lawlessness. The Obama administration has made some positive strides by contributing funding for community-based projects and for the survivors of sexual violence through both the Department of State and USAID. Both agencies have also recently created key positions to focus specifically on conflict mineral extraction, conflict, and human rights in Congo. However, much more is needed and at a much higher level.
 
The key to achieving any of the reforms or development on the laundry list often prescribed by experts on the region—security sector reform, dismantling the FDLR, land tenure, infrastructural and private development—is creating the environment for that reform to take place. International action to demand accountability and transparency in the minerals trade creates a demand shock to the status quo that threatens the vested interests of the illicit networks that have prospered from the conflict trade, and creates an incentive for elites to submit to reform. Moreover, these efforts can be aligned with the political interests of President Kabila. First, he needs to deliver on the peace dividends he promised to his vote bank in eastern Congo, which so far have not been realized. Second, by gradually reducing illicit gains from the minerals trade and regulating the mining sector, he can increase revenue flows into state coffers. Finally, by delivering on its rhetorical commitments to demilitarizing the mining sector in the east, the government would also help to address one of the principal impediments to security sector reform—the massive patronage network within the criminal networks in the FARDC that profit from natural resource exploitation.
 
To increase engagement in mitigating the impacts of a mining ban, the U.S. should engage at senior levels in the regional conflict mineral certification process currently under way under the auspices of the International Conference on the Great Lakes Region (ICGLR). This 11-member-state regional governmental body has been working with governments, industry, and NGOs to develop a regional certification mechanism that would allow conflict minerals to be traced from mine of origin to the smelter or processor level. It is after that stage, from smelter to end-user, that the U.S. conflict mineral reporting requirements would then take effect. This process will be essential to changing the political and economic calculations of armed actors in the region, as buyers and exporters begin to refuse illegitimate material, and begin to build in the use of certified materials through contractual obligation. The U.S. can bring credibility and increased transparency to this process—two elements that currently hang in the balance. Building the political will to act in good faith among both government and private sector actors is an essential component to success, and the U.S. has the tools and relationships needed. At this moment, the Obama administration has the opportunity work both multilaterally within the regional framework of the ICGLR and on the ground with Congolese and donor development organizations. Three primary factors are converging that warrant more robust U.S. engagement:
 
  • Renewed diplomatic relations in the Great Lakes: The political and military relationships in the region have improved to the point where there is significant room for cooperation and dialogue. President Kabila and President Paul Kagame of Rwanda are increasing their security and diplomatic cooperation following years of mistrust. There appears to be growing political will in the region to tackle the problems arising from illegal mining in eastern Congo, as evidenced by the ongoing ICGLR process.

 

  • Calls for U.S. Leadership: The U.S. has played a role in both bringing about a regional diplomatic transformation, primarily through the recent rapprochement between the DRC and Rwanda, as well as pressure for regional certification of conflict minerals. In the Enough Project’s continued communication with regional governmental leaders, CEOs, and senior executives of affected companies, and in ongoing travels to the field, the question is constantly raised: “Where is the U.S.? They need to be doing more.” U.S. assistance is being sought—regional stakeholders would welcome, and are looking for, intervention.

 

  • The shift in commercial logic: The international push on conflict minerals has provided leverage on armed groups that did not exist until now. This push is a means to an end. Both Congo and Rwanda have begun to show signs that they understand that ultimately transparent, legal, and peaceful regional development is in their interest. Enemies of both regimes, as well as their own militaries, sustain themselves off the profits derived from resource exploitation, and their logic has shifted from violent extraction to legitimate development—the environment is less accommodating for those contributing to instability in Congo.

 

The culmination of these three opportunities has created a moment that should be seized by diplomats, corporate actors, and civil society as a means to reinforce efforts at good governance, transparency, and reform, all fundamental components to future peace in the Congo and the broader region. 
 
The road to hell
 
Time and again on our journey I heard miners, traders, survivors of sexual violence, doctors, lawyers, politicians, and international aid workers say the key to resolution is for the United States to step up immediately while the situation is ripe and exert its influence for reform on the ground and in Kinshasa. People in Congo recognize the connection between the mineral extraction in their country and the U.S. consumer, and overwhelmingly they welcome U.S. efforts in Congress, on campuses, in places of worship, and on the street to bring attention to the horrific suffering endured on a seemingly daily basis. The Great Lakes region of Africa remains one of the most pro-U.S. regions in the world. The citizens of these affected countries are overwhelmingly supportive and willing to embrace U.S. engagement and guidance. In this case they are crying out for leadership from both Kinshasa and from Washington. What happens if we don’t listen? Well, there’s a Samuel Johnson quote for that: The road to hell is paved with good intentions.
 

 


 

Aaron Hall is a Congo Policy Analyst for the Enough Project in Washington, D.C.
 

 


 

The Online Africa Policy Forum is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

Aaron Hall