The Congo, minerals, and the electronics industry
Something that industry is going to hear more about is the “Dodd-Frank Wall Street Reform and Consumer Protection Act,” which was signed into law by President Obama on July 21, 2010.
The Act includes a raft of measures arising out of the recent financial crisis and runs to 2,300 pages!
Last year there was a bill in the US Senate known as the “Congo Conflict Minerals Act of 2009,” which was similar.
The Congo conflict mineral issue has been heavily debated on both sides and has now made it in to the Dodd-Frank Act.
The section on conflict minerals requires that companies, principally US listed, that are Securities and Exchange Commission (SEC) registered disclose annually whether it has used relevant minerals from the Democratic Republic of the Congo or an “adjoining country,” so-called conflict areas.
If a company did use conflict minerals from such countries, it will also have to submit a report to the SEC describing how it exercised due diligence on the source and chain of custody of such minerals, including an “independent private sector audit” of such a report, as well as a description of the products manufactured that contain such conflict minerals. This information would have to be made available on the company’s Web site.
The minerals covered are: columbite-tantalite (coltan), cassiterite, gold, wolf-ramite, or their derivatives, or any other mineral determined by the Secretary of State. The electrical products industry has a major use for materials covered by this legislation and many of the components will come from China where one source of the raw materials will be the Congo. National security applications have an exemption limited to two years.
It is worth noting that very few of the Act’s provisions take effect immediately. The vast majority require various regulatory agencies to issue implementing regulations with specified periods. The section dealing with conflict minerals refers to regulations being produced not later than 270 days after the Act was passed. While the SEC has not yet published any posed rules under the Dodd-Frank Act it must promulgate the regulations within approximately nine months (April 2011).
However, before that they need to publish a draft proposal, possibly in December or January, allowing for public comment. Such periods of review are typically 60 or 90 days. In the meantime the SEC has started soliciting unofficial public comment through its Web site.
So the Dodd-Frank Act will create yet another data collection requirement for an industry already struggling to cope with REACH, ROHS, and other such electronics supply chain legislation.
Premier Farnell, the company I work for, has been asking its suppliers for confirmation of use of conflict materials for a while as there is little doubt that customers down the electronics supply chain will seek reassurance that no metals are sourced from the conflict areas or if a product is labelled “conflict mineral free” that it does not contain any of the conflict minerals that directly finance or benefit armed groups in the Congo.
What do you think of this Act? Share your comments below.
Vertatique commented:
There should be no doubt in anyone's mind that conflict minerals contribute to horrible abuses of human beings by helping fund an endless and brutal war which has killed more people than any since WWII.
The US has typically lagged other countries in such matters RoHS, now we're actually out in front of an issue about the content of our electronics devices.
More on conflict minerals, including Come Clean for the Congo video:
vertatique.com/cassiterite-coltan-and-hidden-cost-edevices
William Ketel commented:
J. Williams is RIGHT! Aside from that, perhaps it would be better to simply stop using the minerals in question. Of course, that suggestion is based on not knowing just what they are used for. After all, we already have an excess of small electronic junk, and we really don't need any more of it. Of course, those industries that produce and market it might not agree. So how about just letting the public decide? WE can still do that in the USA, at least, sort of.
Reality check commented:
J. Williams and others of who blame the recent financial crisis on other than the long term erosion of government prohibition of monopolies, banking, manufacturing and otherwise by those who proclaimed they are for "Free Enterprise", are missing the boat.Instead of "Free Enterprise", the more appropriate moniker would be freedom from regulation to prevent banking and corporation mergers to the point of monopoly and being "too big to (let) fail (because the financial system would collapse)". But that doesn't make it as a sound bite, does it?
Take a look at Gramm-Leach-Bliley if you want to find out where the seeds of financial disaster were sown. And it was the ruling party of the last 30 years that did it, not the party conjured up by the "blame-it-all-on-Obama" GOP spin doctors.
Ali commented:
Why so concerned about the Congo? What about the Chinese slave camps. What about human rights abuses in China? Oh but China is populated by Asians, not Africans, so the hypocrite Democrats couldn't care less. If anyone cared about human rights, no company would be buying or selling to communist or islamic countries. You're just hypocrits.
P. Mc commented:
Many posters here just don't get it. Cutting off sales outlets for blood-metals will of course hurt the relatively few people actually working in that industry but does take away one of main big reasons for the ongoing conflict, that is, the mineral rich territories within the Congo being fought over. If only normal business practice prevailed then those workers could be re-employed at probably higher wages.
And if you think a race to the ‘cost floor’ with China is a race the US can win, think again. Better to take the tiny hit on gdp and stay on higher moral ground.
I can also say that as a user of materials procured through Chinese companies, we will take the new regulations seriously and audit suppliers accordingly.
Paul P commented:
Actually the act does not restrict a company from using materials from the Congo. It simply must report that it is using materials from this region. Based on my reading none of the NGOs want to stop companies from using materials from the Congo as these industries provide jobs and income for the people in this region. That said it is just another one of the growing reporting requirements being demanded in the industry!
Michael D commented:
I gladly see that politics is moving - but feel ashamed that so many colleagues (Betsy is one of the rare exceptions) still put profit higher than respect of essential human rights.
I gladly embrace that law and hope there are more to follow - putting long-term pressure on oppressive regimes where it hurts the most: the wallet.
J.R. commented:
Mr. J. Williams,
Agreed, but it doesn't matter much which side wins in November. The result is always the same: more laws, more regulation. Businesses will continue to relocate their factories off-shore. The tide will turn, but probably not within our lifetime.
Phil H commented:
I don't doubt that a whole lot of people are having a very bad time in Congo.
One wonders, however, whether their lives will be improved by making it impossible to earn a living there. If you think things are pretty bestial now, just wait until _everyone_ is desperate.
Another in the shameful list of misconceived left wing programs--do the thing that makes you feel virtuous, regardless of its actual consequences.
M. Brown commented:
If the standard for doing business in the US is that we do not do business with countries where atrocities are taking place, then we would not be buying oil from anywhere in the Middle-East.
I assume that you subscribe to Doc Holiday's notion of "my hypocrisy only goes so far".
We also would not be doing business with China.
We hold our nose at a lot of things that other nations do, because we cannot afford to unilaterally restrict ourselves from business.
This issue is an international issue that every member of the UN should be addressing.
Scott commented:
Guys, if what Betsy B. is saying is true and this mining is funding the rape of women, child labor, murder, and slavery, then we should support this effort to stop it. We should be ashamed that American firms are not doing this voluntarily and that it takes the government to help stop this. There are some things that are more important than profit margins. Don't you think? I am a big supporter of smaller government and less regulation, but this provision of the bill seems worthwhile to me.
M. Brown commented:
Unilateral enactment of more bureacracy at a national level is rather foolish. Everyday, the United States makes it difficult for US companies to compete internationally because big players overseas are not enacting the same standards for their companies. Part of the reason that China, for instance, has done well is that they don't follow many international standards that the US and other countries adhere to.
Originally, it was reasoned that they needed time to catch up with the west and that burdening them with the same regulations pertainting to pollution, health and safety that the west does would make it too hard for them to compete. Obviously that time has passed.
If the US government is going to force US companies to conform such regulations, it needs to be sure that our biggest economic rivals conform as well. China, specifically, does not require any special consideration.
We cannot afford to have our companies be hamstrung by altruisms any longer.
old semiconductor exec commented:
All the leaders of American semiconductor industry have manufacturing, process and RD&E managers, who are directly responsible for the on-going development, testing and use of alternative materials and sources for each and every process of each product line in case of catastrophic environmental, political or terrorist events,etc. Rare, exotic and single-source materials are typically stockpiled (1-5 years)and/or "designed out" of the process or product as soon as possible. Moreover, for the past 5-10 years highly toxic, carcinogenic chemistries/materials (non-"green")have been systematically reduced and/or eliminated throughout the electronics industry. Many of the "Gripers" work for older companies that have old/obsolete manufacturing technologies, equipment and/or product lines (and are squeezing the last nickle out of them),...and are too damn cheap, dumb or complacent to do the on-going RD&E, testing & planning necessary to have timely delivery of appropriate replacement materials by another source.
Betsy B. commented:
I, for one, cannot believe what I am reading above.
The United Nations has clearly indicated that conflict mineral mining (or Coltan, as it is more commonly refered to), is directly and indirectly funding the rape of women, child labor, murder, and slavery. Are we seriously asking US Corporations to fund this sort of activity in the DRC? Or would we all be willing to pay $0.10 more for an electronic device to ensure that this does not happen?
As a woman manager in an electronic company, and a mother of three children, I certainly do not want a single child to loose his or her childhood, or for my $ to fund rape, child labor, murder, or slavery, anywhere in the world.
This addendum to the bill requires all US electronic companies to ensure that they, or any of their suppliers, or their suppliers suppliers, do not buy conflict minerals from the DRC. With the current existence of proven, low cost technology that can link raw materials to their mining source, this should not be an issue.
I am glad that US Senators and Congressmen have finally woken up and decided to do something about this!
Drew commented:
During a recession we ADD costs and regulation of dubious value? How will that make the world better? These guys really do NOT get it. The man on the street in Congo won't be thanking us, but our competitors who don't have these useless regulations will. As James Madison said, "I cannot endeavor to lay my finger on that clause of the Constitution which enables me to take from one man to give to another for the purpose of charity".
J. Williams commented:
These A-holes in Congress have NEVER considered all the implications of their actions. They simply don't care. If it sounds good (politically), they'll do it. Dodd and Frank are the twits who set us up for this last financial crash. I don't know who in their right mind would support anything these nit-wits have to say. The political ruling class in this country never seem to be affected by the excrement pushed out of the Congress on to an only-too-willing clueless president for signature. November can't come soon enough.
