Dodd-Frank working? Or not?
A quick follow up here (we’re being hyper-efficient today due to travel) to our recent piece looking at a critique (or refutation) of conflict minerals legislation as it impacts DR Congo. Reuters (via Mineweb) brings us news that Dodd-Frank is in fact “curbing African warlords' presence around mines in Congo,” though its full impact unsurprisingly “remains unclear.” Most affected firms have apparently failed to specify the origin of their metals by the June deadline.
From the article:
Under the Dodd-Frank financial reform law, U.S. companies must try to establish the origin of four metals often used by rebel groups in the area to finance their activities.
Only five percent of firms making filings by a June 2 deadline traced the conflict status of the minerals used in their products, said Source Intelligence, a U.S. risk management firm.
A grace period means big firms can say they were unable to get information for two years, but campaigners urged them try harder, saying the law had already helped but could do more.
"Overall we've been disappointed with the response of companies, and the lack of meaningful information on the supply chain checks and risk assessments they are doing, although a few of the reports have been strong," said Emily Norton, assistant campaigner with Global Witness in London.
The electronics sector has been the most robust at tracing the source of its minerals, Norton said, holding up chip giant Intel as a rare company that had conducted an audit.
Campaigners say the law has had a positive impact in three of the four metals it covers -- tin, tantalum and tungsten -- while gold remained a problem. Many of the minerals are used in smart phones and other electronics goods.
"The law has triggered companies right along the supply chain to change their sourcing practices," Norton said.
The article goes on to discuss certification approaches in response to Dodd-Frank, the assessments of industry and NGOs of the effectiveness of the law so far, difficulties with compliance and enforcement, changes in patterns of military activity in DRC since its implementation, and alleged industry-wide shortfalls in due diligence. It’s well worth a minute of your time: check it out here.