Fascinating take on violence & Dodd-Frank in DRC

Thursday, 26 June, 2014

Earlier this week, PhD researcher Christoph Vogel of the University of Zurich in Switzerland wrote a fascinating piece on ThinkAfricaPress. In it, under the slightly inflammatory banner Stop Fixating On Conflict Minerals, he examines the downside of transparency. It’s not a stance to which we at CSR21 can subscribe fully, given what we believe will be the longer-term  benefits around the world of Dodd-Frank and the like, but it is a reasoned and very interesting examination of the aspects of this transparency trend that we don’t hear about quite so often.

The Dodd-Frank Act, Vogel argues, has “not only had limited effect on militant groups, it has also undermined artisanal miners' livelihoods and local economies”.

Piecing together elements of the recent history of conflict in DR Congo--his speciality--Vogel examines the widespread argument that such major geopolitical regional developments as the collapse of the M23 rebel forces are partly due, in the words of John Prendergast, to "a series of actions designed to dry up the international market for so-called conflict minerals, which help fund the armed groups in Congo."

In taking this line, Vogel questions the validity of the notion of ‘conflict minerals,’ and argues against the popular take on the effectiveness to date of related “sanctions:

…the level of conflict in [eastern DRC] has actually increased since the implementation of the Dodd-Frank Act. Other research suggests that the amount of smuggled commodities from the eastern DRC has risen over recent years, partly to sidestep the Dodd-Frank regulations and because of a preceding mining ban.

And some reports suggest that even in [regions] where pilot projects are being conducted by the Tin Supply Chain Initiative (iTSCi) - a mechanism designed to control the supply chain through a 'closed pipeline' that cuts out 'illegal actors' - armed interference remains a major risk.”

There are various reasons, he goes on to argue, why “the association between minerals and conflict put forwards by certain advocacy groups and policy circles is overly simplistic if not misguided.” These include, most crucially, the fact that “minerals have never been a root cause of the conflicts that have shattered the eastern DRC… instability has typically been driven by contests over land, identity and citizenship and the related struggles over power and external intervention.”

This argument is qualified by the slightly disingenuous statement that while “the ruthless exploitation of minerals has been a constant feature of rebellions,” this isn’t of crucial importance because “mining has rarely, if ever, been militants' primary goal.”  Despite emotive language the core argument is sound: mining is just part of the picture. Rebel groups don’t focus exclusively on mines, they have other means of sustaining themselves, and the Dodd-Frank Act is “not the silver bullet some claim.” 

Well, we’d be inclined to agree broadly on that, though we wouldn’t take Vogel’s implied stance that the Act and the associated drive for transparency are not on the whole Good Things: we’re not even sure we agree in the context of DRC and we certainly don’t when you take into account the effect the Dodd-Frank can be expected to have on extractives globally.

However, there is another side to this discussion: Vogel also argues that Dodd-Frank has had other significant impact on the region. 8-10 million people in eastern DRC are “economically linked” to artisanal mining, he claims, and “these local actors say they were not consulted prior to the establishment of the Dodd-Frank Act and claim that their livelihoods have been severely undermined… and unlike for the rebels, alternative lifelines for artisanal miners are few and far between.”

While no evidence is given for representative surveys to back this up, it’s nonetheless a claim that’s easy to believe.

The corollary of all this, according to Vogel, is a difficult situation for artisanals: buyers have ignored mines not running traceability and certification schemes--the majority--leading to a de facto boycott of the rest and “mass unemployment and the collapse of local economies.”

In several mining villages, civil society organisations and spokespeople for the creuseurs (artisanal miners) say they have been waiting in vain for years for to be included in traceability and certification initiatives.

But in the meantime, mining production has either come to a halt or miners have looked for alternative options: usually either dealing with Asian traders who are less concerned by US legislation and OECD guidelines or engaging in smuggling, often in collusion with local armed actors.

Both of these options come with unfavourably low mineral prices - partly because the iTSCi and other initiatives lead to buyer monopsonies - meaning that even creuseurs who do manage to find buyers struggle to make ends meet, while others are simply pushed out of business.

Many of those forced to leave the mining sector and with few other options for employment join or rejoin militias.

We’re fully behind the argument that on-the-ground initiatives are centrally important to a scheme like this, and it’s good that there are voices out there making this argument. More depressingly, though, Vogel gores on to argue that “even where traceability and certification schemes have begun, the results have been mixed.”

For example, in the single site where the iTSCi's traceability scheme has so far been fully implemented - the tin mine of Nyabibwe, South Kivu - there have been technical problems linked to the chemical quality of the tin ore, logistical challenges, and the pits are frequently closed due to flooding. Despite being a flagship project for conflict-free minerals, Nyabibwe also remains marred by smuggling.

These are miserable arguments for anyone starting to feel optimistic about the future of extractives insight of what seems to be a trend towards more responsible outlooks, environmentally and socially. But we’d qualify this, while strongly recommending you read Vogel’s well-argued article. The situation in DRC is unusually complex, given that it's a failed state housing many of the world’s most commercially important sources of minerals in a region that has suffered terribly from endemic conflict of many stripes, involving a wide range of local, state and non-state powers, for many years now. It is unlikely that any initiative would act as a panacea here. But Dodd-Frank’s impact will be felt more widely, and we believe in a broadly positive way, than in DRC alone.

There’s a more pragmatic dynamic here too, as Vogel astutely recognises: “the simplistic connection of militias and minerals… has helped a great deal in getting the DRC into the focus of Washington, Brussels, and elsewhere.” Vogel doesn’t seem to like this because his deep understanding of the region means he’s fixated on the truth that the reality is much more complex. Well, when is it not? From out point of view, as an organisation founded by a PR guy, we’d be the last ones to question the need to be strategic in your messaging. 

Conflict minerals campaigns, Vogel says, “have failed to understand that mineral extraction is much more of a means for rebel groups than an end in itself.”  This may be true but in our opinion this truth is only a dealbreaker if you believe that Dodd-Frank etc will suddenly and magically bring about an end to conflict, which we don’t. We’re sure that Vogel is right to conclude that “the root causes, drivers and sustaining dynamics of the few dozen militias that remain in the region… need to be addressed”; sure they do. The argument's a peace-building one, and he says that tackling abuses and fraud in the DRC's mining economy won’t bring about peace. That’s probably correct. Likewise we agree that efforts against conflict minerals should attempt to avoid adverse effects on artisanal miners and their dependents. But we don't agree that this should always be the “ first and foremost” concern. And while we don't contest it per se, we’d also like to see evidence for Vogel’s contention that  miners "are by and large the biggest group hit by the Dodd-Frank Act, not the militias.”

As a resources site, we think that “cleaning up the mineral sector” is of central importance. This is what we’re about. And we don’t agree that the failure of attempts to do this to bring peace to DRC is a strong argument against their wider usefulness - or even against their relevance to DRC. We note that this isn’t Vogel’s explicit argument either, but intentionally or otherwise it’s inferred. We think that realising his wish for a solution that “takes into account the multi-faceted local web of economic interaction, and [which is] recognised to be one element in a intricate jigsaw and not the be all and end all’ is likely to happen through addition and refinement. Not through rejection of a milestone initiative that has, after years of effort, finally got a disparate group of actors pulling in the right direction.