Brussels, 16/06/2016 (Agence Europe) - After six months of intense negotiations, the European Parliament and the Council reached an agreement in principle, on Thursday 16 June, on the draft regulation proposed by the Commission in March 2013 to cut off the funding derived by military and armed groups in conflict zones - the Democratic Republic of the Congo (DRC) and the Great Lakes Region, amongst others - from mining and trading in tin, gold, tantalum and tungsten.
The MEPs have secured an agreement for all importers of minerals used in the production of high-technology devices (including mobile phones and tablets) in several industrial sectors (automotive, electronic, aeronautics, packaging, construction, lighting, industrial plant and tools, and the jewellery industry), as well as upstream foundries and refineries, with the exception of very small businesses, to carry out due diligence checks on their suppliers in order to stamp out a trade that pays for conflicts and human rights violations.
“We need to finally break the vicious cycle between trade in minerals and the financing of conflicts. It is a first step for the EU to make a real difference for people on the ground. We succeeded in pushing for mandatory measures instead of a voluntary system - a huge success achieved by the European Parliament”, commented the chair of the European Parliament's committee on international trade, Bernd Lange (S&D, Germany).
“The shared-responsibility approach has prevailed. It is extremely important that the recognition of existing and future due diligence industry schemes has become the central element of the regulation”, said the rapporteur, Iuliu Winkler (EPP, Romania). The agreement reached is an “excellent basis” for continuing the work towards an efficient and workable regulation, which truly serves the interests of the people and communities caught up in war and conflict, he added.
The Parliament persuaded the Council that due diligence checks, conducted according to the OECD due diligence guidelines signed in November 2012, should be mandatory for importers of tin, tungsten, tantalum and gold from conflict or risk zones. The Commission had proposed, and the Council had agreed to, no more than voluntary controls. Under the future rules, the competent authorities of the member states will be responsible for making sure that importers comply with this duty, as well as for laying down sanctions in the event that they do not, which will be monitored by the Commission.
However, the Parliament and Council agreed that the smallest importers (in dentistry, for instance) should not be obliged to comply with the regime, in order to avoid an unreasonable administrative burden. Additionally, recycled metals, existing European stocks and sub-products will not be covered by the future regulation.
The Parliament also secured an EU push for due diligence by companies whose products contain tin, tungsten, tantalum or gold in their supply chain. Big EU firms that make or sell such goods - i.e. those that are subject to the EU legislation on non-financial reporting (above 500 employees) - will be encouraged to report on their sourcing practices on the basis of a new series of performance indicators prepared by the Commission. They will also be able to sign up to a register to be set in place by the Commission and present their due diligence practices on a voluntary basis.
The agreement also requires the Commission to review and report to the Parliament and the Council on the effectiveness of the new legislation - both its impact on the ground and compliance by EU firms - and the Parliament has secured a revision clause which will directly involve businesses that produce downstream components and sell the finished products on the European market, so that it can consider additional obligatory measures if the regulation does not deliver the anticipated results.
The technical details of the agreement in principle concluded have yet to be finalised. Further trialogues under the Slovakian Presidency may be necessary to finally seal the deal before it is put forward for the approval of the Parliament in plenary, possibly before the end of the year.
Ultimately, the obstinacy of the S&D Group, which has pushed relentlessly since the start of the legislative progress for a binding regime to cover the entire supply chain, has largely paid off.
“At the beginning of the negotiation, the Commission and the Council completely rejected the idea of any mandatory compliance. Only upon the pressure of the Parliament, led by S&D, did we make a breakthrough and now companies will be obliged to analyse the potential risk in the origin of the minerals they trade with. This is a very important first step towards the accountability of European companies and that of the entire production chain”, said Marie Arena of Belgium, the negotiator of the S&D Group on this dossier.
“I firmly believed that we needed to go further from the beginning and impose binding rules on all players, from raw materials to finished products. However, if downstream businesses do not show willing in the examination of the initiatives set in place two years after the regulation enters into force, a revision clause clearly provides for the Commission to propose binding legislation for these companies as well”, Arena added.
Italy's Gianni Pittella, the leader of the S&D Group, welcomed the agreement on behalf of his group, hailing it as a first battle won, “striking a harsh blow to the militias that, in many regions of the world, especially in Eastern DRC, massacre, abuse and rape women and children in order to exploit the mining of the so-called 'conflict minerals'”. “The days of the 'Wild West' are numbered”, he concluded. (Original version in French by Emmanuel Hagry)