Time for a new Dodd-Frank?

BlogCorporate social responsibilityEthicsMining and raw materialsPrimary and Extractive+-

When the Dodd-Frank Act was passed in the US in 2010, it was seen as a huge leap forwards for corporate social responsibility (CSR) efforts.


Companies were required to disclose the use of minerals, such as tin, tantalum, gold and tungsten, where they originated from conflict zones in central Africa.


Countries like the Democratic Republic of the Congo (DRC) are a key source of such minerals but have also been beset by conflict, which has seen rebel groups control the mines, and the money, where these minerals are dug out of the ground.


The Dodd-Frank legislation sought to stem the flow of these funds to rebel groups through disclosures by the likes of Apple over where they source these minerals from.


Businesses argued that it would add costs, while non-governmental interest groups said that it didn’t go far enough.


Indeed, the scope of Dodd-Frank is somewhat limited.


Cobalt, a key component in smartphone batteries, is not officially classed as a conflict mineral under the legislation. Like tin, tungsten, gold and tantalum, much of the world’s cobalt comes from mines in the DRC.


An Amnesty International investigation in 2016 found that one-fifth of DRC cobalt is mined in small-scale operations that rely on child labour.


Meanwhile, an investigation by Sky News found that Chinese mining company Huayou was sourcing cobalt from the DRC from mines, which were using child labour. Apple came forward and admitted that some Huayou cobalt had made its way into its supply chain and immediately stopped operations with the mining company.


There is clearly an argument for the legislation to be extended to include cobalt.


However, it is not just other minerals that should be included, where they are sourced from should also be broadened.


In 2016, a Reuters report found that more than 500 businesses were indirectly sourcing tin from the Man Maw mine in Myanmar, a mine mired in conflict and owned by the UWSA rebel group placed under sanctions by the US.


While tin is regulated under the legislation, Myanmar is not.


There is clearly arguments to be made for the legislation to be extended. However, there are concerns that the legislation will be ripped up by president Trump. He has threatened to scrap Dodd-Frank, which which put a lot of progress on ice.


If the legislation is scrapped the hope will be that businesses continue to drive progress on their own outside of legislation. Fundamentally it is up to them to prove to consumers and customers that they are conscience of the impact they have on the world and that they are doing their utmost to drive progress.


This article is a piece of independent writing by a member of Procurement Leaders’ content team.

Rachel Sharp
Posted by Rachel Sharp

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