On March 16, the European Parliament Plenary Session endorsed the agreement reached with the Council on a draft regulation for a supply chain due diligence by importers of minerals and metals originating in conflict-affected and high-risk areas. A debate was held the day before, when MEPs welcomed the new rules, but cautioned that proper implementation of the regulation is necessary for it to bear fruit on the ground. Please find more details below.
Iuliu Winkler (EPP, RO), rapporteur for the file, was satisfied with the European Parliament’s work on the file. The importers of tin, tantalum, tungsten and gold must carry out mandatory due diligence in order to check their suppliers and prevent armed rebels or human rights violations being financed by illegal revenue. The interests of communities and people caught in wars and conflict were our priority. The new regulation has the power to improve reality on the ground in conflict areas. The European Parliament aimed to help the people affected by illegal mining and trade conducted by armed groups and, second, to increase the responsibility of all stakeholders, including European industry, in a common effort towards transparency.
The recognition of due diligence schemes proposed by industry associations and responsible sourcing partnerships has become the central element of the regulation. All industry initiatives must fully comply with the international OECD due diligence guidelines elaborated to help companies respect human rights and avoid contributing to conflict financing. It is important that all companies, including those from downstream in the supply chain whose products contain 3TG, will be encouraged to monitor their sources. Compulsory checks for the importers will ensure that minerals or metals sold on the European market are not used to illegally finance conflicts, particularly in mineral-rich countries affected by conflicts or war.
Educating stakeholders and achieving long-term sustainable effects is only possible through an approach based on shared responsibility. The regulation will be very important in creating good premises for more prosperity in conflict areas. This will lead to more stability. Stability in Africa and all other conflict areas means fewer migration flows to the European Union.
To protect SMEs and to minimise bureaucracy and red tape, the regulation offers an exemption for the smallest importers, based on a threshold system designed to cover at least 95% of all imports to the European Union. Through delegated acts, Parliament will be able to keep control of the implementation. Parliament also ensured that the Commission will regularly report on the accompanying measures meant to make the regulation more effective. The aim was to create an efficient and workable regulation and the update by the European companies and must be monitored, he concluded.
Cecilia Malmström, Commissioner for Trade, also found the draft regulation to be an ambitious and a workable instrument to eliminate conflict minerals from supply chains. It will contribute to address the challenges of conflict linked to natural resources, hardship of entire communities and human rights abuses that have for too long accompanied this kind of trade.
She was convinced that trade must be based on values, and the conflict mineral regulation is a key element in that approach. The global market-based trade in raw materials can provide a vital source of a stable income to the people and countries who need it the most, but that development needs to be sustainable. Therefore, transparent and responsible supply chains means revenues would not go into the hands of rebel groups but to investment in schools, in hospitals, supporting a well governed state underpinned by the rule of law. It can mean improving people’s lives from conflict and terror to opportunity and hope. It means encouraging the economic growth that helps the poorest regions grow sustainably. In short, this means doing what trade does best – not contributing to war and instability but delivering sustainable jobs and real opportunities.
The most obvious example of the conflict linked to minerals is around the great lakes of Africa. Millions have been killed, millions more injured since the first Congo war broke out some 20 years ago, but it is certainly not the only example. This why this regulation takes a global approach. The United Nations, the G-8, honourable Members of this House have called for an integrated approach combining trade, development and other policies.
The regulation is just one of the components of the EU action, she added. In addition, the EU is fully on track with the EUR 20 million development aid package announced in 2015, and this will include financial support via the OECD Secretariat, helping the responsible production of gold, peace-building and stabilisation in Central and West Africa. It will help assistance and training for those on the ground; it will help vulnerable women and children affected by the conflict; it will be a support for the International Conference for the great lakes region and a Dutch-led private-public European partnership for responsible minerals. It will help EU small and medium-sized and micro-enterprises to understand their due diligence on conflict minerals and, picking up on the very important suggestion by this House, we will also have the OECD due diligence guidance translated into all the EU official languages.
The EU is also reaching out to other governments to encourage them to source responsibly – this month to China and India, last month to the United Arab Emirates and many African countries including Burkina Faso, Democratic Republic of Congo, Ghana, Guinea, Ivory Coast, Nigeria, South Africa, Uganda, Zambia and the African Union.
Unfortunately, some of the vibes they are picking up from Washington on this matter are not encouraging. They do not know yet for certain the approach by the new US administration, but this should certainly not alter the results. On the contrary, it underlines more the importance of European leadership, she concluded.
Bogdan Brunon Wenta (EPP, PL) was also satisfied with the regulation for stipulating that the verification of the due diligence is mandatory for those that imports conflict mineral. He welcomed the measures for SMEs and stressed the importance of raw materials diplomacy.
Daniel Caspary (EPP, DE) welcomed the intention of the draft regulation, but warned against the outcome it could have on the ground, for those countries that export raw materials. The aim of the EU is not to introduce an embargo, but rather put companies in Europe in a position where they have a conscience about buying clean raw materials.
Maria Arena (S&D, BE) cautioned against the regulation aiming at specific regions. The Commission’s initial proposal was based on a voluntary approach and thankfully the European Parliament acted to change. This compulsory approach was not entirely supported by the Council; hence the ambition of the Parliament was watered down unfortunately. The European Commission should count on the Parliament for monitoring the implementation of the draft regulation closely.
Dita Charanzová (ALDE, CZ) found the draft regulation to be ambitious, but also proportionate, for targeting key actors involved in the causes of these conflicts. It will also raise international companies’ awareness on human rights issues in relations to their activities and increase traceability in the supply chain. In addition, the text makes sure that the system is workable by the European companies, assist SMEs and exempt importers of very small volumes.
Helmut Scholz (GUE/NGL, DE) regretted the fact that unscrupulous companies have long been buying the commodities from the warlords. Such companies also operate in Europe, but thankfully the draft regulation draws a line for them and for the first-time companies are legally required to apply a duty of care for the supply chains of their raw materials. Unfortunately, this will happen in three years, he said, regretting that the number of victims will grow by then. Therefore, the European Commission should already push for the rapid introduction of supply chain control, take an active part in the accompanying measures at an early stage and to go beyond the projects already underway.
Molly Scott Cato (Greens/EFA, UK) also welcomed the draft regulation. It should also be noted that, although Parliament does not have formal powers to initiate legislation, this process began with the work of her colleague Judith Sargentini here in Parliament, with the Commission following up her own-initiative report with its own proposal. Parliament thankfully refused to accept the Commission and Council’s preference for a voluntary code. On the other hand, the final deal includes some important loopholes, particularly the fact that while Parliament’s proposal included mandatory due diligence for manufacturers of products such as computers, mobile phones or laptops, this was watered down during the trilogues so that imported goods using the metals identified will not now be subject to the same binding rules. But overall, she was pleased with these binding rules on conflict minerals. This sort of restraint on the worst abuses of corporations that are so powerful in the global economy is the sort of action that citizens wish to see. It can help to build ongoing support and confidence in the European Union.
Tiziana Beghin (EFDD, IT) took pride in the draft regulation, taking into consideration that the technology, automotive and aviation industries objected strongly to it. At the same time, she regretted the fact that the ambition of the European Parliament was watered down in trilogues, but she hoped that there would be the chance to revisit the rules in the future.
Joachim Zeller (EPP, DE) welcomed the draft rules for allowing the EU to defend human rights and support development of these conflict zones in a better way.
David Martin (S&D, UK) welcomed the fact that the European Parliament managed to take the Council proposal and broaden it to have a wider coverage of the supply chain and move it upstream. It is good that from now on citizens will know that, when they pick up their mobile phones, they are not indirectly financing conflict in places like the Democratic Republic of the Congo. It is also good that now, given the lack of leadership coming from the United States on such issues, Europe is demonstrating that we are still a community of values and that we are prepared to export our values to elsewhere in the world. As the Commissioner herself said, and as other speakers have said, this part of a process now. This is not the end of the story. This is a beginning of the story of Europe making sure that our goods are traded in a fair way that defends human rights.
Louis Michel (ALDE, BE) also welcomed the ambition of the European Parliament’s in the whole process and regretted that this was watered down in trilogues. The Council missed the opportunity to demoralise the companies’ behaviour in conflict zones.
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