WIREDGOV

MEPs, ministers and the European Commission have agreed a new Regulation to address "conflict minerals".

New EU rules have been agreed in an attempt stop the financing of armed groups and human rights abuses through the trade in the so-called 3TGs from conflict areas.

Tin, tantalum, tungsten and gold are used in the production of many high-tech devices in the electronics sector but are also used in automotive,
aerospace, packaging, construction, lighting, industrial machinery and tooling industries, as well as in jewellery.

Under the new Regulation, all but the smallest importers of tin, tantalum, tungsten and gold will be required to carry out due diligence, in line with OECD rules, when sourcing from conflict and "high-risk" areas. EU member states will determine how to enforce and penalise non-compliance. Recycled metal, existing EU stocks and by-products are exempt.

During the negotiations there had been a strong push by MEPs that larger manufacturers should also be required to carry out mandatory due diligence if their products contained these materials. Instead, those companies covered by the non-financial reporting Directive (those with over 500 employees) will be encouraged to report on their sourcing practices using new performance indicators. Comapnies can also join an EU registry and voluntarily report on their sourcing practices.

However, a review clause means that if this voluntary framework proves unsatisfactory, additional mandatory measures could be brought in quickly: Within two years of the Regulation coming into force, and every three years thereafter, there will be a review of the effectiveness of the regime. The reviews also consider the Regulation’s impact on the ground and compliance by EU firms.

How to determine high-risk areas has been left open. Whilst the Democratic Republic of the Congo (DRC) and the Great Lakes region have been under particular scrutiny, notably in section 1502 of the US’s 2011 Dodd Frank Act, the Commission will draw up a non-exhaustive list of other areas. Other “due diligence issues” will also be addressed in a hand book for operators.

In a positive move, existing voluntary initiatives, such as the Conflict-Free Smelter Programme, can be used to demonstrate compliance but the schemes will be frequently reviewed to ensure that they comply with the OECD’s guidance. Indeed, a review by the OECD is already underway to assess the degree in which these schemes meet its global standard.

And more initiatives are underway. Companies in the tech sector have been early participants in the European Partnership for Responsible Minerals (EPRM), an accompanying measure to the Regulation, and backed by the UK government. The goal of the EPRM is to increase the proportion of responsibly‐produced minerals from conflict‐affected and high‐risk areas, and to support the socially responsible extraction of minerals. The EPRM will carry out upstream activities in mining areas and downstream activities in Europe to increase the due diligence knowledge of SMEs. It will also set up a knowledge platform to exchange due diligence knowledge and best practices. The first two projects, in Colombia and the DRC, have recently been selected.

And just last week, the Electronic Industry Citizenship Coalition announced a new initiative on responsible raw materials. It will be working initially to identify and prioritise key social and environmental impacts associated with the extraction and processing of raw materials in international supply chains. It will then develop some specific initiatives to driving meaningful improvements in the mining sector.

The International Trade Committee and the full House will now vote on the final agreement early next year.

More details, such as timeframes, will emerge once the text has been published. techUK will be monitoring developments via its Sustainable
Supply Chain working group.

{bio}susanne.baker@techuk.org{/bio}