April 05, 2017

WASHINGTON – Today, ITI, the global voice of the tech sector, released the following testimony delivered by Senior Vice President of Environment and Sustainability Rick Goss before a hearing of the Senate Foreign Relations Committee Subcommittee on Africa and Global Health Policy entitled: ‘A Progress Report on Conflict Minerals

As prepared for delivery, click here for Goss’s submitted testimony:

Chairman Flake, Ranking Member Booker, and members of the subcommittee – thank you for the opportunity to testify today regarding Central Africa and section 1502 of the Dodd-Frank Act.

My name is Rick Goss, and I am the Senior Vice President of Environment and Sustainability at ITI – a global trade association representing the world’s most innovative technology companies. ITI has been central to the conflict minerals dialogue for years, and I have led ITI’s engagement on this priority since 2007.

The tech sector is committed to contributing to peace and stability in Central Africa, and we have proven this commitment by sourcing responsibly from the region. Our engagement has helped provide critical economic benefits to hundreds of thousands of people who depend upon mining activities for their livelihood.

As Congress considers replacing or modifying section 1502, we urge you to ensure that the U.S. continues to drive diplomatic efforts in the region, and to advance responsible sourcing initiatives. Should the U.S. fail to do so, Central Africa could experience additional volatility, and we could see the rise of inconsistent regulatory regimes.

Section 1502 has yielded mixed success in cutting off funding to armed groups and reducing violence in the region.

While governments, civil society and the private sector have together realized some clear progress on responsible sourcing, this mixed outcome in the region is due in part to the continued smuggling of gold; ongoing interference by a spectrum of armed groups; and, the ready availability of numerous other sources of illegal revenue.

While the DRC is increasing the responsible production of tin, tantalum and tungsten – the “3Ts” – this progress does not extend to gold. In a December 2016 report, the United Nations Group of Experts stated that, “gold exploitation and trade remain poorly regulated, and the mineral is by far the one most often used to finance armed elements and criminal networks” in the DRC.

Criminal networks within the Congolese Army remain some of the chief offenders. These elements, along with myriad non-state armed groups, directly interfere in mining operations, set up illegal road blocks, and levy unlawful taxes on local communities, miners and minerals. They exploit products such as timber, charcoal, and cannabis, and engage in human trafficking, forced labor, the slaughter of endangered species, and extortion.

Ultimately, even as section 1502 has generated a measurable increase in transparency for 3T supply chains, armed actors have turned to gold and other lucrative and illicit methods.

While section 1502 has yielded some positive impacts, it has also generated unintended consequences.

First, the provision contributed to the de facto embargo documented in the region beginning in 2010, causing significant hardships for countless vulnerable people living in what has been termed the “survival economy”.

Second, section 1502 has had an inordinate impact on small- and medium-sized enterprises here in the United States and elsewhere.

Finally, by focusing almost exclusively on the role of the private sector, section 1502 diverted critical attention away from the indispensable role of governments in addressing the crisis.

We have three recommendations to share:

First, the U.S. should expand existing efforts to drive peace, security, and governance in Central Africa through increased support for political and diplomatic solutions, and through development aid to help formalize the regional mining sector.

Second, the U.S. should maintain its leadership position to guard against unintended outcomes. If our government stops driving responsible sourcing, the region may experience renewed or increased volatility. Moreover, other geographies will likely regulate U.S. companies, potentially disrupting private sector programs.

The U.S. should further advance the uptake of the OECD Due Diligence Guidance, the international model for responsible sourcing that forms the backbone of section 1502 compliance.

Third, the U.S. should consider removing ineffective requirements that result in burdensome and duplicative paperwork exercises, generate little benefit in Central Africa, or dissuade companies from investing in the region. Congress should seek to remedy the competitive disadvantages that section 1502 created between companies.

In conclusion, the geo-political challenges facing Central Africa are so severe that only concerted actions by regional governments, coupled with ongoing support from the international community, can resolve them. The region continues to be beset by rampant conflict and corruption, and destabilized by chronic interference from neighboring countries. The underlying causes of this conflict are political, not economic, and are linked to entrenched ethnic hostilities, and disputes over political power.

Tech will continue to actively engage and contribute to the solution, but governments must ultimately create the necessary conditions to allow private sector and civil society initiatives to thrive.

Thank you again for the invitation to testify today. I would be pleased to answer any questions.

Public Policy Tags: Environment & Sustainability, Supply Chain Responsibility
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