Conflict minerals: towards an efficient EU Regulation

On the 23rd of February Rapporteur Iuliu Winkler MEP (EPP), Vice-Chair of the INTA Committee presented his draft report on the EU Regulation on setting up a Union system for supply chain due diligence self-certification of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas in the Committee of International Trade (INTA).

“I consider that the approach of the Commission proposal to set up a due diligence system on a voluntary self-certification basis is the most appropriate for the time being, however I believe that improvements are needed in order to strengthen the Commission’s text. In this sense, the draft Report that I put forward in the INTA Committee includes three main objectives. First of all, it is necessary to ensure a high level of participation of the European importers under a voluntary self-certification scheme. My second objective is to find a balanced and viable solution in order to have an efficient Regulation based on the OECD Due Diligence Guidance for responsible supply chains of minerals originating from conflict-affected and high-risk areas. Thirdly, we have to secure the proper involvement of the European Parliament during the whole legislative process and in the control of the implementation phase” – stated the Rapporteur.

The Rapporteur puts a special focus on SMEs which should join the self-certification system. “My aim is to encourage SMEs to participate in the system. I think that the use of the right incentives and putting in practice targeted assistance for SMEs, as foreseen in the accompanying measures to the Regulation, this can be achieved” – highlighted MEP Winkler.

The presentation of the draft Report was followed by an intense debate in the INTA Committee. The Members all agreed on the main goal of the file, namely that of breaking the link between financing of armed groups and sourcing minerals in conflict-affected and high-risk areas, however major differences were shown between the speakers of the political groups regarding the content of the Proposal and the ways of its implementation.

Members of the EPP Group, while committed to the global geographic scope and the product scope of the Regulation as proposed by the Commission, will continue prospecting the comparative efficiency of alternative approaches in the upstream segment of the supply chain, as well as the efficiency of the accompanying measures.

In view of the timeline of the dossier, in March the amendments which are going to be tabled to the draft Report will be debated in the INTA Committee, then the votes on amendments will take place in the April Committee meeting. The AFET and DEVE Committees will deliver Opinions to the draft Report.

*** The main objective of Proposal of the European Commission is to help to reduce the financing of armed groups and security forces through mineral proceeds in conflict-affected and high-risk areas by supporting and further promoting responsible sourcing practices of EU companies in relation to tin, tantalum, tungsten and gold (also called 3TG) originating from such areas.
Today, international measures exist to promote responsible sourcing of minerals in areas at risk or affected by armed conflict. The two best-known were adopted in 2011 and 2010 respectively: the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and Section 1502 of the United States Dodd-Frank Wall Street Reform and Consumer Protection Act.
The Commission proposal focuses on all EU operators importing tin, tantalum and tungsten, their ores, and gold into the EU market. It defines the conditions for them to be self-certified as responsible importers of the mineral and metals in scope. The proposal is based on a due diligence framework allowing EU importers to apply the principles and processes set out in the OECD Due Diligence Guidance and thereby addressing the risk of financing armed groups and security forces and mitigating other adverse impacts including serious abuses associated with the extraction, transport or trade of the minerals in scope.
This legislative proposal is accompanied by a Joint Communication of the Commission and the High Representative, detailing other policy measures that can be deployed to tackle the problem as broadly as possible.
Importers, who opt in, will need to implement the OECD Due Diligence Guidance, provide audit assurances and disclosure information to the Member States competent authorities. Based on the information disclosed, the EU, after consultation with the OECD, will annually issue a list of responsible smelters and refiners that source according to this Regulation.
The EU is a majer importer of the 3TGs, the industry of electronics and machinery is the biggest user of these minerals.