News

09.10.2013

"Conflict resources" in the sights of the legislator

The importance of transparency initiatives in the raw materials sector is growing steadily. Following the regulation of the trade in rough diamonds by the Kimberley Agreement, "conflict raw materials" are now being targeted by legislators.

The European Union plans legal requirements for proof of origin of resources.
© claffra - Fotolia.com
Die Europäische Union plant gesetzliche Vorgaben für Herkunftsnachweise von Rohstoffen.

According to a US-American decree (Dodd-Frank Act), companies already listed on the stock exchange are obliged to maintain certificates of origin for the raw materials tantalum, gold, tungsten and tin and to fulfil far-reaching inspection obligations for suppliers and material flows. Now the European Commission is also planning legal requirements.

What are "conflict resources"?

Raw materials in themselves have no value and are therefore conflict-neutral. However, in some mining regions of the world, there is a risk of financing armed conflicts through the proceeds from the sale of raw materials due to domestic crises. One such example is the Democratic Republic of Congo and the neighbouring states in the African Great Lakes Region. Therefore, the Dodd-Frank Act is also limited to this region.

Objectives & Problems of Disclosure and Certification of Global Supply Chains

The aim of the existing transparency initiatives is to disclose global supply chains to ensure that no "conflict raw materials" are contained in the end product. Such product-related disclosure and safeguarding of the supply chain from raw material to end product is hardly feasible for companies and entails high administrative costs. Securing the supply chain with certificates generates documents that cannot be verified due to the complexity of global supply chains. In addition, there is the danger of a boycott of the affected region, which can exacerbate conflicts.

The ZVEI therefore rejects product-related certification and proposes instead to concentrate on the smelting plants as "bottlenecks" within the supply chain. The ZVEI has introduced this point of view into the public discussion and received numerous encouragement. It is now important that the EU Commission finds the courage to pursue its own European approach instead of simply following the US guidelines.

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