Tuesday, June 21, 2016

EU authorities agree on framework for new conflict minerals regulation

By John Filar Atwood

The European Commission (EC), Council and Parliament have agreed on a framework for a new EU regulation that will focus on stopping profits from trading minerals used to fund armed conflicts. The negotiations pave the way for technical work and final adoption of the regulation over the next several months.

The EC said in a news release that it will take a number of additional steps to stop the financing of armed groups through trade in conflict minerals. These steps include the development of reporting tools to further boost supply chain due diligence by large and small EU companies that use the metals and minerals as components in consumer goods.

EU Trade Commissioner Cecelia Malmstrom noted in a blog posting that the trade in conflict minerals has led to human rights abuses. She believes that the EU, as the world’s biggest trading bloc, has a responsibility to contribute to fair, transparent, and value-based trade.

Due diligence. According to Malmstrom, the framework sets out mandatory due diligence obligations for the critical “upstream” part of the mineral supply chain, which includes those who import raw materials to smelting and refinery plants in the EU. The needs of small companies will be addressed, she said, to avoid subjecting them to overly burdensome procedures by exempting recycled minerals, and imports of very small volumes.

Reporting tools. For “downstream” companies that use the refined forms of the metals and minerals in components and goods, the EC will develop reporting tools, standards to further boost due diligence in the supply chain, and a transparency database, Malmstrom added. Downstream operators who import refined, metal-stage products into the EU will be covered by the mandatory obligations.

She noted that the framework is accompanied by foreign policy and cooperation efforts to promote change in the regions affected, and to support small and medium-sized businesses to make the new regulation workable. The political understanding will help trade work for peace in areas around the world impacted by armed conflict, and not to finance the campaigns of warlords and human rights abusers, she concluded.

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