Conflict stones have been a part of the legitimate international trade in precious metals and minerals for many decades. Popularized by various Hollywood filmmakers over the years (Edward Zwick’s Blood Diamond comes to mind), Western audiences have become familiar with the controversies surrounding precious minerals, and perhaps are more concerned about the origins of their diamonds, sapphires, emeralds, gold, silver, and other high-end valuables than ever before.
Despite the fact that the plight of communities producing conflict stones is a rather public matter, repeated attempts by international organizations to control or ban the sale of minerals originating in war zones have been largely unsuccessful in the past decade. The Kimberley Process was one such attempt to stem the circulation of conflict stones. A key resolution adopted by the UN General Assembly in December 2000 supported “the creation of an international certification scheme for rough diamonds” to enforce a ban on conflict diamonds entering the licit global economy. The resolution followed a summit of mineral-rich African states in Kimberley, South Africa in May 2000, and it was hailed by world leaders as a milestone in halting the illegal trade in conflict stones.
Completely eradicating the highly profitable trade of conflict stone is often complicated by the existence of transnational crime and corruption, a rather pervasive and unfortunate illness that manifests itself widely in the global economy. With international criminal networks perfecting their strategies while governments drag their heels on implementing stricter policies to stem the tide of conflict stones trade, the Kimberley Process has been the subject of damning criticism from leading institutions dedicated to the promotion of human rights.
Global Witness has summed up the “achievements” of the Kimberley Process by stating that “despite the existence of the Kimberley Process, diamonds are still fuelling violence and human rights abuses. Although the scheme makes it more difficult for diamonds from rebel-held areas to reach international markets, there are still significant weaknesses in the scheme that undermine its effectiveness and allow the trade in blood diamonds to continue.” GW adds that “the KP will not achieve its aim of stamping out diamond-fuelled violence for good without the introduction of far reaching reforms or a serious injection of political will.”
While companies like Nokia, Apple, Samsung, Motorola, and Research in Motion have been caught up at one point or another in the controversy surrounding conflict minerals, they all claim to be managing their business in Africa with care being taken to avoid the acquisition of blood diamonds and other minerals procured through war. Moreover, there remains an ethical and moral dilemma about completely cutting off the purchase of diamonds from conflict zones like the Democratic Republic of Congo (DRC). Michelle de Cordova, Director of Corporate Engagement and Public Policy for Ethical Funds at NEI Investments, observes that “the minerals trade is a very important part of the economy in that part of the world…a lot of people depend on it for their livelihoods.” In turn, de Cordova and other responsible investment advisors suggest that “companies stay in the [conflict] regions responsibly.”
One example of a company which shows all signs of following socially responsible principles vis-à-vis conflict minerals is South Carolina-based Kemet Corporation, a firm that describes itself as “the world’s most complete line of capacitor technologies across tantalum, ceramic, film, aluminum, electrolytic and paper dielectrics.” Kemet Corp. has been praised by the US Government Accountability Office for establishing a “closed-pipe supply chain for responsible sourcing of tantalum from Katanga Province in the DRC”. Kemet is also notable for its achievement in responsible investing with its ‘Making Africa Work’ social sustainability project which has seen the firm contribute “[US] $1.5 million over a two-year period for infrastructure development and improvements such as the construction of schools, health clinics, and fresh water wells at and around the Kisengo mine site in DRC.”
In keeping with attempts by Western corporations to avoid becoming entangled in the trade of conflict minerals, the World Gold Council (WGC) introduced the Conflict-Free Gold Standard in 2012 to help companies “provide assurance that their gold is not contributing to conflict”. In addition, a landmark decision by the US Securities and Exchange Commission (SEC) in the same year saw the adoption of a rule requiring companies to “disclose their use of conflict minerals that originated in the Democratic Republic of the Congo or an adjoining country.”
Many powerful organizations and individuals have become involved in international attempts to curb the trade of conflict minerals over the years. However, implementing the relevant regulations and laws remains notoriously difficult in war-torn regions around the world. It is not in our power to solve such conflicts without wide-ranging political will and institutional support. Nevertheless, we can and must contribute to stemming the sale of conflict minerals and the financing of wars by following best practices and principles of ethical and socially responsible governance (ESRG) while urging local, national, and international stakeholders to do the same.
Otto Faludi is the Founder and Editor-in-Chief of Freedom Observatory and concurrently holds the positions of President and Chief Executive Officer at Ethics Without Borders, a registered Canadian not-for-profit corporation dedicated to educating emerging leaders in ethical and socially responsible governance.
This article is a cross-post from our partners at the Freedom Observatory