Journal of World Trade
Volume 52, Issue 1 (2018) pp. 37 – 63

https://doi.org/10.54648/trad2018003

Abstract

In April 2017, the EU adopted a new EU Regulation introducing a compulsory due diligence scheme for the trade in conflict minerals. This regulation is the latest milestone in the process of tightening the supply chain requirements concerning tin, tungsten, tantalum and gold. The aim of this process is to encourage companies to respect human rights and avoid contributing to conflict through their mineral sourcing practices by cultivating transparent mineral supply chains and sustainable corporate engagement in the mineral sector. Measures already in place include the US Dodd-Frank Act and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas. However, the former applies only to the Democratic Republic of Congo and its neighbouring countries. By contrast, the OECD Guidance is broader in material and geographic scope but stipulates only non-binding recommendations. The following article discusses these sets of rules. Moreover, it explains the details of the new EU Regulation and discusses the extent to which it stipulates new and stricter rules for the trade in (conflict) minerals.

Extract

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The EU Regulation on Conflict Minerals:The Way Out of a Vicious Cycle?Thomas VOLAND*& Shona DALY*In April 2017, the EU adopted a new EU Regulation introducing a compulsory duediligenceschemeforthetradeinconflictminerals. This regulation is the latest milestone inthe process of tightening the supply chain requirements concerning tin, tungsten, tantalumand gold. The aim of this process is to encourage companies to respect human rights andavoid contributing to conflict through their mineral sourcing practices by cultivating transpar-ent mineral supply chains and sustainable corporate engagement in the mineral sector.Measures already in place include the US Dodd-Frank Act and the OECD DueDiligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflictedand High-Risk Areas. However, the former applies only to the Democratic Republic ofCongo and its neighbouring countries. By contrast, the OECD Guidance is broader inmaterial and geographic scope but stipulates only non-binding recommendations. Thefollowing article discusses these sets of rules. Moreover, it explains the details of the newEU Regulation and discusses the extent to which it stipulates new and stricter rules for thetrade in (conflict) minerals.1 INTRODUCTIONIn conflict zones rich in natural resources, the international trade in minerals oftenfunds armed groups and helps to perpetuate violent conflict. Companies thatdirectly or indirectly obtain raw materials from conflict-affected areas fuel a viciouscycle, extending the power of armed groups and intensifying conflicts.Most definitions of conflict minerals centre on cassiterite (from which tin isproduced), wolframite (from which tungsten is produced), columbite-tantalite(from which tantalum is produced) and gold. These commodities are commonlyused in products in the automotive, medical device, electronics, telecommunica-tions, aerospace, packaging, construction, lighting, industrial machinery andtooling industries among others, as well as in jewellery.1An estimated 880,000mostly small or medium-sized companies incorporated in Europe use suchVoland, Thomas & Daly, Shona.‘The EU Regulation on Conflict Minerals: The Way Out of a ViciousCycle?’.Journal of World Trade52, no. 1 (2018): 37–64.© 2018 Kluwer Law International BV, The Netherlands*The authors are lawyers at Freshfields Bruckhaus Deringer LLP in Berlin and London.Emails: thomas.voland@freshfields.com and shona.daly@freshfields.com1European Commission,FAQ Responsible Sourcing of Minerals Originating Conflict-Affected and High-RiskAreas: Towards an Integrated EU Approach, memo/14/157 of 5 Mar. 2014, at 1.

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