By signing the financial overhaul package on Wednesday
, President Obama also enacted the first major U.S. government attempt to require transparency in the international oil, gas, and mineral trade, aimed at reducing the risk of “resource curse” scenarios that have plagued countries like Nigeria
and the Democratic Republic of Congo
The amendment, sponsored by Senators Bill Cardin and Richard Lugar, requires extractive companies registered with the SEC to publicly disclose their tax and revenue payments to foreign governments. The amendment singles out the DRC for additional scrutiny: companies trading in tin, coltan, wolframite, and gold – minerals found commonly in eastern Congo – will need to report whether they are sourcing from the DRC or its neighbors
and disclose what steps they have taken to ensure that their supplies are conflict-free.
The international community will be eagerly watching the results of this effort. Can a U.S. law on conflict minerals reduce violence in the DRC’s complex civil war? I recently argued that while the legislation is a great initial effort, it will have little immediate impact on the violence and suffering in the country. In a recent interview with New Security Beat, EITI expert Jill Shankleman called the Cardin-Lugar bill “an important step” but pointed out that it only covers companies who are listed with the SEC and does not reduce the need for countries to enter into EITI.
Will this new law help Afghanistan – with its allegedly vast stores of valuable minerals – avoid the fate of the DRC? While some fear that corruption and lack of transparency may lead to conflict around the new Chinese contract to operate Afghanistan’s Aynak copper field, a recent U.S. Army War College paper argues that contrary to prevailing opinion, the Chinese approach to large-scale extractive investments could complement Western-led military stabilization efforts.
Photo Credit: “Wolframite” from the DRC, courtesy of flickr user Julien Harneis.