U.S. Congressional Watchdog Report on Conflict Minerals Rule

LUBUMBASHI, DEMOCRATIC REPUBLIC OF CONGO (Reuters) – A U.S. congressional watchdog has found no evidence that a 2012 Securities and Exchange Commission (SEC) conflict minerals disclosure rule has reduced violence in the Democratic Republic of Congo, as stated in a report on Monday.

Armed groups continue to fight for control of gold mines in the eastern region of the Central African country, according to the U.S. Government Accountability Office (GAO). The report indicates that the rule, which requires certain companies to report their use of tantalum, tin, tungsten, and gold, has likely had no effect in neighboring countries.

“GAO found no empirical evidence that the rule has decreased the occurrence or level of violence in the eastern DRC, where many mines and armed groups are located,” the report stated.

Additionally, the GAO noted that the rule was associated with a spread of violence, particularly around informal and small-scale gold mining sites. Gold is highlighted as the most difficult mineral to trace and easiest to smuggle among the four covered by the rule.

Congo is recognized as the world’s top producer of tantalum, which is deemed a critical mineral by both the United States and the European Union.

The report also mentioned that the SEC disagreed with some of GAO’s findings, expressing concerns over certain methodologies and analyses. The GAO indicated that adjustments made did not materially affect its conclusions.

The SEC has not yet responded to requests for comment.

In a prior report last year, the GAO revealed that some U.S. companies purchasing minerals from Congo and its neighbors were failing to meet disclosure requirements.

On September 30, Bintou Keita, head of the U.N. mission in Congo, informed the U.N. Security Council that M23 rebels in the east are generating $300,000 per month from a coltan-mining region they seized earlier this year.