EU proposes scheme to certify mineral imports are blood-free

Wed Mar 5, 2014 8:00am EST

* EU seeks to compliment U.S. law, target importers

* Voluntary scheme could be extended to more minerals

* EU is a big market for gold, tin, tantalum, tungsten

By Robin Emmott

BRUSSELS, March 5 (Reuters) - Importers of minerals from conflict zones will be able to certify their goods have not financed warlords under a European scheme proposed on Wednesday, which would also help manufacturers show products are free of 'blood metals'.

Much of the gold, tantalum, tin and tungsten used in electronics and lighting is mined in areas of civil conflict in Africa.

The European Union, which increasingly requires trading partners to adopt political and human rights reforms, wants to pressure importers to boycott the violent militias that control the raw materials.

"We are committed to preventing international trade in minerals from intensifying or perpetuating conflict," EU Trade Commissioner Karel De Gucht and foreign policy chief Catherine Ashton said in a joint statement.

Under the EU's voluntary scheme, which could come into force by the end of next year, the approximately 420 companies that import all minerals into the 28-nation bloc could seek EU certification that their goods are conflict-free.

What's more, companies such as Apple or Siemens that source metals from certified importers would be eligible to bid for lucrative contracts across the EU's many governments and institutions.

In the United States, the Dodd-Frank Act already obliges U.S stock exchange-listed companies to disclose the use of minerals from an African conflict zone in their supply chains.

European officials say that creating an EU version of that law could lead importers to abandon Africa altogether and plunge honest mining communities in those areas deeper into poverty.

The European Commission, the EU executive, says the U.S. law already pressures companies to avoid buying conflict minerals.

AVOIDING AN AFRICAN BOYCOTT

Some listed companies have already switched their suppliers to Australia, depressing the price of minerals such as tin by half in the Democratic Republic of Congo and Rwanda, according to one EU official who has travelled to the region.

The Commission says its proposal, which must be approved by EU governments and the European Parliament, compliments the Dodd-Frank Act by targeting importers into the European Union, one of the world's biggest markets for tin, tantalum, tungsten and gold.

"This is not a stand-alone proposal. But we don't want to repeat what has already been done," the EU official said. "Dodd-Frank takes care of downstream users, and the European Union is taking care of the upstream."

The United States defines the conflict mineral zone as the Democratic Republic of Congo and neighbouring countries including Angola and South Sudan. They make up 17 percent of the global production of tantalum, 4 percent of the global production of tin, 3 percent of tungsten and 2 percent of gold.

The European Union says its proposal is not limited to sub-Saharan Africa and could be applied across the world to places such as Colombia, where militias control some remote gold regions.

The scheme does not cover diamonds because the European Union is already part of the 50-member Kimberley Process, a government, industry and civil society initiative set up in 2002 to control the use of rough diamonds that fund rebel movements and human rights abuses.

But the EU proposal could be extended to other minerals and also become mandatory after three years if there is enough support within the bloc.

Officials in Brussels estimate that implementing the certification scheme will cost each importer about 13,500 euros ($18,600), or less than 1 percent of annual turnover.