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U.S. financial reform bill also targets 'conflict minerals' from Congo
The new law requires American companies to submit an annual report to the Securities and Exchange Commission disclosing whether their products contain gold, tin, tungsten or tantalum from Congo or adjacent countries. If so, they have to describe what measures they are taking to trace the minerals' origin.
The law does not impose any penalty on companies who report taking no action. But the disclosures must be made publicly on firms' Web sites.
"The consequence is a market-driven one. Consumers can make their choices. Do they want their electronic products to be funding gang rape in central Africa? I don't think most Americans would want that," said Rory Anderson of the World Vision humanitarian group, which has been pushing for the legislation.
'We need to toughen up'
U.S. executives say it can be exceedingly difficult to figure out whether there are "conflict minerals" in their products. Such minerals may, for example, be smuggled from Congo through Rwanda, mixed with ore from other countries in a smelter in Kazakhstan and then sold to a company in Southeast Asia that supplies a parts manufacturer in China.
Many firms in the high-tech sector have been trying to ensure their suppliers don't use "conflict minerals," jointly running a pilot program at smelters to identify where minerals come from.
Robert Hormats, the undersecretary of state for economic affairs, said in an interview that tracing the source of minerals is much more complicated than tracing the source of diamonds. For one thing, he said, diamonds "aren't melted down." In addition, the rebels sometimes gain or lose control over mines.
"We need to toughen up. Sanctions is one way," said Hormats, who has been working with industry to improve accountability.
Some companies said they welcomed the law. Michael Holston, the general counsel of HP, the Palo Alto, Calif.-based computer maker, applauded the measure, saying it would "help reduce some of the factors that have contributed to the civil war" in Congo.
Both industry experts and advocates said the law is one step in solving a much larger conflict.
"What really needs to happen is the international community needs to redouble its efforts to bring an overall diplomatic [solution] to what's going on in Congo," Goss said.