S. 891 (111th): Congo Conflict Minerals Act of 2009

The text of the bill below is as of Apr 23, 2009 (Introduced).

Source: GPO

II

111th CONGRESS

1st Session

S. 891

IN THE SENATE OF THE UNITED STATES

April 23, 2009

(for himself, Mr. Durbin, and Mr. Feingold) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To require annual disclosure to the Securities and Exchange Commission of activities involving columbite-tantalite, cassiterite, and wolframite from the Democratic Republic of Congo, and for other purposes.

1.

Short title

This Act may be cited as the Congo Conflict Minerals Act of 2009.

2.

Findings

Congress finds the following:

(1)

The Democratic Republic of Congo was devastated by a civil war carried out in 1996 and 1997 and a war that began in 1998 and ended in 2003, which resulted in widespread human rights violations and the intervention of multiple armed forces or armed non-state actors from other countries in the region.

(2)

Despite the signing of a peace agreement and subsequent withdrawal of foreign forces in 2003, the eastern region of the Democratic Republic of Congo has continued to suffer from high levels of poverty, insecurity, and a culture of impunity, in which illegal armed groups and military forces continue to commit widespread human rights abuses.

(3)

According to a study by the International Rescue Committee released in January 2008, conflict and related humanitarian crisis in the Democratic Republic of Congo have resulted in the deaths of an estimated 5,400,000 people since 1998 and continue to cause as many as 45,000 deaths each month.

(4)

Sexual violence and rape remain pervasive tools of warfare used by all parties in eastern region of the Democratic Republic of Congo to terrorize and humiliate communities, resulting in community break down which causes a decrease in the ability of affected communities to resist control by illegal armed forces and a loss of community access to minerals. Sexual violence and rape affect hundreds of thousands of women and girls, frequently resulting in traumatic fistula, other severe genital injuries, and long-term psychological trauma.

(5)

A report released by the Government Accountability Office in December 2007 describes how the mismanagement and illicit trade of extractive resources from the Democratic Republic of Congo supports conflict between militias and armed domestic factions in neighboring countries.

(6)

In October 2002, the United Nations Group of Experts on the Democratic Republic of Congo called on member states of the United Nations to adopt measures, consistent with the guidelines established for multinational enterprises by the Organization for Economic Co-operation and Development, to ensure that enterprises in their jurisdiction do not abuse principles of conduct that they have adopted as a matter of law.

(7)

In February 2008, the United Nations Group of Experts on the Democratic Republic of Congo stated, individuals and entities buying mineral output from areas of the eastern part of the Democratic Republic of Congo with a strong rebel presence are violating the sanctions regime when they do not exercise due diligence to ensure their mineral purchases do not provide assistance to illegal armed groups and defined due diligence as including the following:

(A)

Determining the precise identity of the deposits from which the minerals they intend to purchase have been mined.

(B)

Establishing whether or not these deposits are controlled or taxed by illegal armed groups.

(C)

Refusing to buy minerals known to originate, or suspected to originate, from deposits controlled or taxed by illegal armed groups.

(8)

In its final report, released on December 12, 2008, the United Nations Group of Experts on the Democratic Republic of the Congo found that official exports of columbite-tantalite, cassiterite, wolframite, and gold are grossly undervalued and that various illegal armed groups in the eastern region of the Democratic Republic of Congo continue to profit greatly from these natural resources by coercively exercising control over mining sites from where they are extracted and locations along which they are transported for export.

(9)

United Nations Security Council Resolution 1857, unanimously adopted on December 22, 2008—

(A)

broadens existing sanctions relating to the Democratic Republic of Congo to include individuals or entities supporting the illegal armed groups . . . through illicit trade of natural resources,; and

(B)

encourages member countries to ensure that companies handling minerals from the Democratic Republic of Congo exercise due diligence on their suppliers.

(10)

Continued weak governance in the Democratic Republic of Congo has allowed the illicit trade in the minerals columbite-tantalite, cassiterite, wolframite, and gold to flourish, which empowers illegal armed groups, undermines local development, and results in a loss or misuse of tax revenue for the Government of the Democratic Republic of Congo. The development of stronger governance and economic institutions that support legitimate cross-border trade in such minerals would—

(A)

help prevent the exploitation of such minerals by illegal armed groups; and

(B)

enable the hundreds of thousands of people who depend on such minerals for their livelihoods to benefit from such minerals.

(11)

Metals derived from columbite-tantalite, cassiterite, wolframite, and gold from the Democratic Republic of Congo are used in diverse technological products sold worldwide, including mobile telephones, laptop computers, and digital video recorders.

(12)

In February 2009, the Electronic Industry Citizenship Coalition and the Global e-Sustainability Initiative released a statement asserting that—

(A)

use by the information communications technology industry of mined commodities that support conflict in such countries as the Democratic Republic of Congo is unacceptable; and

(B)

electronics companies can and should uphold responsible practices in their operations and work with suppliers to meet social and environmental standards with respect to the raw materials used in the manufacture of their products.

(13)

Notwithstanding the extensiveness of the supply chains of technological products and the extensiveness of the processing stages for the metals derived from columbite-tantalite, cassiterite, wolframite, and gold used in such products, companies that create and sell products that include such metals have the ability to influence the situation in the Democratic Republic of Congo by—

(A)

exercising due diligence in ensuring that their suppliers provide raw materials in a manner that does not—

(i)

directly finance armed conflict;

(ii)

result in labor or human rights violations; or

(iii)

damage the environment;

(B)

verifying—

(i)

the country from which the minerals used to derive such metals originate;

(ii)

the identity of the exporter of the minerals; and

(iii)

that all appropriate tax payments are made; and

(C)

committing to support mineral exporters from the Democratic Republic of Congo who—

(i)

fully disclose their export payments; and

(ii)

certify that their minerals do not—

(I)

directly finance armed conflict;

(II)

result in labor or human rights violations; or

(III)

damage the environment.

3.

Statement of policy

It is the policy of the United States, as affirmed by the Democratic Republic of Congo Relief, Security, and Development Promotion Act of 2006 (Public Law 109–456; 22 U.S.C. 2151 note) and consistent with United Nations Security Council Resolution 1857 (2008), to promote peace and security in the eastern Democratic Republic of Congo by supporting efforts of the Government of the Democratic Republic of Congo, other governments in the Great Lakes Region of Africa, and the international community—

(1)

to monitor and stop commercial activities involving the natural resources of the Democratic Republic of Congo that contribute to illegal armed groups and human rights violations in the Democratic Republic of Congo; and

(2)

to develop stronger governance and economic institutions that can facilitate and improve transparency in the cross-border trade involving the natural resources of the Democratic Republic of Congo in order to reduce exploitation by illegal armed groups and promote local and regional development.

4.

Investigation, reports, and strategy regarding columbite-tantalite, cassiterite, wolframite, gold, and human rights abuses in the Democratic Republic of Congo

(a)

Support of mandate of United Nations Group of Experts on the Democratic Republic of Congo

The President, acting through the Secretary of State, the United States Permanent Representative to the United Nations, and other appropriate United States Government officials, shall use the voice and vote of the United States at the United Nations Security Council to renew the mandate and strengthen the capacity of the United Nations Group of Experts on the Democratic Republic of Congo to investigate links between natural resources and the financing of illegal armed groups, and ensure that the Group of Experts' recommendations are given serious consideration.

(b)

Map of mineral-rich zones and armed groups in Democratic Republic of Congo

(1)

In general

Not later than 120 days after the date of the enactment of this Act, the Secretary of State shall, consistent with the recommendation from the United Nations Group of Experts on the Democratic Republic of Congo in their December 2008 report, work with other member states of the United Nations and local and international nongovernmental organizations—

(A)

to produce a map of mineral-rich zones and armed groups in the eastern region of the Democratic Republic of Congo; and

(B)

to make such map available to the public.

(2)

Updates

The Secretary of State shall update the map required by paragraph (1) not less frequently than once every 180 days until the Secretary of State certifies that no armed party to any ongoing armed conflict in the Democratic Republic of Congo or any other country is involved in the mining, sale, or export of columbite-tantalite, cassiterite, wolframite, or gold, or the control thereof, or derives benefits from such activities.

(c)

Guidance for commercial entities

The Secretary of State shall, consistent with the recommendation from the United Nations Group of Experts on the Democratic Republic of Congo in their December 2008 report, work with other member states of the United Nations and local and international nongovernmental organizations to provide guidance to commercial entities seeking to exercise due diligence on their suppliers to ensure that the raw materials used in their products do not—

(1)

directly finance armed conflict;

(2)

result in labor or human rights violations; or

(3)

damage the environment.

(d)

Strategy

(1)

In general

Not later than 180 days after the date of the enactment of this Act, the Secretary of State shall, working with the Administrator of the United States Agency for International Development, submit to the appropriate congressional committees a strategy to address the linkages that exist between human rights abuses, armed groups, and the mining of columbite-tantalite, cassiterite, wolframite, and gold in the Democratic Republic of Congo.

(2)

Contents

The strategy required by paragraph (1) shall include the following:

(A)

A plan to assist the Government of the Democratic Republic of Congo and other governments in the region in establishing and effectively implementing the necessary frameworks and institutions to formalize and improve transparency in the trade of columbite-tantalite, cassiterite, wolframite, and gold.

(B)

An outline of assistance currently being provided and an assessment of future assistance that could be provided by the Government of the United States to help the Government of the Democratic Republic of Congo strengthen the management and export of natural resources in the eastern region of the Democratic Republic of Congo.

(C)

A description of punitive measures that could be taken against individuals or entities whose commercial activities are supporting illegal armed groups and human rights violations in eastern Democratic Republic of Congo.

(e)

Annual human rights reports

In preparing those portions of the annual Country Reports on Human Rights Practices relating to the Democratic Republic of Congo or countries that share a border with the Democratic Republic of Congo, the Secretary of State shall ensure that such reports include a description of any instances or patterns of practice that indicate that the extraction and cross-border trade in columbite-tantalite, cassiterite, wolframite, or gold has negatively affected human rights conditions or supported specific human rights violations, sexual or gender-based violence, or labor abuses in the eastern region of the Democratic Republic of Congo, during the period covered by each report.

(f)

Annual Organization for Economic Co-operation and Development investment committee report

In preparing the United States’ annual report to the Organization for Economic Co-operation and Development Investment Committee, the Secretary of State shall include a description of efforts by the United States to ensure, consistent with the Organization for Economic Co-operation and Development Guidelines for Multinational Enterprises, that enterprises under United States jurisdiction are exercising due diligence to ensure that their purchases of minerals or metals are not originating from mines and trading routes that are used to finance or benefit illegal armed groups in the Democratic Republic of Congo.

(g)

Authorization of appropriations

There is authorized to be appropriated to the Secretary of State for fiscal year 2010 such sums as may be necessary for the Secretary to carry out the provisions of this section.

(h)

Definitions

In this section:

(1)

Appropriate congressional committees

The term appropriate congressional committees means—

(A)

the Committee on Appropriations, the Committee on Foreign Relations, and the Committee on Banking, Housing, and Urban Affairs of the Senate; and

(B)

the Committee on Appropriations, the Committee on Foreign Affairs, and the Committee on Financial Services of the House of Representatives.

(2)

Human Rights Reports

The term Human Rights Reports means all reports submitted by the Secretary of State to Congress under sections 116 and 502B of the Foreign Assistance Act of 1961 (22 U.S.C. 2151n and 2304).

5.

Disclosure to Securities and Exchange Commission of activities relating to columbite-tantalite, cassiterite, and wolframite industries

Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended by adding at the end the following new subsection:

(m)

Disclosure to Commission of activities relating to columbite-tantalite, cassiterite, and wolframite industries

(1)

In general

Not later than 180 days after the date of enactment of this subsection, the Commission shall promulgate rules requiring any person described in paragraph (2)—

(A)

to disclose annually to the Commission the country of origin of columbite-tantalite, cassiterite, or wolframite related to any of the activities described in paragraph (3); and

(B)

if disclosure is required under subparagraph (A) and the country of origin disclosed under subparagraph (A) is the Democratic Republic of Congo or an adjoining country, to disclose annually to the Commission the mine of origin of such columbite-tantalite, cassiterite, and wolframite.

(2)

Person described

A person is described in this paragraph if the person—

(A)

is required to file reports to the Commission under subsection (a); and

(B)

either—

(i)

engages in activities described in paragraph (3); or

(ii)

controls a person that engages in activities described in paragraph (3).

(3)

Activities described

An activity described in this paragraph is—

(A)

the commercial exploration, extraction, importation, exportation, or sale of columbite-tantalite, cassiterite, or wolframite; or

(B)

the use of such minerals, derivatives of such minerals, components that include such minerals, or components that include derivatives of such minerals in the manufacture of a product for sale.

(4)

Revisions and waivers

The Commission may revise or temporarily waive the requirements described in paragraph (1) if the Commission determines that such revision or waiver is—

(A)

necessary for the protection of investors; and

(B)

in the public interest.

(5)

Termination of disclosure requirements

The disclosure requirements of this subsection shall terminate if the President—

(A)

determines that—

(i)

no armed party to any ongoing armed conflict in the Democratic Republic of Congo or any other country—

(I)

is involved in an activity described in paragraph (3)(A) with respect to columbite-tantalite, cassiterite, or wolframite; or

(II)

derives benefits from such activity; or

(ii)

a regional framework has been established and effectively implemented to monitor and regulate the activities described in paragraph (3)(A) with respect to columbite-tantalite, cassiterite, or wolframite in the Democratic Republic of Congo so that such activities do not finance or benefit illegal armed groups; and

(B)

notifies the Commission of the determination under subparagraph (A).

(6)

Authorization of appropriations

There is authorized to be appropriated to the Commission for fiscal year 2010 such sums as may be necessary for the Commission to carry out the provisions of this subsection.

(7)

Definitions

In this subsection, the following definitions shall apply:

(A)

Adjoining country

The term adjoining country, with respect to the Democratic Republic of Congo, means a country that shares an internationally recognized border with the Democractic Republic of Congo.

(B)

Control

The term control means—

(i)

in the case of a corporation, ownership of at least 50 percent of the voting stock of the corporation; and

(ii)

in the case of any other entity, ownership of interests representing at least 50 percent of the voting capital of the entity.

(C)

Foreign person

The term foreign person means a person—

(i)

in the case of an individual, who is an alien as such term is defined in section 101(a) of the Immigration and Nationality Act (8 U.S.C. 1101(a)); or

(ii)

in the case of a partnership, corporation, or other entity, that is organized under the laws of a foreign country or that has its principal place of business in a foreign country.

(D)

Person

The term person has the meaning given the term in section 3(a) but does not include—

(i)

any foreign nongovernmental organization that—

(I)

has consultative status with the United Nations Economic and Social Council; or

(II)

has been accredited by a department or specialized agency of the United Nations; or

(ii)

a foreign person whose business activities are strictly limited to providing goods and services that are—

(I)

intended to relieve human suffering;

(II)

intended to promote welfare, health, religious, or spiritual activities;

(III)

used for educational or humanitarian purposes;

(IV)

used for journalistic activities; or

(V)

used for such other purposes as the Secretary of State may determine serve the foreign policy interests of the United States.

.

6.

Sense of Congress on assistance for affected communities and sustainable livelihoods

(a)

Sense of Congress on assistance for affected communities

It is the sense of Congress that the Administrator of the United States Agency for International Development should expand and better coordinate programs to assist and empower communities in the eastern Democratic Republic of Congo whose livelihoods depend on the mineral trade, particularly—

(1)

communities affected by sexual and gender-based violence; and

(2)

individuals displaced by violence.

(b)

Sense of Congress on future year funding

It is the sense of Congress that the Secretary of State and the Administrator should work with the appropriate congressional committees to increase assistance in fiscal years beginning after fiscal year 2009 for communities affected by violence in the Democratic Republic of Congo, specifically—

(1)

to provide medical treatment, psychological support, and rehabilitation assistance for survivors of sexual and gender-based violence;

(2)

to provide humanitarian relief and basic services to people displaced by violence;

(3)

to improve living conditions and livelihood prospects for artisanal miners and mine workers; and

(4)

to alleviate poverty by reconstructing infrastructure and revitalizing agricultural production.

(c)

Sense of Congress on coordination of assistance

It is the sense of Congress that the United States should work with other countries, on a bilateral and multilateral basis—

(1)

to increase protection and services for communities in the eastern Democratic Republic of Congo at risk of human rights violations associated with the mineral trade, particularly women and girls;

(2)

to strengthen the management and trade of natural resources in the Democratic Republic of Congo; and

(3)

to improve the conditions and livelihood prospects of artisan miners and mine workers.

7.

Report

Not later than 2 years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report that includes the following:

(1)

An assessment of the effectiveness of the provisions of this Act and section 13(m) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(m)), as added by section 5, in promoting peace and security in accordance with section 3.

(2)

A description of the problems, if any, encountered by the President, officials described in section 4(a), the Securities and Exchange Commission, and the Administrator of the United States Agency for International Development in carrying out the provisions of this Act and such section 13(m).

(3)

A description of the adverse impacts of carrying out the provisions of this Act and such section 13(m), if any, on communities in the eastern Democratic Republic of Congo.

(4)

Recommendations for legislative or regulatory actions that can be taken—

(A)

to improve the effectiveness of the provisions of this Act and such section 13(m) to promote peace and security in accordance with section 3;

(B)

to resolve the problems described pursuant to paragraph (2), if any; and

(C)

to mitigate the adverse impacts described pursuant paragraph (3), if any.