Well done to Enough Project and Global Witness over conflict minerals


You may or may not be aware of the provisions of the Dodd Frank act over conflict minerals. These were pushed by the Enough Project and Global Witness as a way of reducing the violence associated with the mining of tin, tantalum, tungsten and gold in the Eastern Congo. We were originally told that this would cost some $10 million, one cent on each mobile phone made, and pacify the region. Even the SEC says that this has cost some $4 billion just in its first year of implementation. And it appears that it doesn't in fact work either:

There is widespread belief that violence in poorly governed countries is triggered by international demand for their natural resources. We study the consequences of U.S. legislation grounded in this belief, the “conflict minerals” section of the 2010 Dodd-Frank Act. Targeting the eastern Democratic Republic of the Congo, it cuts funding to warlords by discouraging manufacturers from sourcing tin, tungsten, and tantalum from the region. Building from Mancur Olson’s stationary bandit metaphor, we explain how the legislation could backfire, inciting violence. Using geo-referenced data, we find the legislation increased looting of civilians, and shifted militia battles towards unregulated gold mining territories. These findings are a cautionary tale about the possible unintended consequences of boycotting natural resources from war-torn regions, and the use of international resource governance interventions.

The money quote:

The evidence suggests the legislation significantly increased the incidence of looting and the incidence of violence against civilians by at least 291 and 143 percent respectively.

Lord preserve us from well meaning Social Justice Warriors, eh?

Currently Dodd Frank applies only to listed US companies. Global Witness is among those campaigning to have the same provisions written into European Union law for all companies, even down to the level of sole traders.

Should increase the level of violence they say they want to reduce quite nicely that, eh?