The Role of Government in Corporate Social Responsibility - DRC Conflict Minerals Explained

Witnessing ethnic and regional conflicts, genocides and wars around the world in current news and journalism seems consistent and endless, an exhaustive and distressing cycle. Recent public and media encouragement to elevate ESG surveillance and maintain transparency to decrease corporate performatism and increase positive societal impact are valuable pushes for change within corporate social sustainability practices. The discussion of various corporate involvement and contributions in these conflicts is all too familiar. However, an important aspect of regulation and change is left out; governance and policy. In the ever-evolving world of corporate social sustainability advancements, governance and policy play a vital role in attaching prescriptiveness, transparency, and regulation to complex social issue webs and discussions. To some extreme levels, it can be the only factor of ordinance and a method of monitoring the societal impact of corporations. However, governance and policy are also incredibly nuanced and often have flaws and hindrances. The nature of government and policy involvement within conflicts around the world with the intention of monitoring the social governance of corporations is best witnessed with the history of the recent conflict occurring in the Dominican Republic of the Congo.

The Dominican Republic of the Congo has been facing historical conflicts and wars, with the Second Congo War otherwise labelled the Great African War—a representation of its sheer scale. Decades of exploitation, corruption and armed conflicts from colonialism to regional and ethnic wars involving its political regime development have resulted in the DRC holding the title of one of the poorest countries in the world. Around 62% of Congolese, an estimated 60 million people, lived on less than $2.15 a day, as reported in 2022. However, the natural landscape of the DRC is gifted with some of the most sought-after minerals for technology manufacturing found in devices used on a daily basis: cobalt and tungsten. According to the International Trade Administration (US), “In 2020, the DRC was the world’s largest cobalt miner with a production of 95,000 tons, or nearly 41% of the world’s cobalt”.

Additionally, 67% of the world’s tantalum comes from the DRC and Rwanda. While both of these natural abundances set the DRC as the center stage for mining companies and tech giants, many regional armed groups maintain control over mines in cooperation with the government. Many of these groups are from different ethnic and philosophical backgrounds, of which some hope to gain power over this current government. The control of mines provides these groups with the economic power from international mining companies, with instances of labour being sourced from either forced or child labour. With these factors, the societal conditions that many are forced to work and live in are incredibly regressive toward an economy and quality of life that are already hindered.

Many countries around the world recognize the harmful involvement of large corporations, the exacerbation of conflict and the direct humanitarian implications of mining and exploration within certain regions. Governmental organizations worldwide, such as the EU, US and Canada, have instated policies regarding tin, tungsten, tantalum and gold, labelling them as “conflict minerals”. Breaking down the United States’ Section 1502 of the Dodd–Frank Act under OECD guidelines, companies are required to mandate publicly-listed American businesses to examine their supply chains for gold, tungsten, tin, and tantalum to determine if any could be imported from the Democratic Republic of the Congo or adjacent countries. They additionally need to take action to address any risks they discover and annually report to the U.S. Securities and Exchange Commission (SEC) on their progress. While companies are not urged to discontinue sourcing from this area, they must demonstrate that they are taking the necessary precautions—what is referred to as "due diligence"—to ensure that they are not sponsoring armed organizations or any other violation of human rights.

Though these policies are certainly a step in the right direction, a lack of prescriptiveness creates ambiguity while simultaneously incentivizing loopholes under the corporate guise of “strategy”. Corporate self-drive within the realm of ESG is required to ensure genuine action and monitoring progress while maintaining transparency. According to CNBC,“ while companies like Apple, Microsoft, Intel, and Tesla put out extensive reports on conflict minerals every year, usually stating that there is no reason to believe the minerals they source help support armed groups, corruption and instability at mine sites means there is no guarantee.” Furthermore, in the specific case of the Corporate Transparency Act, there are a wide number of exemptions for reporting and transparency standards, undermining these policies’ goals.

In advancing our government’s corporate ESG policies and regulations, change is best implemented with the voice of media and public opinion. Addressing corporate involvement in humanitarian issues around the world can contribute to pushing the pin forward in raising awareness about different mechanisms for change and increasing quality of life around the world. In the current news, we see the effects of around 7 million Congolese displaced, with much of the blame falling onto cobalt mining and regional armed groups. Policy and governmental regulation may not be expansive enough, but the efficacy of policy is only synergized with the public's participation. Now more prevalent than ever, every citizen is equipped with methods to inform themselves regarding ongoing conflicts and the influences that corporations have on them. Staying informed on the activities of companies supported by consumers, leading corporate partnerships, and lending power and economic support to states, organizations, and parties is important knowledge for every citizen. Understanding these impacts on society that the businesses we support can have while encouraging government officials and ensuring accountability about taking action is as important as any policy or legislation.