AFKI Mining: Will Dodd-Frank Address The Roots Of Conflict?

AFKI Mining: Will Dodd-Frank Address The Roots Of Conflict?

Last week the District of Columbia Court of Appeals ruled on one of the most important cases for human rights advocates and Africa watchers so far this year.

The Court ruled on the U.S. Securities and Exchange Commission’s rules regarding disclosure on conflict minerals from the Democratic Republic of the Congo and surrounding countries that stemmed from the massive Dodd-Frank financial regulations package of 2010.

When the District of Columbia Court of Appeals determined that the disclosure requirements of the SEC rules were unconstitutional, it put the regulation’s future in jeopardy. The SEC could move to create different rules that are more narrowly tailored to lift the resource revenues from rebels’ pockets or could simply let the issue die.

In part 1 of this AFKInsider series we discussed the ruling, upholding the right of the Securities and Exchange Commission (SEC) to make such rules while striking down the disclosure requirements as unconstitutionally compelled speech. While this leaves the future of such regulation up in the air, a number of prominent scholars and policymakers doubt the efficacy of the rules regardless of their legal status.

John Prendergast is founder of the Enough Project, a Washington, D.C.-based organization that works with concerned citizens, advocates, and policymakers to resolve crises of genocide and crimes against humanity. In a Foreign Affairs article, Prendergast said the reduction of conflict mineral use is one of the major reasons for the reduction in violence of the M23, a Tutsi rebel group sponsored by Kigali.

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Writing for the Washington Post’s Political Science Blog, The Monkey Cage, Colby College Assistant Professor Laura Seay cast serious doubt on the role that reducing conflict minerals has played in stemming violence.

When it comes to the Democratic Republic of the Congo, the “…underlying idea that any Congolese rebels would stop fighting if they lost access to mineral revenue was never substantiated,” Seay said.

Stemming the flow of mineral wealth will do little to stop the violence for many reasons, scholars say. In her writing, Seay cites research showing that the conflict itself is driven not by mineral wealth or control of mineral supplies, but by other factors including land rights, citizenship, identity and group belonging. She also points out that there has never been any meaningful research confirming just how rebels use resource wealth and that there is significant evidence rebels can and will find other sources of revenue if that one is cut off.

In addition to the resource wealth that Dodd-Frank has attempted to limit, Congolese rebels have diverse revenue streams that stem from the lack of effective governance at the state level. Seay refers to research by James Stearns, a Yale Ph.D. candidate and former coordinator of the U.N. group of experts on the Congo. Stearns said that rebel groups trade a number of commodities including minerals, cannabis, charcoal and precious hardwoods. They have also developed an extensive illegal protection racket, a smuggling network and taxation of civilians and border crossings. According to Stearns, not only is this evidence of an excessively weak central state, it has also amounted to rebel-held privatization of government.

While resource wealth may be taken from the various rebel groups, their diverse revenue flow combined with the non resource-based elements of the conflict make it difficult to imagine that even a successful Dodd-Frank would do much to stem the violence.

This makes sense when looking at the history of artisanal mining in the Congo. Writing for the Huffington Post, Mvenba Dizolele, a visiting fellow at Stanford’s Hoover Institution, describes the history of the conflict, and how a largely agrarian society was uprooted in the late 1990s when farms and infrastructure were destroyed. Former farmers were then forced to take part in less land-intensive practices such as the burgeoning artisanal mining industry.

With this history in mind, “activists have reversed the cause-to-effect sequence of developments,” Dizolele said. Put differently, if it is the conflict that led to so many Congolese taking up artisanal mining, it is difficult to imagine that auditing mining revenues would somehow end the conflict.

Dizolele goes further, saying that by misunderstanding this cause and effect, the Dodd-Frank bill may actually cost thousands of families their livelihood by what amounts to a de facto mining moratorium. “These people, however, are likely to pay a high price for the legislation and lose their livelihood. Back in September 2010, they experienced the effects of a mining moratorium for the first time. In an attempt to preempt the U.S. legislation and its proponents, Congolese President Joseph Kabila suspended artisanal mining operations in the region. Expectedly, the outcome was devastating for the population, as the thousands of Congolese who depend on this trade could not find work…”

Regardless of what determination the commission makes, it is clear that fighting in the Congo and surrounding countries will remain a significant issue until governance is strengthened, rebel groups cannot raise revenue by replacing the state and the root causes of the conflict are addressed.

Unfortunately for advocates of the Dodd-Frank regime, mineral wealth is not one of those root causes.

Andrew Friedman is a human rights attorney and consultant who works and writes on legal reform and constitutional law with an emphasis on Africa. He can be reached via email at afriedm2@gmail.com or via twitter @AndrewBFriedman.