The EU Trade Commissioner Speaks
Take-aways from the event:
- We can expect a clear idea of the EU strategy by the end of the year.
- The geographic scope of an EU rule will almost certainly include Latin America.
- Minerals to be covered by an EU rule not likely to be expanded beyond the 3TG covered by the US rule.
The EU Trade Commissioner, Karel De Gucht, has promised an “effective but reasonable” EU system to encourage responsible sourcing of minerals produced in what he called “conflict areas.” At an event hosted by the Federation of German Industries (BDI) in Brussels, which was attended by Members of the European Parliament, the European Commission as well as Business Europe and members of the BDI, De Gucht highlighted the responsibility of businesses that comes with free trade: “There’s no such thing as a free lunch. Everything we do has consequences,” he stated.
De Gucht discussed the “highly complex” situation in the DRC and, although trade in minerals had played an important role in both the intensity and the length of the conflict, he appreciated that trade policy alone cannot provide a solution. He also stressed the need for a European initiative that “builds on existing obligations and approaches rather than coming into conflict with them.”
Interestingly, De Gucht also highlighted problems in Colombia and Venezuela, indicating that the European Commission will not limit the scope of an EU strategy to central Africa. Further, De Gucht is of the opinion that a broad geographic scope is needed to avoid potential negative consequences such as the stigmatization of certain regions which risks a resulting de facto embargo of those regions.
De Gucht also indicated that the European Commission would focus their approach on the narrowest point of the supply chain, smelters, with incentives to upstream suppliers to carry out due diligence.
Business Europe and BDI, on the other hand, spoke from an industry perspective and argued that legislation that is binding in Europe will not benefit the region, but instead will create a de facto embargo that will have a negative effect on the local workers and the local economy. Industry wants to see the development of voluntary measures based on the OECD guidelines and association initiatives.
The event ended with the presentation of the BDI commissioned Öko-Institut study “Conflict minerals – An evaluation of the Dodd-Frank Act and other resource-related measures” to De Gucht. The study looks at the link between minerals and conflict and is intended to contribute to the discussion of a European approach on conflict minerals and explore alternatives to extensive and mandatory downstream due diligence.
De Gucht did not set out a timetable for the development of the European approach on conflict minerals. However, he stated that he hoped that the European Commission would decide on the form of action it will take before the end of the year.