A law proposed by the European Commission on responsible sourcing of minerals is not strong enough to prevent European companies from effectively financing conflict or human rights abuses, campaigners said today.

Instead of putting forward robust legislation that would require a wide range of EU-based companies to do checks on their supply chains – known as due diligence – the Commission today announced voluntary measures that will only apply to companies importing processed and unprocessed minerals into the European market.

The proposal covers companies involved in the lucrative gold, tin, tantalum and tungsten sectors. The campaigners warned that the Commission’s proposal – an opt-in self-certification scheme available to a limited number of companies – is likely to have minimal impact on the way that the majority of European companies source their natural resources.

Seema Joshi from Amnesty International said:

“It’s absolutely critical that the EU enforces existing international standards. Anything short of a mandatory reporting obligation for EU-based companies using and trading natural resources, will fail to prevent Europe from acting as a conflict mineral trading hub.”

Sophia Pickles from Global Witness said:

“The proposal is tantamount to the EU saying that it’s ok for companies to choose not to behave responsibly. This risks undermining the duty states have to protect human rights, which is well-established under international law.”

Legislation introduced in the US in 2010 that requires US-listed companies to do checks on minerals coming from the Democratic Republic of Congo and neighbouring countries, has already prompted changes in the way that companies do business. Campaigners are warning that without a clear EU law that requires companies to do due diligence and report publicly on it, the European Commission will fail to bring EU companies up to the same responsible sourcing standards as their American competitors.

Gisela ten Kate from The Centre for Research on Multinational Corporations said:

“Rather than building on the significant momentum generated by legislation passed in the US, thereby raising the bar for responsible sourcing globally, the Commission’s proposal threatens to lower international standards and start a race to the bottom.” 

Further, by directing the opt-in scheme only at importers of raw ores and metals, the Commission has missed a unique opportunity to influence the behaviour of a much wider cross-section of global players. To ensure that natural resources from conflict or high-risk areas don’t enter EU markets, the law also needs to target manufacturers, and companies that import finished products. Metals from conflict areas routinely enter the EU in manufactured products like computers, phones, light bulbs and cars.

Antonio Manganella from CCFD Terre-Solidaire said

“An EU law obliging companies right along the supply chain, including end-users who import products containing metals like tin and gold, to do due diligence would have prompted reforms in supply chains beyond Europe.”

Campaigners also expressed disappointment that the Commission’s proposal does not address other natural resources. “By focusing only on four minerals, the Commission fails to address reports that other natural resources are also fuelling conflict,” said Astrid Schrama from PAX. “Our research shows that in Colombia, coal extraction has financed the creation of armed paramilitary groups that have caused the deaths of thousands and has led to the displacement of at least 60,000 people in the mining area of Cesar region.”

Reports also indicate that precious stones have financed violence in Zimbabwe, Burma and Colombia. 

According to Michael Reckordt from AK Rohstoffe:

“It seems that the Commission caved in to a powerful industry lobby to reduce the scope and make their proposal weaker.” Frédéric Triest from EurAc said: “Companies’ resistance to legislation is unfounded and demonstrates a failure to recognise the need for, and potential benefits of knowing what is going on in their supply chain. The fact that US-based companies, prompted by US legislation, are now carrying out enhanced due diligence shows that it is possible.”

Chantal Daniels from Christian Aid said:

“The Commission missed a chance to propose a law that would make a real difference to millions of people in war-torn countries.”

The European Parliament and Council will take up the proposal later this year.  Campaigners are insisting that parliamentarians and EU Member States must make it a priority to strengthen the legislation so that it is fit for purpose, warning that otherwise, the EU is set to remain a hub for a harmful trade.