Katrina Manson: Taking the war out of mineral wealth

A US drive to clean up the trade in Congo's minerals is putting pressure on industry and the central African country to step up efforts to regulate the sector or risk seeing it fall apart.

Much of Congo's minerals, including gold, cassiterite and tantalum that end up in jewellery, laptops and mobile phones across the world, come from its troubled east, where conflict among government forces and rebel groups have displaced more than 1.4 million people. Campaign groups have for years argued that trade has fuelled the conflict.

They cheered a bill passed by the American Senate last week requiring US-listed giants such as Hewlett-Packard and Apple to declare whether they source from Congo or its neighbours and to comply with future guidelines. Yet the impact of the legislation is far from clear and will depend partly on whether it is now followed up by action from industry and Congolese authorities.

"It's a high-risk gamble by the NGOs and legislators - it may lead to a de facto embargo on formal trade if businesses decide to pull out of the region," said Nicholas Garrett, director of London-based Resource Consulting Services.

"The consequence … will be that thousands of Congolese will be jobless and might (be] joining the armed groups," warned John Kanyoni, head of the Association of Mineral Exporters in Congo's eastern North Kivu province.

Such a reaction is out of the step with the government line in the capital Kinshasa, where information minister Lambert Mende called the bill a "noble initiative" in Congo's best interests and urged other countries to follow suit.

Yet the challenge ahead should not be under-estimated.

A UN experts panel on the Kivu region concluded in May that "almost every mining deposit is controlled by an armed group" - effectively putting much of those minerals out of bounds to US companies under the new bill.

Underlining the difficulty in establishing whether minerals are genuinely "clean", the panel also found that illegal taxes were being levied by armed groups all along the transport chain out of the mines.

Others warn it will be difficult to distinguish minerals from Congo and more stable "non-conflict" neighbours such as Uganda, Rwanda and Zambia.

David Bensusan, chief executive of Minerals Supply Africa, complained that the US bill, expected to be signed by Barack Obama this week, was vague and gave industry nine months to comply with guidelines that had not yet been written. "We accept the principle of the legislation but the problem is they're not giving us enough time," said Bensusan, a Briton whose tin and tantalum export company is based in Rwanda.

Lobby groups such as the Enough Project reject such arguments. "They've had plenty of time … These issues of due diligence have been around for two years," said Sasha Lezhnev, a consultant for the Washington-based group.

Few would argue that the US bill in itself can put an end to violence that has continued for years despite the presence of a 21,000-strong UN peacekeeping force, seeing it as part of an arsenal of measures that need to be taken. The UN group of experts panel said in its May report that it could also recommend making the financial institutions that bankroll exporters and manufacturers accountable.

Greg Mthembu-Salter, consultant to the panel, said companies would be urged, alongside civilian and army authorities, to devise ways of reducing illegal payments to armed groups. "The idea is that industry pressure, plus civilian government pressure, will reduce the militarised presence."

That would complement the main government effort under way, which is a UN-backed pilot scheme to introduce five centres de negoces (buying centres) in which deposits can be traded and tagged free from illegal taxes or armed groups.