Wednesday 11 April 2018
One year has passed since the adoption of the Regulation on so-called conflict minerals by the EU Council and the European Parliament. Under the new rules, which will be applicable from 2021, importers of tungsten, tantalum, tin and gold will be obligated to ensure that their supply chain is not fuelling armed conflicts in high-risk areas around the world.
The Regulation was welcomed by a large majority of Members of the European Parliament (MEPs) as well as by the civil society. It is generally considered a major first step to ensure transparent and responsible supply chains of important raw materials and to tackle the issue of international armed conflicts. However, some shortcomings were quickly identified such as the fact that the Regulation will only enter into force four years after its adoption, the exclusion from the scope of critical materials such as cobalt and finally its limited focus as the new rules only cover armed conflicts and are not applicable to other human rights violations such as child labour.
These issues were also raised by several MEPs during a debate that took place on the 15th of March 2018 during the Plenary session of the European Parliament. The debate followed the submission of two oral questions to the Commission concerning the implementation of the Regulation and the accompanying measures. To these critics, the European Commission responded that the scope of the Regulation may be broadened in the future and that the four-year delay was necessary in order to put in place the tools and measures needed to ensure a smooth implementation. In fact, during the last year, the European Commission has been progressing on the implementation of different aspects of the Regulation.
The new rules will ensure that minerals used by European industries are sourced responsibly, in a way that does not harm populations in mining regions and does not fuel war. The new Regulation will reduce the hardship and human rights abuses that have for too long accompanied this trade.
Cecilia Malmström, European Commissioner for Trade
The Directorate General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) is working to develop a series of tools to respond to the needs of businesses and companies:
- In January 2018, the EU Commission finalized a study on the support system needed to incorporate due diligence in SMEs supply chain. On the basis of the study’s outcome, the EU Commission plans to deliver, by the end of next year, an online tool designed to help SMEs in their due diligence efforts.
- DG GROW is also working to create support networks composed of SMEs, industries and sector’s representatives and is planning to launch a communication campaign to make sure that all concerned parties are aware of the tools at their disposal.
In addition, in order to ensure coherence between the EU Regulation and the existent international framework such as the due diligence system developed by the Organisation for Economic Co-operation and Development (OECD), the Directorate General for Trade (DG TRADE) is working on a number of measures:
- A delegated regulation, coherent with the OECD criteria, establishing the methodology that the EU Commission intends to use to validate industry due diligence schemes.
- A guidance document addressed to the Member States' competent authorities to support their upcoming enforcement activities, in particular the so-called ex-post checks on importers.
- A guidance document to help companies identify conflict-affected and high-risk areas.
- A translation into all EU languages of the OECD guidance that should be ready by the spring.
- Different measures to encourage the development of due diligence schemes among downstream companies. Some companies producing goods including tin, tantalum, tungsten and gold, are not yet covered by the scope of the Regulation. However, it is important that these downstream companies consider responsible sourcing.
It is clear that, as highlighted by MEP Bern Lange, Chair of the European Parliament Committee for International Trade during the March Plenary session, much remains to be done as the minerals included in the Regulation account only for 35% of the global trade. Nevertheless, the European Regulation adopted last year is putting in place an ambitious scheme to make sure that the minerals used by EU industries are sourced in a transparent and responsible way. It is crucial to involve the concerned sectors in this first phase ahead of implementation in order to develop concerted measures that are simple, understandable and adapted to their reality, especially when it comes to SMEs. Moreover, it would be advisable to base these measures on the already existing international framework, such as the guidelines elaborated by the OECD and other industry schemes. In this respect, the EU should put in place a series of equivalence criteria to make compliance with the new rules easy and straightforward.
 REGULATION (EU) 2017/821 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 17 May 2017 laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas.
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