Policy recommendations

  • The European Union should allow ACP countries to maintain their sovereignty and policy space in relation to the appropriate use of their own natural resources. They should be able to use investment regulations, tariff barriers and export restrictions to promote equitable, local and sustainable economic development.
  • The European Commission through its development policy should stimulate resource-rich developing countries to implement their own industrial policies, to protect their infant industries by using legitimate barriers to trade, and by introducing environmental measures. This should allow resource-rich developing countries to move up the value chain, so that the added value to (semi) processed products will remain in the country of origin and would thus stimulate economic development.
  • Within its development budget the EU should allocate sufficient resources to the building of energy and environmental infrastructure to enable developing countries to stimulate economic development.
  • The EU should use its political and economic power to set clear rules in relation to the extraction of raw materials. Like suggested in the February 2011 RMI update an EU code of conduct for EU companies operating in third countries should be developed and measures should be taken to enforce such a code of conduct.
  • In order to provide for more transparency in the supply chain and to minimize the role of European companies in fuelling conflicts over resources, the EU should implement Country by Country reporting, following the US example of the Dodd Frank Act.
  • Within the EPA negotiations the EU should be more flexible as suggested in the RMI update and make sure developing countries can demonstrate the use of export taxes as a policy tool and therefore keep using them.
  • In all policy initiatives and actions elaborated on the basis of the strategy laid down in the Raw Materials Initiative that affect developing countries, DG Development should be closely involved, and ACP partner countries and civil society organisations should be consulted.

 

 

Case: Raw Materials Initiative

02-12-2010 S&D MEPs advocate for new European law for the extractive industry

The Democratic Republic of Congo (DRC) is the best known example of a country suffering from the resource curse. When looking at the natural resources reserves it is one of the richest countries is the world, since it has for instance 80% of the worlds coltan reserves and 30% of the diamonds reserves. Yet today the DRC is one of the poorest countries where human rights are violated on a daily basis. Two S&D MEPs Marc Tarabella and Ana Gomes asked questions to both the European Council and the European Commission about the relationship between resources and the desperate human rights situation.

MEP Marc Tarabella asked when the European Union (EU) is going to be introducing legislation similar to the US conflict minerals law, which was part of the DoddFrank Wall Street Reform and Consumer Protection Act. US based companies are obliged to disclose whether their products are made of raw materials from DCR or neighbouring countries. They also have to publish if they tried to trace back the origin of the materials. This law helps to solve both the resource curse and also the problem of tax evasion. MEP Marc Tarabella mentions that the Belgian Secretary of State for European Affairs, Oliver Chastel, speaking on behalf of the High Representative of the Union for Foreign Affairs and Security Policy was following and considering introducing similar legislation.

The question MEP Ana Gomes asked to the Commission follows after a resolution being adopted by the European Parliament on October 7th 2010 on failures in protecting human rights and justice in the DRC. MEP Gomes asked what the Commission is proposing in order to tackle corruption, especcially in the extractive industries. Will this affect the allocation of developing aid designated to the DRC?

Fair Politics has raised awareness around the problems in relation to the resource curse and the extraction of raw materials in developing countries. These issues should be strongly taken into account in the  European Raw Materials Initiative. Despite the increasing scarcity of raw materials, resource-rich countries should be able to use their national wealth for the development of their own industries. A European law equivalent to the US law, would give the honest and legal extractive industries in developing countries a chance, because the illegal mines (often in the hands of armed groups) would encounter more difficulties in selling their raw materials. This would also make the current Raw Materials Initiative more coherent with European development policies, which are striving for the eradication of poverty (art. 208 Treaty of the Functioning of the European Union).

For their concerns expressed about the DRC, Marc Tarabella (S&D) and Ana Gomes (S&D) are recognised as Fair Politicians. Both MEPs earn a point in our monitoring system.

Monitor fair: S&D(2)

Parliamentary questions
E-7888/2010
4 October 2010
WRITTEN QUESTION, by Marc Tarabella (S&D)

Subject: US conflict minerals law as inspiration for European legislation
In the Democratic Republic of the Congo, armed rebel groups rape and kill with impunity on a daily basis. Their record of rape is worst in parts of the mineral-rich Kivu region where such groups are involved in illegal mineral extraction. Buying these minerals enables the groups concerned to pursue their violent activities, yet the European Union has no system of traceability for minerals.
The USA took action in July 2010 by enacting the conflict minerals law in an effort to prevent the import of goods manufactured using contraband minerals, so on 22 September 2010, during Parliaments debate in plenary on failures in protection of human rights and justice in the Democratic Republic of the Congo, I called on the EU to adopt similar legislation.
The Belgian Secretary of State for European Affairs, Oliver Chastel, speaking on behalf of the High Representative of the Union for Foreign Affairs and Security Policy, stated that the matter was one which the Union was following closely and which it would be considering.
Can the Council indicate whether it supports the idea of European legislation similar to the US conflict minerals law?

 

Parliamentary questions
E-8906/2010
28 October 2010
WRITTEN QUESTION, by Ana Gomes (S&D)

Subject: Corruption in the mining sector in the Democratic Republic of Congo (DRC)
Given Parliaments resolution of 7 October 2010 on failures in protection of human rights and justice in the Democratic Republic of Congo [1], what measures does the Commission propose to take to address corruption by the DRC Government, especially in relation to the extractive industry?
What steps will be taken to investigate the recent illegal confiscation of mining licences, carried out under protest from the World Bank, the G8 and international arbitral courts?
Will the Commission address these acts of impunity by the DRC in connection with the EUR 514 million allocated by the 10th European Development Fund, with a focus on consolidating and supporting public governance?
 
1. P7_TA(2010)0350.