3% of all business owners make 84% of all private biz income. Why? They’re not covering for unknown weaknesseses.
Dodd-Frank is devastating the Congo right now.
The collateral damage is unacceptable.
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This article was published on November 05, 2011. So far, 6 people have left their thoughts. Share your own thoughts.
We have a social enterprise in the DR Congo to end systemic poverty. The opportunities to solve it are at our fingertips. Global Witness and Enough Project, human rights advocacy groups who should be aligned with us, are doing everything they can to stop us.
UPDATE: I originally wrote this in August and updated it in November. Just this week a UN Panel of Experts report came out that verifies the depth of the problem Dodd-Frank is causing for the Congolese people. So far Dodd-Frank has not even been implemented and the result has already been devastating.
We need to continue to put the pressure on groups like Enough Project, Global Witness and the SEC to admit how destructive Dodd-Frank is in the Congo. We need them to stop supporting what everyone else has deemed an abject failure and get behind repealing that 1502 clause in Dodd-Frank that has been so injurious.
See the summary of the UN Panel of Experts report here , then read how you can help change this below. Original post follows:
DR Congo is the 12th largest country on earth with the 8th most mineral wealth in the ground. With 70 million people as a workforce and all this latent wealth, it could easily be a first world leader in a very short time.
My Congolese partner – a Congolese Chief, and I have committed to create infrastructure and sustainable economies in the Congo by exporting agriculture and minerals, and leaving a significant portion of the profits local, something no other company has ever done. We will also fund and train local business owners to learn how to run businesses. The net effect – we believe we can solve systemic poverty in the DR Congo in 5-10 years.
The Problem – Dodd-Frank
But now an obscure provision pushed forward by Global Witness and Enough Project and tucked into the Dodd-Frank Act (Provision 1502) could be jeopardizing much of this, and is already hurting millions of Congolese and putting thousands in immediate danger of their lives.
The provision requires tens of thousands of companies to disclose if their products use minerals from the Congo, and to prove they did not come from criminal militias. As a result of the unintended stigma this has created, the mineral trade for all of central Africa has evaporated, creating a devastating de facto embargo of the entire region.
We have been trying for months to find buyers for the minerals these Congolese tribes own and have talked to every legitimate smelter and buyer in the world. None are buying Enough Project and Global Witness continue to claim there is no embargo, but we have asked them a dozen times to give us the name of a single buyer of artisanal minerals in central Africa – they can’t.
The Negative Effect
If all Congo minerals came from criminals, then Dodd-Frank would make sense. But the fact is that a tiny percentage of Congolese minerals come from criminals in the comparatively small conflict area. The rest are from honest, hard-working chiefs and their tribes throughout the vast Congo, millions of whom, with no connection to the conflict area, have lost their income and have moved from poverty to destitution.
Only the Criminals are Benefiting
COCABI, COMIMPA and COMIDER represent 20,000 miners in the conflict area. The wrote a letter to the SEC imploring them to not listen to Global Witness or Enough Project who have never even consulted with those most affected by Dodd-Frank, the miners.
While all the NGOs and politicians are quoting each other’s support of this, we are quoting chiefs and tribes who are actually being affected by it, all of whom say Obama’s Law (that’s what they call it) has been disastrous for them and their livelihood. Doesn’t this say something very powerful to us?
The Nuclear Option is Not Acceptable
The World Bank says 10 million people in the Congo get their living from mining, most whom are in regions never connected with conflict. And even in the conflict region there are 100,000 honest miners who have been moved from poverty to destitution by Dodd-Frank.
Dodd-Frank creates the equivalent of a nuclear option because it is not targeted specifically at the militia, but at minerals.
Demonize Criminals, Not Minerals
This approach is no different than burning down every house in town to stop a burglar from stealing. Dodd-Frank has burned down the entire mining industry in central Africa in hopes that their scorched earth policy will catch a militia group or two in its path. They are willing to take down every innocent man, woman, and child who live off mining. Such massive collateral damage is not acceptable under any circumstance.
One woman said, “I used to tend my fields, but women who farm get raped regularly by the militia. My only safe job is in the mines. I don’t know what I will do now.”
The solution is simple. In an appalling show of weakness, the UN (MONUSCO) has been sitting around in the Congo “observing” the atrocities for 15 years. They need to grow a spine. The militias are small, rag-tag, poorly organized, poorly led thugs with no significant weaponry. They could be over run in a few days of concerted effort.
If there is no militia, there would be no need to demonize minerals. But if you demonize minerals, the militia will still be there terrorizing, raping and killing.
Global Witness and The Enough Project Are NOT Advocating for the Congolese
These two NGOs are directly and personally responsible for getting politicians to insert the disastrous 1502 provision into Dodd-Frank. It was well intentioned – they did not want it to have the effect it’s having. But now that they are fully vested in the political side of this provision, they have completely lost their way regarding the Congolese themselves.
They steadfastly refuse to even admit it has had a negative effect, regularly deny the de facto embargo in the face of every statistic and my personal experience, brazenly try to deflect by blaming the opposition for the embargo they deny exists, and worst of all, have now taken to recommending that the Chiefs sell their minerals to human rights violators.
The NGOs Solution? – Sell to human rights violators and smugglers
In a conference call with Enough Project’s main leadership, I was astonished to hear them recommend that we sell to the Chinese, who have one of the worst human rights records on earth and who have no regard for the human rights of the Congolese. A stunning position for a supposed human rights advocacy group.
Global Witness has also lost its way. In a response to the swell of opposition to Dodd-Frank by those supporting the Congolese people, Global also stunned the advocacy world, supporting Dodd-Frank by pointing to the smuggling of the militia as a good thing, “High levels of smuggling…reflect the reality that mining is continuing” and is “in fact substantially higher because of increased smuggling”. Truly amazing.
This is incredible. Global wants to stop the militias and yet points to the smuggling of minerals, a common militia tactic, as proof that things aren’t as bad in the conflict area as everyone says. Read the Forbes article and my response to it in the Comments section .
Clearly these two NGOs are no longer advocating for the Congolese miners, but for their own reputations which are now fully vested in arranging the deck chairs on the Titanic as Dodd-Frank sinks the Congolese economy.
They are also both in direct violation of the OECD Guidelines because they have done no due diligence among the miners who are most affected by the colonialistic decisions they want to impose from the outside. The hypocrisy is beyond the pale.
Advocating for What or Whom?
As Eric Kajemba, the leader of a Congolese civil-society group has said, “If the advocacy groups aren’t speaking for the people of eastern Congo, who are they speaking for?”
We’re advocating for the millions of Congolese miners and their families. Global and Enough stopped doing that a long time ago. They are so vested in their Dodd-Frank solution that to admit they were wrong now would create serious questions about their expertise in such situations. Too late – it already has. The best thing they could do is re-join us in advocating for the Congolese miners and stop pushing forth a political position that creates donors for them while Congolese people starve.
Please write or text them and challenge them to replace their political agenda with advocacy for the Congolese people:
Global Witness
Annie Dunnebacke ADunnebacke@globalwitness.org
Oliver Courtney ocourtney@globalwitness.org
Sophia Pickles spickles@globalwitness.org
Phone: (202) 621-6665
Enough Project
Sasha Lezhnev sasha@enoughproject.org
Jonathan Hutson jhutson@enoughproject.org
Fidel Bafilemba fbafilemba@enoughproject.org
Phone: (857) 919-5130
Contact Your Politician
Contact your local politician and also the following major supporters of this disastrous 1502 provision:
Senator Barbara Boxer
(510) 286-8537 (202)
Senator Chris Coons
Phone: 302-322-1140
Email: info@chriscoons.com
Senator Dick Durbin
(202) 224-2152 – phone
(202) 228-0400 – fax
Use Social Media to Get This Changed
Please use your social media network to get this changed – post the above on Facebook, LinkedIn, and others. Link to it from Twitter and push people to it via email.
10 Million people are negatively affected, hundreds of thousands have lost their subsistence living, and thousands are in immediate jeopardy of their lives – all because of Provision 1502. Please help us correct it immediately. Universal collateral damage to the innocent is simply not acceptable under any circumstance.
Thanks for whatever you can do!
Add Your Own
Thoughts
Holly Mais
09/19/11
Thank you for educating us. It seems there is always a fine line between helping these countries and supporting criminal elements. Knee jerk reactions always seem to be broad and suppressionistic causing unintended consequences as you’ve discussed instead of problem solving to include those who work for good. We need to step up to help those who endeavor to rebuild their economy and country and bring stability and sustainability to the D R Congo.
Kate Warren
09/19/11
oh no Chuck!
What a shame that a piece of legislation designed to protect people is liable to have the opposite effect. I’m adding my voice to yours. If there’s anything I can do to help, let me know.
Germaine Shema
09/20/11
Wow, this is weird somebody who’s concerned about Congolese miners’ life is calling for transperency refutal! Glad that at least your piece is a confession of how companies have been reaping up profits and nothing at all in return for local communities. Today because of Dodd-Frank, someone like you can in the end humanize mining in eastern Congo and realize that people need something in return. Thanks a thousand times to U.S legilslators. I hope people will finally understand that while disingenous arguments like yours might throw doubts, but this legislation is nothing else if not a tool to restore dignity and humanity in the Congio mining sector.
Some quick questions though:
-What’s your company’s name because I’ve never heard of it in Bukavu where I stay, who are those chiefs you’re in partnership with? when and where exactly did you try to start up your business? You seem to ignore that prior to U.S. companies boycott of Congo minerals, there has been a 6-month ban by Congo president? I also wonder whether you’re aware the conflict-free mines validation ongoing now by the UN, local mining industry and the government.
I don’t see any problem for you to source from those validated mines and comply with OECD guidelines, gentleman Chuck!
Clark Grey Howell
09/20/11
Thanks for bringing this to my attention. As you suggested, I have registered my concern with the SEC.
Chuck
09/20/11
Germaine,
Thanks for you comments.
We’re not calling for refuting transparency in any way. My Congolese partner and I have no background in mining and have no connection with any mining company. We are first and foremost concerned about the Congolese people, as you are.
We are social entrepreneurs who got into this business specifically and solely to create transparency with a clear and indisputable path directly from the chiefs without a dime going to conflict.
Our second purpose is to create local economies in the Congo by keeping profits local, which is why I am in business with a native Congolese, something multi-national corporations would never do.
This very well-meaning Dodd-Frank legislation has had just the opposite effect wanted. Our buyers have evaporated and the chiefs and their tribes that we are working are truly devastated and at great risk as a result. Their meager livings have been pulled out from under them by Dodd-Frank (unintentionally, but still reality). We are humanizing mining in the Congo with 10-20 year contracts and commitments to build water projects, roads, clinics, and schools, and the commitment to invest in local businesses and train them (large corporations will never solve poverty – a local economy full of small businesses is the only way to do it).
One of the reasons you may not have heard of Groupe Weyi is that we have no connection with or contact with any mining company. We’re taking the business away from Giant Corporation, Inc. and bringing it back locally where it belongs. We would not be on your radar as someone to protest against because we’re on your side.
I’m not sure what part of our argument you find disingenuous – we have no reason to tell what we see happening on the ground except to do the very things you want to do there – create a local economy and solve poverty there as quickly as possible.
You said Dodd-Frank would restore dignity and honor. Their is simply no one on the ground in the Congo who would agree with you right now. Not a single NGO has quoted a single miner saying that Dodd-Frank is restoring their dignity and honor. They are telling us the opposite.
Last month a major Chief cried uncontrollably on the phone as we told him the buyers had evaporated. Another Chief told me, “Chiefs don’t cry. When the Chief cries, it’s all over. There is no hope left.” Dodd-Frank is not restoring dignity and humanity in any way with those actually affected by it.
My partner, a Congolese chief, was born and raised in the Kisangani region and when I go I stay in a Congolese woman’s house who sees me as her son. I would be glad to introduce you to this chief and he can introduce you to chiefs who have signed contracts with us that can no longer be fulfilled.
I’m very aware the government did a 6-month embargo themselves, which was in response to Dodd-Frank, and which stopped everyone but the militia from selling minerals. So this was a terrible move that made the problem worse – I’m wondering why people keep bringing up that devastating government decision as if to defend this new one by Dodd-Frank?
I am also very aware of the validation process that is being undertaken. The Kimberley diamond process took two years, 10 months. This one is much more complex and wide-reaching. It will take every bit as long, likely much longer. We all thought the government was a few days late in responding to Katrina, yet somehow we’re okay with them taking years to resolve this while untold innocent people’s lives are in jeopardy.
It’s easy for you to say you don’t see any problem sourcing from the very few validated mines and complying with OECD guidelines. That’s a comfortable thing to say from the sidelines. But we can’t find a single smelter in the world who will touch Congolese minerals under any circumstances. Can you find us and our Chiefs just one?
Also, we are not the least bit interested in buying coltan from validated mines, which are all owned by Giant Corporation, Inc., and will do nothing to help local tribes. We want to help the tribes, not giant companies who own validated mines.
Germaine – here is the central issue. The militias and the conflict criminals need to be stopped. Until they are, nothing will change. They existed LONG before they found minerals as just ONE source of revenue, and they are already finding other sources of revenue.
The Dodd-Frank Act, while well-intentioned, is a nuclear option that affects every man, woman, and child who lives anywhere near a mine, even those mines that are hundreds of miles from the conflict zone which have never been part of the problem.
Getting rid of the militia is a targeted and simple solutions that include no collateral damage at all.
Dodd-Frank was all well-intended, but that doesn’t make it good or right. it is simply devastating to those on the ground in the mines who are not part of the problem. Will you work with us to help to find a better way to put the militia out of business that doesn’t devastate the entire region?
Max Karst
01/13/12
I agree that 1502 of Dodd-Frank has devastated the artisanal miners in DRC. For the past year and a half, I have supported a small startup co-op cassiterite mine in South Kivu and we cannot sell our production either. The missing piece of this puzzle now is funding the iTSCi bag-tag process to certify legitimate minerals as conflict-free. This procedure is working in Katanga, but seed money is needed to help Pact, the human rights group that oversees the tagging, get started in Kivu. To the tune of a few million dollars in USAID, or EICC (read Microsoft/Apple/Motorola/HP), or MinerAid Celebrity Benefit Concert funds, whatever, conflict-free mineral exports can begin again and local small scale miners can go back to work, supporting themselves and their families. If Dodd-Frank is the stick, help them dig their own carrots. Write all the above congresspeople and add Rep. Jim McDermott (WA) to the list, asking to fund the bag-tag system in the Kivu’s.
Chuck
01/14/12
Max,
Thx for your comment. iTSCi, of which we are a member, could have started in the Kivus, but decided to start in Katanga and Rwanda because they are largely conflict-free. How stupid is that?? Isn’t the whole point to certify conflict-free mines in the conflict area? They won’t go into the Kivus until they aren’t so dangerous – completely nullifying the whole certification purpose.
Also, Motorola/AVX and the others have zero incentive to fund the Kivus. The mine in Katanga is owned and operated by some of these giant corporations, and funding iTSCi to certify artisanal mines in the Kivus creates direct competition for them. Right now they have the opportunity to squeeze out all artisanal mining and take over all the mines in the area, allowing giant multi-corporations to control the whole thing while the locals are once again reduced to low-paid workers who don’t own anything.
Further, even if iTSCi were successful in certifying these small artisanal mines, the 20 or so smelters of coltan/tantalum in the world are not going to buy from them – the PR risk created by groups like Enough Project and Global Witness is simply too big a risk to take when the same minerals are available a dozen other places in the world without these NGOs breathing down your back.
The two largest coltan smelters in the world have said in writing on their web pages that they will never buy from central Africa again, even if a certification process is in place. The PR risks just aren’t worth it.
Turns out Dodd-Frank isn’t really the problem – it’s the poisonous message of Enough Project and Global Witness that “cell phones are evil” and “minerals are evil”.
The criminals are the problem, not the minerals. But nobody is going after the cause because you can’t make money as an NGO by requiring that the UN, US, and Kinshasa all grow a spine and clean out the criminals.
“Cell phones are evil” raises millions for Enough and Global. “Criminals are evil” wouldn’t raise a dime.