Posted by: Home Strange Home | July 27, 2009

UK Companies Purchasing Conflict Minerals

Global Witness, a policy and advocacy organization that campaigns to expose and put an end to corrupt exploitation of natural resources and resource-fueled conflict, released a report last week regarding the contribution of foreign companies to the ongoing conflict in North and South Kivu in the eastern region of the Democratic Republic of Congo near the border with Rwanda and Burundi. 

Here a number of minerals are mined, including gold, coltan, and tin ore, from mines that are controlled by armed militias, be they rebel or government soldiers.  Both groups have been accused of using extortion and forced labor in the local communities to extract minerals from the mines in the most primitive fashion.  The proceeds from these activities fund the armed groups and contribute to the ongoing conflict.  

Global Witness identified a number of foreign companies that use suppliers who are trading with warring parties.  By trading in war minerals and thereby providing funding to armed groups, these companies are contributing to the violent conflict.  Two of the companies named are London-based companies: Amalgamated Metals Corporation Plc, which owns Thaisarco, a Thai tin smelter, and Afrimex, which has been accused of making payments to rebel groups and buying minerals mined using forced labor and child labor. 

The UK is the largest bilateral donor to the Democratic Republic of Congo, so there is a certain irony in the fact that DFID is working to reduce armed conflict in the region whilst some British businesses profit from the conflict.  The situation in Congo is a good example of the so-called “resource curse,” whereby developing countries with an abundance of high-value natural resources (particularly oil and minerals) tend to have slower economic growth and a higher likelihood of armed conflict.  

Rather than engaging in productive economic activities and having to depend on their citizens for tax income, resource-rich states lose accountability and become rent-seeking societies, with rival groups competing to gain access to the resource rents.  Efforts have been made in recent years to counteract this process from the outside by instituting sanctions against certain commodities originating from conflict zones, most notably the Kimberly Process established in 2003 to regulate the diamond market and stem the flow of so-called “blood diamonds” out of the likes of Angola.  

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: