Chaos in the Congo

7 Feb 14
Michael Ware

The US has passed legislation that prevents the sourcing of ‘conflict minerals’ from the Democratic Republic of Congo. The move is well intentioned but has produced unintended consequences for workers in the country

When I was an earnest 17-year-old Marxist, I was a big boycotter of things. I would angrily eschew Israeli tomatoes, South African oranges and even Coca-Cola in the fervent belief that these oppressive regimes would eventually see my point and wearily throw in the towel.

Thirty years later, the world is still a less than universally happy place but boycotting things seems to have gone out of fashion. We all consume too much stuff these days and, although the underlying contents of some of that stuff comes from fairly nasty places, giving it up is just too hard and too dreary.

This is particularly the case when it comes to electronic devices such as mobile phones and laptops. These all contain small amounts of copper, gold and rare earth minerals which in turn tend to be mined in grim locations by regimes with a somewhat relaxed attitude to things like environmental impact, minimum wages and human rights.

The worst example of this is the Democratic Republic of Congo. As well as hosting the most lethal war of our lifetimes, this happens to be the home of up to 65% of the world’s reserves of tantalum, a metal that is present in tiny quantities in every electronic device you own. This little publicised but horrific civil war has gone on for about 25 years and has claimed the lives of at least 5.4 million people either directly or through consequential starvation and disease. As many as two million of these were under five years old.

Now it is too glib and simplistic to say these people are only fighting over the rights to the tantalum mines in the Eastern Congo and if you and I gave up our mobile phones they would all stop and work together to set up a Joseph Conrad theme park instead. It is more realistic to say that that at least some of the $3.4bn worth of minerals that is exported to the West every year is being used to fund the war.

Now let’s not be too hard on the mobile phone companies about this. The angry Congolese have been fighting over something for a long time now but that something has always tended to be something that we in the West are willing to buy such as gold, copper and diamonds.

What is surprising is that the deaths of 5.4 million people in a war being funded by our insatiable appetite for gadgets and gizmos has not caused more outrage in Europe from people who spend their lives being outraged by foreign wars. The BBC employs 200 news correspondents but only rarely do we hear from our own correspondent in Kinshasa.

This is lazy but understandable pragmatism. Kinshasa is 3,960 miles from Broadcasting House, it is home to nasty diseases such as the Ebola virus and, to be fair, it is probably a tad alarming doing a breathless two-minute spiel to camera when you are surrounded by drugged up ten-year-olds twitchily holding AK47s.

What is less understandable is why the safely armchaired but shouty liberal left have also been so muted about all this. In the UK alone, one million people attended the protests against the Iraq war, but most of them seem to be prepared to let this one slide.

In stark contrast to our European indifference, the link between rare earth minerals and the Congo has received much more publicity in America where President Obama has recently passed the Dodd-Frank act. This is a wide-ranging reform of Wall Street that, in section 1502, contains an obscure provision requiring the likes of Apple and Intel to certify that components of their gadgets are not sourced from the Congolese mines owned by the militia.

On the face of it, this is a bold and inspired piece of legislation particularly when you think that in comparison the UK’s brave parliamentarians are currently arguing about exactly how many dogs you can use to drag a terrified fox from its lair in order to kill it. Is it two or should it be more? Discuss.

Now I say ‘on the face of it’ because the actual consequences of the Congo-related bit of the Dodd-Frank Act have been somewhat less than positive. Because of the lobbying process to get it passed, not buying electronic gadgets containing rare earth metals briefly became a way of flouting your caring liberal credentials.

The big corporations spotting that they were all being tarred with the same nasty guy brush, decided that dealing with the Congo was all too hard and took to sourcing their minerals elsewhere. Overnight legitimate mineral exports from the Congo to the West dropped by 90% although to everyone’s surprise exports from neighbouring countries that are a bumpy truck ride away from the militia-controlled mines have apparently shot up. As the Americans say, go figure.

It is also reported that more hard-nosed Chinese buyers have moved in onto the vacated US turf and because they are no longer buying in competition with Apple and Intel they are paying a lot less per tonne.

All of which has meant the income and employment prospects of your average Congolese miner has dropped off a cliff but now lots of angsty US liberals feel good about themselves because they got ‘the man’ in Washington to change the law against the ‘interests of big business’. My teenage self would have been ecstatic.

So boycotting things to try and change regimes has long been passé in Europe, but is seemingly still all the rage across the Atlantic. However, what seemed like a good idea in downtown Washington has played out differently in the forests of the eastern Congo and I suspect this fact has not been lost on a newly unemployed tantalum miner.

So although there is a link between our insatiable consumption of electronic goods in the West and the deaths of children in Africa, the adverse impact of the Dodd-Frank Act has highlighted our Western impotence to break it. A lot of people have died in this war over the last 20 years and although the tantalum in your new Christmas laptop is probably paying for the current fighting, don’t kid yourself that not buying one is going to stop it.

Some issues are so dark and dense that they are beyond the gravitational pull of well-intended Western legislation. Sometimes conflicts are so embedded that they are not going to be solved in our lifetimes.  Sometimes what you do or don’t buy doesn’t count for anything at all.

Michael Ware is corporate finance partner at BDO

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