A new report from the Government Accountability Office finds that the Securities and Exchange Commission’s 2012 conflict minerals disclosure rule has not reduced violence in the Democratic Republic of the Congo and has likely had no effect in adjoining countries either.
The SEC rule requires certain companies to file reports on their use of tantalum, tin, tungsten, and gold, which are mined in the DRC. Companies comply with this rule by submitting a disclosure describing their “reasonable country-of-origin inquiries” about the origin of conflict minerals in their products. In certain circumstances, companies must then conduct due diligence to determine their conflict minerals’ source and custody. The GAO states that in 2023 an estimated 63 percent of companies made preliminary determinations, based on their inquiries, about their conflict minerals’ origins. Of those that then performed due diligence, an estimated 62 percent reported being unable to determine the minerals’ source.
According to the GAO, the SEC rule has encouraged companies to improve reporting of conflict minerals’ sources by tracking their chain of custody. It has also helped raise international awareness about the risks that minerals will benefit armed groups and thus support violence.
However, the GAO states that it found no empirical evidence that the rule has decreased the occurrence or level of violence in the eastern DRC, where many mines and armed groups are located. In fact, the GAO found that the rule was associated with a spread of violence, particularly around informal, small-scale gold mining sites. This may be partly because armed groups have increasingly fought for control of gold mines since gold is more portable and less traceable than the other three minerals. Further, the GAO found that the number of violent events in adjoining countries did not change in response to the SEC rule.
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