The European Commission on Tuesday (19 May) said mandatory requirements on EU companies to trace conflict minerals would hurt trade.

EU trade commissioner Cecilia Malmstroem told MEPs in Strasbourg that a mandatory scheme could increase the risks of “disrupting global supply chains” and could drive trade “away from Africa altogether”.

“It is crucial to understand that there is no silver bullet to deal with this problem,” she said.

The Brussels executive introduced a bill last year to prevent warlords and other armed groups in the Democratic Republic of Congo (DRC) and elsewhere from making money on the mineral trade.

Despite recent tweaks by the European Parliament’s international trade committee, the bill remains largely voluntary and only covers tin, tantalum, tungsten and gold ores.

The metals are used in smart phones and other electronic devises. Some 35 percent of the global mineral trade is in the EU.

The parliament’s version requires the around 20 smelters and refiners in the EU to source the precious metals.

But the estimated 880,000 EU-based companies selling products that contain the metals would remain exempt.

Set for a plenary vote on Wednesday, debate around the bill has become more heated with MEPs subject to heavy lobbying by big tech firms.

The bill is inspired, in part, by the 2010 US Dodd-Frank Act. But unlike the EU bill, the Act requires manufacturers to audit their supply chains and report and make public any instances of conflict minerals being used.

Voluntary approach

The parliament’s lead negotiator on the bill, centre-right Romanian Iuliu Winkler, backs a voluntary approach.

“It does not unilaterally impose obligations on EU companies, it respects and ensures a continuous uptake of the minerals market towards responsible conflicts free certification,” he said.

Malmstroem, for her part, said the mandatory scheme would create severe mineral shortages for EU companies without making any notable difference to people living in the conflict zones.

She noted a review clause, inserted into the bill, would allow legislators to change their minds later should the voluntary scheme not work out as planned.

Mandatory approach

But not everyone was convinced.

Italian Gianni Pittella, who heads the parliament’s centre-left group, said obligatory traceability for minerals along the entire supply and trade chain is needed.

“We, the socialists will not support a fictitious bit of regulation, a bluff, simply something that really doesn’t affect major financial interests,” he said.

German Green Ska Keller said the proposals by the commission and the parliament committee fail to address human rights.

“Voluntary self-certification doesn’t work. It is possible even now to do that but only 12 percent of companies avail themselves to that possibility and they only do it because they want to export to the US market,” she said.

On Monday, some 150 civil society organisations published an open letter to the European Parliament to back mandatory sourcing of the minerals.

“The weak proposals on the table would leave Europe lagging behind global efforts, including mandatory requirements endorsed by the US and by twelve African countries,” it says.

Amnesty International and Global Witness in a joint-statement said the minerals trade has fuelled deadly conflicts in the Central African Republic, Colombia, and the Democratic Republic of Congo. Those conflicts have displaced 9.4 million people.

Heavy lobbying to weaken bill

Meanwhile, big electronic companies like Intel and Ericsson as well as car producers Renault and Citroen have lobbied MEPs to get their views across.

One source close to the issue said The American Chamber of Commerce has attempted to use the debate to undermine the Dodd-Frank in the US.

Green MEP Reinhard Butikofer in February told members of the parliament’s foreign affairs committee that lobbyists wanted him to weaken the bill and the US act.

“I have been approached by lobbyists that have clearly argued they want to have a weak European regulation, much weaker than Dodd-Frank, in order to use that afterwards as a level to undercut or undermine Dodd-Frank in the transatlantic negotiations,” he said.