U.S. Agencies Have Taken Actions Related to Responsible Sourcing of Conflict Minerals, but Commerce Has Not Yet Fulfilled Its Requirements

Since the Act was passed in 2010, State, USAID, SEC, and Commerce  have undertaken activities related to implementation of the Act’s conflict  minerals provisions, including activities related to responsible sourcing of  such minerals from the DRC and adjoining countries. SEC issued its required  conflict minerals rule in 2012. Standard practices in  program and project management and execution include, among other  things, developing a plan to execute specific projects needed to obtain  defined results within a specific time frame. State and USAID Developed a Strategy, and State Produced a Conflict Minerals Map

Responding to the Act, State and USAID developed a strategy in 2011 to  address the linkages among human rights abuses, armed groups, the  mining of conflict minerals, and commercial products. However, Commerce officials stated that they did not  have a timeframe for completing the final list for Congress. In addition,  Commerce officials mentioned that some conflict minerals data may be  inaccessible to the U.S. government because a large number of conflict  mineral smelters are in China.timeframes could better position Commerce to report on the status of its  efforts to compile a list of conflict minerals processing facilities worldwide  and to hold its personnel accountable for completing its related activities. Stakeholder Initiatives Are Expanding and Provide Some Information on Sourcing of Conflict Minerals

Since we reported in July 2013, stakeholders have expanded existing  initiatives and added new initiatives focused on responsible sourcing of  conflict minerals in the DRC and adjoining countries, to include new mine  sites, countries, and smelters. Some of these initiatives have yielded  publically available information, including data on production of conflict- free minerals and export data, as well as reports on the progress and  results of the initiatives. The Conflict-Free Sourcing Initiative (CFSI) has expanded in several  aspects related to responsible sourcing. The number of smelters that the program has certified as  conflict-free has expanded from 26 smelters in summer 2013 to 85  smelters as of April 25, 2014 (see table 1). These reports provide production and export data for tin,  tantalum, and tungsten, including amounts traced through the iTSCi  program, from three provinces in the DRC and Rwanda, as well as the  mineral sales in U.S. dollars (for more details, including the applicable  quantitative data, see app. Recommendation for Executive Action

To give Congress a sense of Commerce’s efforts to produce a listing of  all known conflict minerals processing facilities worldwide, as required by  section 1502 of the Dodd-Frank Wall Street Reform and Consumer  Protection Act, we recommend that the Secretary of Commerce provide  to Congress a plan that outlines the steps, with associated timeframes, to  develop and report the required information about smelters and refiners of  conflict minerals worldwide. Commerce concurred with our recommendation and  noted that it will submit a listing of all known conflict minerals processing  facilities worldwide to Congress by September 1, 2014. Appendix I: Objectives, Scope, and Methodology

To determine the extent, if any, to which relevant U.S. agencies have  engaged in activities related to responsible sourcing of conflict minerals,  we interviewed officials who are cognizant of conflict minerals issues from  the Departments of Commerce and State (State) and the United States  Agency for International Development (USAID), and the Securities and  Exchange Commission (SEC). We reviewed Section 1502 of the Dodd- Frank Wall Street Reform and Consumer Protection Act (Pub. To analyze what is known about the status of, and any information  provided by, initiatives focused on responsible sourcing of conflict  minerals from the DRC and adjoining countries, we interviewed officials  and reviewed and analyzed documents from State, USAID, and the  United Nations Group of Experts on the Democratic Republic of the  Congo (UNGoE); interviewed representatives and reviewed and analyzed  guidance documents, reports, and presentations from foreign  government, industry associations, multilateral organizations, companies,  and nongovernmental organizations (NGOs).
Why GAO Did This Study

Armed groups in eastern DRC continue to commit severe human rights abuses and profit from the exploitation of minerals, according to reports from the United Nations. Congress included a provision in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act to address the trade in “conflict minerals”—tin, tantalum, tungsten, and gold. Section 1502 of the Act directed several U.S. agencies to report or focus on issues related to conflict minerals.
This report examines, among other things, (1) the extent to which relevant U.S. agencies have undertaken activities related to responsible sourcing of conflict minerals and (2) what is known about the status of, and information provided by, stakeholder initiatives focused on responsible sourcing of conflict minerals from the DRC and adjoining countries. GAO reviewed and analyzed documents and data covering 2003 through 2014. We interviewed representatives from State, USAID, SEC, Commerce, nongovernmental organizations, industry, and international organizations who are cognizant of conflict minerals issues.

What GAO Found

Since the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act) was passed in 2010, relevant U.S. agencies have undertaken various activities related to responsible sourcing of conflict minerals from the Democratic Republic of the Congo (DRC) and adjoining countries. In response to the Act, the Department of State (State) and the U.S. Agency for International Development (USAID) developed a strategy in 2011 to address the linkages among human rights abuses, armed groups, and the mining of conflict minerals and are implementing various strategy objectives. The Securities and Exchange Commission (SEC) issued a rule in 2012 requiring certain companies to disclose the source and chain of custody of necessary conflict minerals in their products. However, the Department of Commerce (Commerce) has not yet compiled a list of all conflict minerals processing facilities—smelters and refiners—known worldwide, required by January 2013 by the Act. Commerce cited difficulties with, for example, tracking conflict minerals operations but told GAO that it had completed outreach efforts with the majority of stakeholders. Commerce did not have a plan of action, with associated time frames, for developing and reporting on the list of conflict minerals processing facilities worldwide. Standard practices in program and project management include, among other things, developing a plan to execute specific projects needed to obtain defined results within a specific time frame. An action plan with timeframes could better position Commerce to report on the status of its efforts to produce a final list to Congress and to hold its personnel accountable for completing activities.
Over the past several years, a number of stakeholders—foreign governments, multilateral organizations, and industry associations, among others—have expanded, or made plans to expand, initiatives focused on responsible sourcing of conflict minerals in the DRC and adjoining countries. These stakeholder initiatives, such as in-region tracing of conflict minerals and development of guidance documents and audit protocols, have grown to include new mine sites, countries, and smelters. For example, the Conflict-Free Smelter Program, an industry-led effort, has expanded from 26 smelters certified as conflict-free in 2013 to 85 smelters as of April 25, 2014 (see table). New stakeholder initiatives are also underway or planned in the region, including the first responsible sourcing initiative in the Congo-Brazzaville. Some initiatives have yielded publicly available information, including data on production of conflict-free minerals and export data. For example, one stakeholder has reported production data for tin, tungsten, and tantalum from three provinces in the DRC and in Rwanda.
Source: Conflict-Free Sourcing Initiative data, GAO (analysis).

What GAO Recommends

GAO recommends that the Secretary of Commerce provide Congress a plan that outlines the steps, with associated timeframes, to develop and report the required information about smelters and refiners of conflict minerals worldwide. Commerce concurred with GAO's recommendation and noted that it will submit a listing of all known conflict minerals processing facilities worldwide to Congress by September 1, 2014.