On July 8, 2024, the government of the United States of America released a statement of concern related to certain mineral supply chains from Rwanda and eastern Democratic Republic of the Congo, which, it noted, contributes to the ongoing conflict in the region.
The United States further recognised the role of illicit trade and exploitation of artisanally and semi-industrially mined gold and tantalum from the African Great Lakes region, which, it added, continues to play a significant role in financing conflict. It noted that minerals directly or indirectly benefit groups and move out of DRC through Rwanda and Uganda to major refining and processing centres and capital cities of the world.
The USA further noted that these supply chains facilitate illicit exploitation and taxation of these minerals, often involving acts of corruption. The statement further raised concerns over upstream mineral supply chains such as mineral extraction, transportation and export, which involve a wide range of human rights abuses of forced labour, worst forms of child labour, violation of DRC’s minimum employment age, sexual and gender-based violence, particularly in artisanal mining areas.
The United States concluded its statement of concern by encouraging reforms of flawed industry-led traceability initiatives in the region through greater transparency and stronger due diligence mechanisms.
It acknowledged the risks associated with human rights abuses, corruption, and conflict financing in escalating the renewed and ongoing M-23 serious conflict, particularly since 2023.
It should be noted that several reports on this issue have been released by the UN Group of Experts since the 1990s when regional forces clashed in DRC with little or no solution to this continued human bloodbath at the hands of militia groups in eastern Democratic Republic of the Congo.
The Great Lakes regional member states must, therefore, step up to the plate and decisively address the issue of conflict minerals and conflict financing under the International Conference of the Great Lakes Region (ICGLR) platform.
It should be remembered that the Lusaka Declaration of the ICGLR Special Summit to Fight Illegal Exploitation of Natural Resources in the Great Lakes Region, held in Lusaka, Zambia, in 2010, laid out a comprehensive approach for curbing the illegal exploitation of natural resources through the implementation of the six tools, namely: (1) Regional certification mechanism, (2) Harmonization of national legislation, (3) Regional database on mineral flows, (4) Formalization of the artisanal mining sector; (5) Promotion of the Extractive Industries Transparency Initiative (EITI) and (6) a whistle-blowing mechanism.
To date, only a few countries of DRC, Rwanda, Burundi, Tanzania and Uganda have made great strides in domesticating and implementing one of the most critical tools to curb illicit mineral trade in the region, the Regional Certification Mechanism (RCM). Notably, the financing of this process remains in the hands of international organisations and global North countries, with little financial support from regional member states.
To date, the chains of custody systems in these countries are either privately owned by smart businessmen from the West or international non-governmental organisations linked to downstream refiners and consumer countries in the global North. The same goes for national mining cadastre systems in these countries, raising mineral and national security concerns in these member states.
Foreign chain of custody (CoC) systems such as the International Tin Supply Chain Initiative (ITSCI) operating in in the Great Lakes region have faced accusations and criticisms related to regional conflict and conflict financing, ineffective monitoring, lack of transparency, collusion with artisanal mining militia groups, failure to address human rights abuses, inadequate conflict mineral reporting, over-reliance on industry self-reporting, lack of engagement with local communities, inadequate response to conflict financing risks and outright exploitation of down-stream mineral dealers and exporters for them to access international commodity markets.
The London Bullion Market Association (LBMA), a global standard for gold trade, stands accused of ‘marking its own exams’ by developing and auditing its own chain of custody system, complicity in human rights abuses in North Mara in Tanzania, supporting artisanal and small-scale groups with questionable practices, failing to ensure responsible sourcing, ignoring community concerns, lack of transparency and conflict of interest.
Countries such as Uganda, where the Bank of Uganda has just entered the gold reserve markets, are, therefore, advised against such blacklisted downstream-led chain of custody systems because of the highlighted risks. Build your own national gold CoC system or the UN Group of Experts and international NGOs are coming for you.
If you do not believe me, ask the old man of the clan, Andrew Mwenda. Under the Regional Certification Manual of the Regional Initiative Against the Illegal Exploitation of Natural Resources (RINR), a CoC means a record of a sequence of individuals or entities which have custody of designated conflict minerals such as the 3TGs (tin, tantalum and tungsten) and gold as they move through the upstream supply chain from mine gates to ports of export or to refiners, with associated records of the lots being moved and the actions performed on the lots at any given point in the mineral chain.
On the other hand, a chain of custody system means a system that can track mineral flows from a valid mine site to the point of export, demonstrating for each export of designated minerals the status of the mine site or sites from which the minerals originated, and any intermediate mineral chain actors who handled the minerals or portions of the minerals between mine site and exporter.
Under the OECD Due diligence Guidance on Responsible Supply chains of Minerals from Conflict- Affected and High-Risk Areas, countries such as Uganda, Rwanda, DRC, Burundi, Tanzania, Zambia, Angola, Congo-Brazzaville, South Sudan, Central Africa Republic and Kenya are considered conflict-affected and high-risk countries because of their proximity and involvement in the conflict in mineral-rich eastern DRC, home to the largest coltan mines in the world.
It is for these reasons that these countries must build and establish their own nationally-owned and managed chain of custody systems in order to trace all designated and critical minerals within their borders as opposed to surrendering this noble responsibility to profit-driven chain of custody developers and actors in the global North.
By building its own mineral chain of custody and traceability systems, a country can ensure control and exercise sovereignty over its mineral resources. This can enhance national security and sovereignty, capture and retain supply and value chain economic benefits, promote transparency and accountability, protect the environment and human rights, develop local skills and create jobs for Gen-Z and women groups.
It can further improve mineral sector national data collection and analysis for improved sector policy decision-making and revenue generation, reduce the risk of conflict minerals and enhance regional and international cooperation.
These systems are critical in fighting cross-border mineral smuggling, organized crime, militias, illicit financial flows, human rights abuses and illicit mineral trade. Ultimately, regional national mineral sector chain of custody systems will lead to a secure, prosperous, and responsible mineral sectors, enabling regional member states to reclaim ownership of strategic mineral resources while at the same time de-risking these countries from UN sanctions.
The writer is a former chairman of the ICGLR-Mineral Audit Committee, and is executive director at Africa Centre for Energy and Mineral Policy.