Addressing the humanitarian tragedies that have given rise to rules governing how certain minerals can and cannot be procured on the global market is truly sensitive. Let me therefore make several things immediately clear:

• First, IBM has long practiced due diligence in its supply chains, including where it relates to the so-called conflict minerals (gold, tin, tantalum and tungsten – or 3TG).
• Second, we wholeheartedly support any meaningful effort to reduce the suffering of people in parts of the world where those minerals are procured, primarily the Democratic Republic of the Congo and Africa’s Great Lakes Region.
• Third, we have led cross-industry efforts to develop frameworks and best practices to guide the responsible sourcing of 3TG and other minerals by manufacturers and their suppliers, even while our use of those minerals in manufactured goods has decreased significantly through the evolution of IBM’s business.
• And finally, we engage with the NGO community in efforts to monitor and report on conflict minerals accountability in the electronics sector.

One way the United States has attempted to enshrine supply chain responsibility in law is through section 1502 of the 2010 Dodd-Frank financial reform law. Known as the “conflict minerals rule,” Sec. 1502 was intended to improve the humanitarian situation in the affected African countries, decrease access to funding for armed groups trafficking in conflict minerals, and provide greater physical and economic security for people in the region. While well-intentioned, and while IBM complies fully with Sec. 1502’s annual disclosure and filing requirements (indeed, IBM filed its 2016 disclosure today – it is available here), we believe the rule is a misguided and ineffectual means to achieve U.S. policy objectives. It is time for Congress to repeal Sec. 1502.

It is clear from both recent testimony before the Senate Foreign Relations Committee and comments filed with the Securities and Exchange Commission (SEC) that armed groups are still trafficking in conflict minerals, and finding new and violent ways to control 3TG mines and the people who mine them. The result? Continued growth in illicit and unregulated trade in 3TG minerals with no resolution to the humanitarian crisis. The SEC, tasked with enforcing 1502 and recognizing its severe shortcomings, has even gone so far as to state publicly that it will no longer enforce portions of the rule. And in some instances, the cost of complying with 1502 has led businesses to pull out of certain regions. This creates a de facto embargo that delivers a crippling blow to local African economies and adds further suffering to those communities.

Responsible companies have responsible supply chain practices, and already take appropriate measures to protect against abusive practices by their suppliers.  Excessive and bureaucratic reporting requirements do nothing to solve the problem, and indeed can worsen the plight of those in conflict zones by leading companies to avoid or boycott them entirely.

In place of Sec. 1502, the U.S. government should partner with private industry and the governments of Africa’s Great Lakes Region to establish practices that truly target illicit trade in conflict minerals without exacerbating humanitarian conditions. Specific initiatives with the power to affect lasting and positive change include increasing international development aid, bolstering on-the-ground peacekeeping missions, expanding sanctions targeting specially designated nationals (SDNs), or even using emerging technologies to increase supply chain accountability. Action, not reporting, is the key to solving the conflict minerals problem and delivering much-needed help to the people affected.

-Christopher A. Padilla, Vice President, IBM Government and Regulatory Affairs

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