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Ahead of SEC decision on 'blood minerals' disclosure, US tech industry takes steps toward compliance

  • gold miner Congo.jpg

    Feb. 23, 2009: A gold miner scoops mud while digging an open pit at the Chudja mine near the village of Kobu in north-eastern Congo.Reuters / Finbarr O'Reilly

  • Men work in a gold mine Congo.jpg

    Men work in a gold mine in Chudja, north eastern Congo -- one of the area in which so-called "conflict minerals" are mined.AFP Photo / Lionel Healing

So-called “blood diamonds” or conflict diamonds are the well-publicized face of the decades-long human rights challenge in Africa. But the mining and sale of a lesser-known but more widely used group of natural resources known as “blood minerals” has fueled civil wars in Congo and Uganda and gone largely unheard in the U.S. -- even though you’re probably holding them in the palm of your hand.

Raw minerals such as copper, titanium, tantalum, niobium -- even gold -- are used in the car and aerospace industries, medical devices and more, as well as the latest smartphones including the rumored iPhone 5 and many Android phones.

World trade organizations such as The Organization for Economic Co-operation and Development (OECD) publish guidelines for companies that deal in such minerals, which are often mined by children and fuel a conflict by armed groups that has persisted for more than 15 years with more than 5 million people killed.

'For 17 years companies have helped fund this horrific war [in Congo and Uganda].'

- Congressman Jim McDermott

Congress sought to address the issue through the 2010 Dodd-Frank Act, which included a requirement for companies to disclose conflict minerals. Last year, the Securities Exchange Commission (SEC) opened a public debate about whether your next phone should include this disclosure -- but Rep. Jim McDermott, D-Washington is critical of the process.

“They are afraid of being sued by the U.S. Chamber of Commerce, the National Association of Manufacturers and the World Gold Council,” McDermott told FoxNews.com. “For 17 years companies have helped fund this horrific war [in DRC and Uganda], and this law requires companies to be honest about how they source. It's just terrible that companies are having their business associations intimidate the SEC."

McDermott says the problem of reporting conflict mineral use stretches far beyond tech gadgets. He says Honda, Tiffany & Co., Kraft, Boeing, and Caterpillar are the worst offenders. Of the tech companies, he said Microsoft, Motorola, and AMD are better at reporting about conflict minerals.

While a ruling about the disclosure is imminent, SEC spokesman John Nester told FoxNews.com that it could still be a few weeks. “We’re putting this into a practical effect so that companies can comply with it,” Nester said.

But ahead of the SEC ruling, Sprint has made the first baby steps to come to terms with the controversy. The company has joined the Global e-Sustainability Initiative (GeSI) and the Public-Private Alliance for Responsible Minerals Trade (PPA). Both organizations help identify the source for minerals and help companies audit the use of conflict minerals.

Allison Gregg, Sprint spokeswoman for the company’s sustainability and environmental efforts, said it is working to make device manufacturers aware of the issue. One issue she sees is that some companies are waiting for the SEC ruling before acting, which is not helping.

Learn more

The Democratic Republic of the Congo (DRC) is a Central African country with vast mineral wealth, including reserves of tin, tantalite, tungsten and gold -- minerals often used in consumer electronics. 

Armed groups fighting for control of those mines have been cited for violent crimes including murder, rape and forced labor.

Learn more directly from the manufacturers:

Apple 2012 sustainability report

Samsung statement on conflict minerals

LG statement on conflict minerals

“We are not sitting in a vacuum,” she told FoxNews.com. “We have multi-stakeholder groups that we are involved in to track what is going on in the area and we are ready to go when the reporting [is required].”

The GeSI initiative in particular will help certify “smelters” (which produces metal from ore) in Congo that follow an acceptable process. Gregg says Sprint supports more auditing of these materials.

One leading vendor, Samsung, has disclosed its process for dealing with conflict minerals. Company officials in Korea told FoxNews.com it recently investigated smelters use of such minerals and will publish results in a 2012 Sustainability Report.

There are ways to make wise decisions now about the gadgets you use, however.

Raise Hope for Congo has a scorecard for how device makers are addressing conflict mineral audits. Canon, Panasonic, Sharp, and others rate poorly, while HP and Motorola rank high. No company earns the group’s gold star.

“Some cell providers and manufacturers have been supportive of the intent of these regulations and have been proactive in developing supply chain policies that address conflict minerals ... others have been on the sidelines and are just waiting for the final regulations before acting,” said Chris Meyer, a spokesperson for Everence, a faith-based financial services company that has taken an active interest in the issue of conflict minerals.

A few U.S. cities have taken dramatic steps to address the problem as well. In Edina, Minn., a suburb of Minneapolis, officials recently approved a measure that encourages all government purchases to consider conflict-free gadgets first. Lisa Schaefer, a city employee, says the city will look for alternatives from companies like HP first, based on the Raise Hope for Congo scorecard.

Some argue that U.S. tech companies would spend billions to address the problem, since Congo is a leading mineral exporter. Others say there are legitimate “artisanal” workers there who make a living from mining. The SEC ruling will at least set the record straight. According to Meyer, a ruling will force tech companies to show their hand and fess up to their trade practices.

Meyer also says a few tech companies are already preparing to release “conflict-free” phones. That means consumers will at least have a choice about which phones to buy using which materials.