Department of the Interior, Environment, and Related Agencies Appropriations Act, 2018

Floor Speech

BREAK IN TRANSCRIPT

Mr. Chairman, this misguided provision in Dodd-Frank requires the Securities and Exchange Commission to mandate that public companies disclose whether so-called ``conflict minerals'' they use in their products benefit armed groups in the Democratic Republic of the Congo and its nine adjoining countries.

Despite its best intentions, section 1502 has been ineffective and, in some cases, has been shown to have increased violence is central Africa. That is why this suspension that I am proposing passed the House last year as an amendment to the FSGG appropriations bill, and a full repeal of section 1502 passed the House this Congress as part of the Financial CHOICE Act.

Conflict minerals refer to tin, tungsten, tantalum, and gold, which have been used in a variety of products, from cell phones, cosmetics, jewelry, footwear, apparel, and even auto suppliers located in west Michigan.

Mr. Chairman, the breadth of voices opposing section 1502 is remarkable, and I would like to start with those that matter most. For too long, the people of central Africa have been overlooked in this debate, even though they are the ones who suffer from Dodd-Frank's unintended consequences.

I include in the Record an open letter from 70 Congolese leaders and other regional experts.

BREAK IN TRANSCRIPT

Mr. Chair, they state in the letter that section 1502 provisions ``. . . inadvertently incentivize buyers on the international market to pull out of the region altogether and source their minerals elsewhere.

``As a result, the conflict minerals movement has yet to lead to meaningful improvement on the ground, and has had a number of unintended and damaging consequences.''

Dodd-Frank's impact on African miners may seem unimportant to many rich-country activists, but in the Congo, it has been the question of life or death.

According to a Washington Post article entitled ``How a well- intentioned U.S. law left Congolese miners jobless,'' section 1502 ``set off a chain of events that has propelled millions of Congolese miners and their families deeper into poverty.''

The article goes on to share the story of how a Congolese teenager could no longer feed himself after Dodd-Frank ravaged the country's mining sector, forcing the young man to actually join an armed group; the outcome diametrically opposed in the goal of section 1502.

Mr. Chairman, no one can claim that these effects were unforeseeable.

In fact, in a letter to the SEC commenting on section 1502, leaders from three Congolese mining cooperatives predicted that the conflict minerals rule would lead to a devastating boycott.

These miners wrote: ``We cannot continue to suffer any longer. Do we now have to choose between dying by a bullet or starving to death?'' I ask my colleagues to remember the Congolese aren't alone in their suffering. The SEC's rules apply to nine other nations as if they were all one single country. Section 1502 treats over 230 million Africans living in 10 distinct nations as one undifferentiated group.

Dodd-Frank's supporters will say that at this point, some countries neighboring Congo may help smuggle minerals on behalf of armed groups, which is why we need to paint with such a broad brush. But I would ask my colleagues to name another example where a country's economy and each of its neighbors is targeted due to a presumed smuggling risk.

Do we design Russia sanctions to apply to each of its 14 adjoining countries, too?

Do Iranian sanctions implicate all seven of its neighbors? Perhaps advocates for section 1502 believe that there is no smuggling from Russia and Iran, but the real issue seems to be this: Dodd-Frank supporters have no problem treating Africans differently from other regions of the world.

I find that troubling. So now let's consider implementation of section 1502 itself.

In April of this year, the GAO reported that section 1502 has produced little meaningful information on conflict mineral sourcing. It found that more than half of the companies in 2016 couldn't even determine what country their minerals came from. Most importantly, virtually none of the companies could tell whether their minerals benefited armed groups, a conclusion that echoed GAO's findings from 2015 and 2014 as well.

No wonder companies can't figure this out, Mr. Chairman. Even the Department of Commerce has reported that it is unable to determine whether smelters around the world use minerals traceable to armed groups. In other words, Dodd-Frank is asking U.S. companies--some of which are very small and medium-sized entrepreneurs in large corporations' supply chains--to produce information that even the Federal Government can't provide.

As if that weren't enough, the courts also struck down parts of section 1502 for violating companies' First Amendment rights.

The Trump administration's SEC has had enough of section 1502 failures, and is now reexamining the conflict mineral rule. The State Department is now conducting a review to see how responsible sourcing can be undertaken more effectively. The amendment I am offering today would suspend section 1502 while the administration completes its assessment.

Mr. Chairman, the facts I have laid out on section 1502 aren't partisan, and a suspension shouldn't be either. So let me close with the words of Barack Obama's Securities and Exchange Commission Chair, Mary Jo White, who, in 2013, said: ``Seeking to improve safety in mines for workers or to end horrible human rights atrocities in the DRC are compelling objectives, which, as a citizen, I wholeheartedly share. But as Chair of the Securities and Exchange Commission, I must question, as a policy matter, using the Federal securities laws and the SEC's powers of mandatory disclosure to accomplish these goals.''

It should tell us something when even Democrats' own Securities and Exchange Commission Chair warns that Dodd-Frank overreached on conflict minerals. A suspension would be something that Republicans and Democrats can agree on, and I urge my colleagues to support this amendment.

Mr. Chairman, I yield back the balance of my time.

BREAK IN TRANSCRIPT

Source