Report: Conflict Gold Reaching US Company Supply Chains

Gold mined from conflict areas in eastern Democratic Republic of Congo is reaching the supply chains of major US companies and finding its way into consumer products, according to an NGO report.

The report by The Sentry – an initiative of NGO Enough Project and human rights charity Not On Our Watch (NOOW) – says that the African Gold Refinery (AGR), located in Uganda, is sourcing illegally smuggled gold from eastern Congo and then exporting it to a Belgian affiliated refinery.

The gold, it says, may find its way into the supply chains of major western corporations, including "Amazon, Sony, General Electric, and 280 other US publicly traded companies".

All of these companies, it continues, listed the Belgian refinery as an entity that may be in their supply chains, according to 2018 SEC filings. This is despite it failing an international conflict minerals audit, the Responsible Minerals Initiative (RMI) – formerly the Conflict-Free Smelter Programme. It was subsequently removed from RMI's active refiner/smelter list in November last year.

Amazon and Sony did not respond to Chemical Watch's request for comment on the report's claims by the time of publishing. General Electric responded by highlighting its 2017 conflict minerals report, which sets out the due diligence the company carried out last year. However, it did not directly respond to the NGO report.

AGR has denied that it sources from conflict areas and says it is "committed to refraining from any action which contributes to the financing of conflict".

US requirements

In 2012, the US Securities and Exchange Commission (SEC) issued a final rule, which requires companies to determine if the gold, tin, tungsten and tantalum (3TG) they use came from the Democratic Republic of Congo (DRC) or an adjoining country.

If it is found to be the case, they are required to carry out a due diligence review of their supply chain to determine whether their 3TG transactions are funding armed groups in eastern DRC.

However, last year, then-Acting Chairman of the SEC Michael Piwowar suggested the agency would not seek enforcement for failure to submit 'enhanced disclosure' documents required by the law.

Many companies affected continued to file full reports for the 2016 reporting year, but others failed to as a "direct response" to Mr Piwowar's statements.

It led to a group of investors – under the Investor Alliance for Human Rights banner – pointing to more than a dozen company filings which explicitly mention the SEC's 2017 statements in indicating why they had chosen not to file the supplemental conflict minerals report.

The reporting rule has faced headwinds in the US since its enactment, including several efforts to defund it, amid concern from regulated parties over the burden it imposes. 

Critics say the rule has resulted in an unintended boycott of 3TG minerals sourced from the DRC region. But research suggests these fears are overblown.