By Mvemba Dizolele (Peter J. Duignan Distinguished Visiting Fellow, Stanford University’s Hoover Institution)/huffingtonpost.com.
Why Dodd-Frank hammers on the symptoms of a crisis, but shies away from the real fight for good governance, justice and rule of law.
On Aug 7, freelance journalist and blogger David Aronson published an important opinion piece in the New York Times on the effects and ramifications of the Dodd-Frank Act. I congratulate and commend him for a clear and lucid position. The op-ed has unleashed a healthy, robust, and at times acrimonious debate online about the meaning of this legislation. Blogs are beaming with commentary and the Enough Project has been on the defensive with a response in the Huffington Post by Sasha Lezhnev. David deserves all the credit for this discussion.
Like the activists who lobbied for the legislation, Dodd-Frank assumes that minerals such as gold, wolframite, coltan and tin, which are extracted from areas under the control of armed groups, drive the conflict, and therefore, curbing the trade would bring peace to the region. Organizations like Global Witness, the Enough Project and its partners, that have invested considerable resources into this issue, contributed to this oversimplified reasoning. Proceeds from mineral trade provide the militias the financial means to acquire more firepower, they argue, which in turn perpetrates the conflict.
The historical truth, however, is different. Activists have reversed the cause-to-effect sequence of developments. In the Kivus, the local economy rested on agriculture and commodity trading, which suffered severe setbacks at the onset of the war in the late 90′s as the conflict ushered a rapid destruction of farms, fields and road infrastructure. The ensuing proliferation of militias, which exacted (and still do) a heavy toll on the peasants and commodity traders, drove the populations off the fields into the emerging artisanal mining.
In eastern Congo, from Butembo in North Kivu to Nzibira in the hills of South Kivu, thousands of families now live off this informal mineral trade, which generates between $300 million and $1.4 billion a year. The long supply chain ensures that people who would otherwise be unemployed and starve have a minimal income. These people, however, are likely to pay a high price for the legislation and lose their livelihood. Back in September 2010, they experienced the effects of a mining moratorium for the first time. In an attempt to preempt the US legislation and its proponents, Congolese President Joseph Kabila suspended artisanal mining operations in the region. Expectedly, the outcome was devastating for the population, as the thousands of Congolese who depend on this trade could not find work in a country with 8.9 percent and 81.7 percent unemployment and underemployment rates, respectively. Army units deployed to protect the mining areas turned their assignment into a business opportunity and joined the black market trade. Six months later, unable to enforce his decision, Kabila lifted the ban.
Currently, it is nearly impossible to separate clean ore from bloody minerals imported from the region. While the concerned industries figure out a credible certification process, anticipated compliance with the legislation increases transaction cost in one of the world’s most corrupt countries. In order to protect their reputation, the electronics and high technology industries contemplate boycotting minerals from the region. The decision by US companies to either scale back or stop sourcing ore from eastern Congo means that the people of the Kivus are likely to experience the same devastating blow that hurt the local economy when President Kabila imposed the mining moratorium in September 2010.
The government’s inability to assert state authority is the real cause of the insecurity that set off the emergence of militias and sustains the plunder of natural resources. With the collapse of the state, old, latent community grievances stemming from land disputes, demographic pressures, ethnic tensions, and control of resources and trading routes turned eastern Congo into a tinderbox. Ambitious demagogues only need to embrace a cause and find a sponsor — a community, business or political elite or a state — to start a militia. The three main militias, FDLR, CNDP and PARECO, have exploited these dormant grievances and benefited from either community or state support. The pattern remains the same for the three dozen smaller militias that operate in the area.
Mineral exploitation, the object of activism and legislation, is but one source of revenue for these armed groups. They literally rule over the territories they control, taxing every economic activity and terrorizing the civilians into submission. Losing access to the mines will marginally affect their capacity to generate funds, considering that weapons and ammunition are relatively inexpensive. In other words, if there were no minerals, the conflict would still rage on as armed groups would find other sources of revenue. As long as the government is incapable to impose its authority and address the various grievances, the region will not know peace.
The government has failed to build a professional army, perhaps the single most important element in ensuring Congo’s territorial integrity and the security of its citizens and coveted natural resources. President Kabila continues to deal with militias in the east in the same way that he did during the transition period — co-opting warlords into the government and security institutions. Even as militia leaders get promoted into the Congolese army, they remain rooted geographically in their area of influence and continue to perpetrate horrific abuses on civilians with impunity. In short, the national army is little more than a patchwork of militias with parallel command structures and no incentive to change.
The predatory designs of neighboring Rwanda and Uganda also fuel the volatile situation. Both Rwanda and Uganda have invaded Congo twice, with continued incursions into eastern Congo where they still support militias. Several UN reports have linked both countries to Congolese militias and the looting of resources. Furthermore, Uganda, Rwanda, Burundi and Tanzania benefit from the illicit mineral trade in eastern Congo as they serve as primary export routes. And while Uganda, Rwanda and Burundi have no gold, diamond or tantalum deposits of significance, they have become important exporters of these minerals. In the past, high level government officials and senior army officers were implicated in this trade. Whether this is still the case today is unclear. It seems, nevertheless, highly unlikely that these countries could export such large amounts of minerals without the collusion of government officials. Whether these leaders are actively sourcing these goods or simply turning a blind eye to the trade matters little to the bottom line: the result is still the same.
While the SEC is working out the details of the regulations, Rwanda actively capitalizes on the failure of the Congolese State. On May 13, 2011, Bloomberg reported that Rajesh Exports Ltd., India’s largest jewelry manufacturer might invest as much as $1 billion over the next five years to develop Rwanda’s gold industry, including a refinery, and a diamond-trading business. With limited gold deposits, and no proven diamond reserves, Rwanda is likely predicating its agreement with Rajesh on DRC’s resources. In the absence of a strong Congolese state to protect its interests, Dodd-Frank will effectively certify the looting of Congo’s minerals.
Oversimplification of issues often produces inadequate, counterproductive policies. Dodd-Frank and its proponents who seek to curb US companies penalize the people of eastern Congo, but do little to curtail the militias and their backers. We know the primary supporters of militias, whether in DRC, in neighboring countries or overseas. We also know the primary export routes and which neighbors profit from this trade. It is troubling that the legislation uses a shotgun approach to the illicit mineral trade quandary and inculpates all of DRC’s ten neighbors. For instance, the legislation treats Zambia, a mineral-rich country that is not involved with militias in eastern Congo, but borders DRC to the south, with the same suspicion as Rwanda, Uganda, Burundi and Tanzania, which are the primary export routes.
The proponents of Dodd-Frank present the issue in such a way that one may think that eastern Congo is a sovereign, independent country. The legislation fails to place the problems of the Kivus in the context of a national crisis that requires robust engagement at the national level. The Enough Project has been eager to display a letter of endorsement signed by 35 Kivu-based civil society groups. That is hardly a buy-in by the Congolese at the national level.
Unless Dodd-Frank is about US consumers and companies, the activists and their partners in Congress should confront the real causes of the conflict, which are failed leadership and corruption in Kinshasa, and predatory policies of Rwanda and Uganda who destabilize eastern Congo while benefiting from the trade. Cleaning up eastern Congo requires the courage to denounce, and pressure all guilty parties through a variety of means, including International Criminal Court indictments, freezing the assets of militia leaders and their backers, and diplomatic pressure on the governments of DRC, Uganda, Rwanda, Burundi and Tanzania.
Real change will only happen when a combination of bold measures is part of a comprehensive policy that addresses the crisis’ multifaceted nature as was done with blood diamonds for Sierra Leone and Liberia. These measures included UK-sponsored military intervention and state-building initiatives, the restoration of state authority, the dismantlement of militias, the Kimberly process and the pursuit of justice, which eventually led to the arrest of Liberia’s former President Charles Taylor. Pretending otherwise in DRC would be disingenuous.
Incidentally, the declared mission of the Enough Project is to end genocide and crimes against humanity. No genocide has been declared in DRC, but over the years human rights organizations have produced several credible reports of mass killings and crimes against humanity perpetrated by different actors in Congo. The most detailed of these reports, the UN Mapping Report, was published in October 2010 by the High Commission for Human Rights. Analysts may disagree on the exact number of the victims of the conflict in DRC, but most of them agree that hundreds of thousands of Congolese have died as a consequence of conflict. So far, however, the Enough Project’s response to these reports has been tepid at best.
Dodd-Frank hammers on the symptoms of a crisis, but shies away from the real fight for good governance, justice and rule of law.