Financial Crime World

Due Diligence Efforts in the DRC: A Mixed Bag of Progress and Challenges

Background

In recent years, due diligence has become a cornerstone of global supply chain regulation, particularly in the mining sector. Since its emergence in mineral supply chains, practices have shifted from voluntary to mandatory, from conflict risks to broader human rights and labor risks, and from conflict-free sourcing to responsible sourcing and engagement.

The Democratic Republic of Congo (DRC) has been at the forefront of these efforts, with its reputation as one of the worst examples of mining-related conflicts, human rights violations, and labor exploitation. However, academic research has shown that the effects of due diligence initiatives in the DRC have been unclear at best, and adverse at worst.

Challenges

International discourses often seem disconnected from realities on the ground, with affected communities rarely consulted or able to actively participate in the design of due diligence programs. Assessments regarding what constitutes a supply chain “risk” are made at decision-making levels that they cannot access.

Initiatives Engaging with Affected Communities

Despite these challenges, some initiatives are now explicitly engaging with affected communities to address this power imbalance. The University of Antwerp’s research project, “Driving Change”, aims to meaningfully include small-scale miners, mining communities, cooperatives, and unions in ethical supply chain initiatives over the next three years through field research in South Kivu and Lualaba provinces.

International Efforts

The DRC has been a laboratory for due diligence initiatives, with various international organizations, governments, and companies implementing their own programs. The OECD’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas is widely recognized as a key framework for responsible sourcing.

However, its effectiveness on the ground has been criticized by some experts. Recent research has highlighted the importance of participatory approaches to due diligence, involving affected communities in the design and implementation of initiatives. A study by MSI Integrity found that multi-stakeholder initiatives often lack transparency and accountability, perpetuating power imbalances between corporate actors and local communities.

Concerns about SMEs

The push for human rights and environmental due diligence has also raised concerns about the impact on small- and medium-sized enterprises (SMEs). A recent report by Verbrugge et al. warned that SMEs may face significant burdens and costs under new regulations, potentially exacerbating existing social and economic challenges in the DRC.

Conclusion

As efforts to regulate resource extraction from war zones continue, it is essential to critically evaluate their effectiveness and potential unintended consequences. The debate surrounding due diligence initiatives in the DRC highlights the need for a more nuanced understanding of the complex relationships between international discourses, local realities, and global supply chains.

Sources:

  • Vogel, C., & Raeymaekers, T. (2016). Terr(it)or(ies) of Peace? The Congolese Mining Frontier and the Fight Against “Conflict Minerals”. Antipode, 48(4), 1102-1121.
  • Wakenge, C. I., Dijkzeul, D., & Vlassenroot, K. (2018). Regulating the old game of smuggling? Coltan mining trade and reforms in the Democratic Republic of the Congo. The Journal of Modern African Studies, 56(3), 497-522.
  • Scherer, A. G., & Palazzo, G. (2011). The new political role of business in a globalized world: A review of a new perspective on CSR and its implications for the firm, governance, and democracy. Journal of management studies, 48(4), 899-931.
  • Verbrugge, B., Pietrzak, D., & Dupont, V. (2022). The push for human rights and environmental due diligence: what is at stake for SMEs? Research Institute for Work and Society, HIVA, KU Leuven.

Further Reading:

  • Vogel, C. N. (2022). Conflict Minerals, Inc. War, Profit and White Saviourism in Eastern Congo.
  • Stoop, N., Verpoorten, M., & van der Windt, P. (2018). More legislation, more violence? The impact of Dodd-Frank in the DRC. PLoS ONE 13(8): e0201783.

Note: This article is a rewritten version of the original text and has been adapted to resemble a media article on the topic.