How Congress devastated Congo

The Loi Obama or Obama Law as the Dodd-Frank Wall Street reform act of 2010 has become known in the regionincludes an obscure provision that requires public companies to indicate what measures they are taking to ensure that minerals in their supply chain dont benefit warlords in conflict-ravaged Congo. The provision came about in no small part because of advocacy groups like the Enough Project and Global Witness,which have been working to end what they call conflict minerals.

Unfortunately,the Dodd-Frank law has had unintended and devastating consequences,as I saw firsthand on a trip to eastern Congo this summers. The law has brought about a de facto embargo on the minerals mined in the region,including tin,tungsten and the tantalum that is essential for making cellphones.

The smelting companies that used to buy from eastern Congo have stopped. No one wants to be tarred with financing African warlordsespecially the glamorous high-tech firms like Apple and Intel that are often the ultimate buyers of these minerals.

For locals,the law has been a catastrophe. In South Kivu Province,I heard from scores of miners and small-scale purchasers,who used to make a few dollars a day digging ore. Paltry as it may seem,this income was a lifeline for people in a region that was devastated by 32 years of misrule under the kleptocracy of Mobutu Sese Seko (when the country was known as Zaire) and that is now just beginning to emerge from over a decade of brutal war and internal strife.

The pastor at one church told me that women were giving birth at home because they couldnt afford the $20 or so for the maternity clinic. Children are dropping out of school because parents cant pay the fees. Remote mining towns are virtually cut off from the outside world because the planes no longer land. Villagers who relied on their mining income to buy food when harvests failed are beginning to go hungry.

Meanwhile,the law is benefiting some of the very people it was meant to single out. The chief beneficiary is Gen. Bosco Ntaganda,nicknamed The Terminator and sought by the International Criminal Court. Ostensibly a member of the Congolese Army,he is in fact a freelance killer with his own ethnic Tutsi militia,which provides security to traders smuggling minerals across the border to neighboring Rwanda.

All this might be a price worth paying if the law were having its intended effect of economically asphyxiating the warlords who turned eastern Congo into the deadliest conflict zone since World War II. But by the time President Obama signed the law last summer,the conflict had moved into a different phase. Most of the militias that wreaked havoc between 2003 and 2008 have since been incorporated into the Congolese Army. The two or three of any significance that remain get their money from kidnapping and extortion,not from controlling mining sites or transport routes. The law has not stopped their depredations.

The people of eastern Congo agree that it would be beneficial to bring greater clarity and transparency to the mineral trade. A variety of local and international initiatives to do so were under way when the embargo hit. Those efforts may now become a casualty of the Dodd-Frank law. The Chinese have recently opened a trading post in North Kivu; they make cellphones as well,and dont feel the need to participate in transparency schemes the way Western companies do.

In eastern Congo,everyone was unanimous in condemning Dodd-Frank. The Rev. Didier de Failly,a Belgian priest who has lived in Congo for 45 years,warned Western advocacy groups of the dangers posed by their campaign. But once the advocacy groups succeeded in framing the debate as a contest between themselves and greedy corporate interests,no one bothered to solicit the opinion of local Congolese. As the leader of a civil-society group,Eric Kajemba,asked me,more in confusion than in anger,If the advocacy groups arent speaking for the people of eastern Congo,whom are they speaking for?