The Unexpected Ramifications of the Dodd-Frank Act

By Carolyn Prioleau

“Wide as the gulf often is between a country’s economic potential and its citizens’ prosperity, it is rarely as gaping as in the Democratic Republic of Congo. Many thousands of Congolese die every year as a result of political violence, disease, and poverty, yet the ground below them is brimming with enough minerals to fill the world’s smelters and metal stores—if only they could be extracted and sold in a legitimate market”.[1]

In November of 1996, the First Congo War broke out in what was then known as the country of Zaire.  Ethnic tension spillover from the 1994 genocide in Rwanda resulted in the destabilization of an already failing state, while the Mobutu government’s inability to control the eastern provinces prompted action by other African countries. In August of 1998, due to the new government’s inability to enact change, the Second Congo War broke out. Despite an official agreement to end hostilities in 2003, the conflict continues to this day.  By 2008, as many as 5.4 million people had been killed, making the Second Congo War the deadliest war since World War II.[2] Now, what seems like the Congo’s only saving grace is also what is causing it such instability: its mineral trade.

The Democratic Republic of the Congo’s tumultuous present stems from its abusive and bloody past.  After the Conference of Berlin in 1885, King Leopold II of Belgium formally acquired the Congo as his personal territory. Under the reign of the king, the Belgians exploited the local Congolese population to extract rubber. In 1908 the Congo became the Belgian Congo, under the direct rule of the Belgian government. Brutal practices such as amputations remained common, continuing until the Congo received its independence in 1960. Immediately following independence, secessionist movements broke out, refusing to cool until military strongman Mobutu Sésé Seko, supported financially by the United States for his anti-Communist beliefs, took over.  Mobutu would rule the Congo, or Zaire, is it became in 1971 until the First Congolese War replaced him.

In 1994, the Rwandan genocide began. Upon the victory of the Tutsi Rwandan Patriotic Front (RPF), Hutu militants fled Rwanda for eastern Zaire, seeking refuge. Roughly 1.5 million Rwandan refugees settled in eastern Zaire, including both Tutsi who fled Hutu oppression during the period of genocide and Hutus who fled after their government was overthrown.  The transferring of the Rwandan tension into Zaire eventually lead to the First Congo War, as Tutsi Banyamulenge, supported by both the Tutsi RPF government in Rwanda and the Ugandan army, began attacking Hutu militias. Thanks to general dislike for Mobutu and his government in Kinshasa, the Banyamulenge Rebellion soon spread to non-Tutsi groups, who joined forces as the Alliance of Democratic Forces for the Liberations of Congo (AFDL) under the leadership of Laurent-Desire Kabila. Laurent-Desire Kabila replaced President Mobutu Sésé Seko in May 1997, ending the First Congo War.

The Second Congo War began for many of the same reasons as the First Congo War. As a result, it is often assumed that the two wars are one in the same.  First, President Kabila’s regime mirrored that of Mobutu in ineffectiveness, and according to some actually exceeded it in corruption.  Second, ethnic tension remained high in the eastern Kiva regions of the DR Congo, as the area remained largely uncontrolled by the government. In August of 1998, the Congolese army rebelled against the Kabila government.

The Second Congo War is also known as both the Coltan War and, due to the involvement of eight Africa nations and 25 armed groups, Africa’s World War. On August 1998 the Banyamulenge, responsible for initiating the First Congo War, began rebelling against the government. Again, as in the First Congo War, Rwanda and Uganda backed this militia, which came to call itself the Rally for Congolese Democracy (RCD). Dominating the eastern part of the country, the RCD based its operating in Goma and began to take over other cities in the Kivu region. In an attempt to save his country from foreign occupiers and from disaster, President Kabila began employing Hutu militants in the eastern Congo. Anti-Tutsi and anti-foreigner sentiment spread throughout the government and eastern Hutu regions, mirroring what had occurred during and prior to the Rwandan genocide. The Tutsis became viewed as Rwandan Tutsis, representatives of the outside, occupying forces rather than citizens. Such anti-Tutsi sentiment, of course, further fueled Rwanda and the RCD, which justified their violence by claiming that another Tutsi genocide was about to occur in the Kivu region. Uganda, again on the side of Rwanda and the Tutsis, created and supported the Movement for the Liberation of Congo (MLC). Later, Namibia, Zimbabwe, Angola, Chad, Libya, and Sudan all joined the fight on the side of the Kabila government. Violence and bloodshed lasted until 2003, when all warring parties signed the Global and All-Inclusive Agreement, prompting withdrawal for foreign forces. Despite the signing of the peace accord, three areas especially remain in conflict: the north and south Kivu regions, pitting Tutsi against Hutu; Ituri, locked in an ethnic struggle between local Lendu and Hema tribes; and northern Katanga, where the local Mai-Mai population continues to rebel against the government.

Currently, President Joseph Kabila, son of Laurent-Desire, “wants to turn Congo into an economic powerhouse on the back of vast industrial mining.”[3] Despite his good intentions, “his ability to effect change is limited. The national army is little ore than a collection of militias and obeys no central command. The Congolese state exists only on paper.”[4] Despite progress in the southern Katanga province, “North and South Kivu, studded with gold and other valuable metals, are in turmoil”.[5]  Successful implementation of Kabila’s vision, and the hope for economic development in the DR Congo, lie in  “winning over foreign investors and governments, as Congo lacks the skills and capital to develop alone”.[6]

The irony of the situation stems from the ramifications of the 2010 Dodd-Frank Act.  In an effort to curtail the illegal mineral trade and the use of its profits to finance war, Congress included a special provision in the Dodd-Frank Act that “forces companies listed in America to disclose the exact source of metals procured from Congo.”[7]  While the intention and purpose behind the provision was good, the unexpected ramifications have contributed to undermining the situation of the Congo.  While “the law tries to shame big buyers, such as Apple and Motorola, who use Congolese coltan, into dealing only with bona fide suppliers. But the effect has been to frighten them away from Congo altogether.”[8]  Goma, North Kivu’s capital, is a microcosm of this effect: ““metals dealerships dominated the city’s economy until last year but are mostly padlocked now. Repair shops and bars that relied on mining business are empty. So are most public offices. Local government, financed by mining taxes, is insolvent; salaries have not been paid in full for months.”.[9]  Moreover, “in the past year Goma has suffered a miserable decline. Hundreds of mines in the surrounding countryside have cut output by as much as 95% […] Most stopped coming because they could no longer find buyers for their nuggets of coltan, a metal used in electronic gadgets. They blame what they call ‘The American law.’”

There is no doubt that the previous Congolese situation needed to be changed. Congolese militias and army units used mining and extortion to finance mass killings and campaigns of rape against civilians.  There is also no doubt of the importance of the mining industry to Congo’s economy.  Without being able to capitalize upon the rich resources it possesses, DR Congo has little hope for development and peace. Thus, the question remains of what the world should do now. How does one distinguish between legitimate and illegitimate miners? Whatever the answer may be, it needs to be discovered fast. If the DR Congo wants any chance at a future, Apple and Motorola need to start buying minerals again.


[1] “Digging for Victory”, The Economist, 24 Sept. 2011, 1.

[2] Joe Baviar, “Congo war-driven crisis kills 45,000 a month: study”, Reuters, 22 Jan 2008 <http://www.reuters.com/article/2008/01/22/us-congo-democratic-death-idUSL2280201220080122&gt;.

[3] “Digging for Victory”, The Economist, 24 Sept. 2011, 1.

[4] “Digging for Victory”, The Economist, 24 Sept. 2011, 1.

[5] “Digging for Victory”, The Economist, 24 Sept. 2011, 1.

[6] “Digging for Victory”, The Economist, 24 Sept. 2011, 1.

[7] “Digging for Victory”, The Economist, 24 Sept. 2011, 1.

[8] “Digging for Victory”, The Economist, 24 Sept. 2011, 1.

[9] “Digging for Victory”, The Economist, 24 Sept. 2011, 1.

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