Study: U.S. Conflict Minerals Regulation Worsened Situation In Congo
When the U.S. Securities and Exchange Commission (SEC) issued and implemented its conflict minerals regulation, MSCI and its allies argued it would increase costs for U.S. businesses without doing anything to achieve its stated goal: to reduce violence in the Democratic Republic of the Congo (DRC). A new report by University of Wisconsin Assistant Professor Dominic Parker and Bryan Vadheim of the London School of Economics confirms that our arguments were right.
According to Parker and Vadheim while “the long term effects [of the regulation] remain to be seen … the short term effects appear to have been devastating for some Congolese civilians. Instead of reducing violence, our findings suggest the policies have increased the likelihood and the number of episodes in which armed groups in the eastern DRC looted civilians and committed violence against them.” Specifically, the two scholars found incidents of looting likely increased 291 percent while violence against civilians increased 143 percent.