Any of our business? Human Rights and the UK private sector - Human Rights Joint Committee Contents

Memorandum submitted by Amalgamated Metal Corporation Plc


  This evidence has been prepared by AMC and its subsidiary, Thailand Smelting & Refining Company (Thaisarco). Both AMC and Thaisarco have been named in sessions held by the Joint Committee as companies whose trade with the Democratic Republic of the Congo (DRC) should give rise to human rights concerns. AMC and Thaisarco absolutely refute that suggestion.

  These submissions cover two main issues:

    (a) the issue of Business and Human Rights; and

    (b) a human rights framework for trading with the Democratic Republic of Congo.

  The Committee has not asked AMC to respond to individual allegations but are interested in our views on the general issues raised by the inquiry. Nevertheless, in view of the specific criticisms of AMC made by Global Witness, the following facts are pertinent:

    (i) Contrary to Global Witness' evidence AMC was not "cited in UN Experts Panel report as funding warring factions in Eastern DRC".

    (ii) AMC was included in a 2002 UN report (S/2002/1146) but, importantly, Global Witness overlooked the fact that AMC was subsequently cleared by the UN panel (S/2003/1027).


  AMC is a broadly based metals, raw materials and intermediate products supplier to industry. It operates in a number of sectors ranging from dealing on the London Metal Exchange to the manufacture of construction products in Canada to tin smelting in Thailand. It operates in eleven different countries, is a significant contributor to the UK economy and is,a long established corporation with a reputation for reliability and probity.

  AMC operates in line wifh generally accepted business standards for multinational enterprises. Where it operates in developing countries (eg Thailand) it has a strong social policy—supporting education and development through scholarship schemes and donating to local communities in need.

  These submissions relate mainly to the need for business to be given clear guidance on whether trade with countries like the DRC is acceptable and, if so, what standards of due diligence need to be applied.

  Thaisarco has historically purchased cassiterite from the DRC for tin smelting. In September 2009 it suspended purchases from the DRC, although it will continue to honour existing contracts.


  Business can only take place if there is a clear legal framework, both in the UK and elsewhere, within which it can work. It is largely for Governments to set that framework. Internationally, Governments should take responsibility for ensuring that states have proper systems of human rights enforcement. Each Government should take responsibility for setting clear standards with which it expects businesses to comply. Business should clearly respect those standards and should face enforcement measures where there are transgressions.

  In the absence of a legal framework or clear standards, it is difficult for business to operate, particularly in countries such as the DRC, where state based human rights systems are at an early stage of evolution and where local responsibilities are sometimes opaque. The difficulties arise from the establishment of appropriate standards for a developing economy such as the DRC, for which the application of generally accepted developed economy standards of operation would lead to an effective embargo on external economic activity. Business needs to operate in a certain trading environment and it should be the task of Government to set appropriate minimum standards for developing countries, which may be different to those applied in a developed economy, to ensure that trade can continue. Furthermore, Government should clarify the extent of the responsibility of companies to ensure compliance at all points in the supply chain. These issues were recognised in the evidence of Lord Malloch-Brown to the Joint Committee. He said:

    "…who is responsible for enforcing human rights law? I just want to make the point that the FCO, which is engaged extensively internationally in terms of capacity building with states to make them implement human rights law better, is engaged with a whole range of actors on different corporate social responsibility issues. In the US we established the voluntary principles on security in human rights; with Professor Ruggie we have been doing a lot; we have the Kimberley Process on diamonds. But behind all of them lies the assumption that what you are trying to do is to strengthen a states-based system of human rights enforcement Obviously there are those voices which would argue that with corporates operating now multinationally across borders that somehow, either through pressure on those corporates directly or through the evolution of law, the right way of addressing this is to hold corporations directly responsible to the international community for human rights enforcement. That has not been our approach and I just wanted to lay that out straightaway because it is, as I say, in a sense the conceptual dividing line with which the human rights community has to struggle in dealing with these issues."

  Without a clear legal framework which includes appropriate standards, it is possible for lawful business in states such as the DRC to be mischaracterised and criticised, with significant effects on wider business relationships by bodies who may simply have a different opinion about whether business has "done enough" to force improvement in the supply chain. Without a clear legal framework responsible businesses will disengage and will seek alternative uses for their capital, with profound effects on local economies. This will have adverse effects on the quality of life and basic human rights of those left without functioning economies.

  By contrast, with clear legal frameworks, business can make a real contribution to local economies, with significant human rights benefits. This framework should set out the clearly the standards to which business should be expected to work, and the type of due diligence process that needs to be followed to achieve those standards.


  The minerals trade in DRC supports up to two million artisanal miners, and an even greater number of dependents. It is a major driver of economic activity in the country, and in the eastern region of the DRC in particular. There is a general consensus that continued trade with the DRC is beneficial.

  There is no embargo or ban on trading with DRC. The UN sanctions regime applies to those who through illicit trade in natural resources directly or indirectly fund illegal armed groups. So far as the minerals trade is concerned it is clear that the UN focus is on ensuring that illicit trade does not fund continuing conflict and the consequent human rights abuses. UN Member States are encouraged to take such measures as they deem appropriate to ensure that importers, processing industries and consumers of DRC mineral products under their jurisdiction exercise due diligence on their suppliers and on the origin of the minerals they purchase. Neither the UN nor any Member State has yet developed any guidance, standard or system for the exercise of due diligence.

  There is a climate of criticism of companies continuing to trade with the DRC on the basis that there is a risk that some natural resources might unknowingly have been sourced from areas or passed through areas in the control of both illegal armed groups (subject to the sanctions) and the DRC army (clearly outside the scope of the sanctions). The absence of a clear legal framework within which trade can take place, and which clearly identifies when trade cannot take place, allows this type of criticism to flourish.

  In order to fill the gap left by the lack of a clear legal framework, AMC is working with the tin industry body ITRI, and with the rest of the supply chain, to implement a due diligence system that could be used in the DRC. No due diligence process in the DRC will provide an absolute guarantee that an element of the funds generated have not been misdirected. Standards of due diligence must be set that reflect what can be achieved with the aim to improve these as local governance improves. This will then give businesses the confidence that, if they comply with the agreed due diligence standards, they will have taken all appropriate steps to limit human rights abuse.

  The ITRI Tin Supply Chain Initiative (iTSCi) provides a standard against which business activities can be measured, and provides a good level of traceability of minerals. Further due diligence procedures are being developed that will monitor the provenance of minerals more closely from the mine and in transit. It will take time for these measures to be implemented.

  At the moment the core responsibility in the iTSCi is on the exporter (the Comptoir) to certify provenance and to confirm that there has been no interference with the minerals in transit. If they do so then businesses should be able to rely on that certificate. Comptoirs are licensed in the DRC and there are DRC Government representatives in Comptoir offices to confirm the trade that is taking place. As multiple parties have pointed out, the Comptoirs have a good level of local knowledge and are capable of giving accurate and honest certificates.

  If there is any real evidence that a Comptoir has failed to exercise due diligence then they should be considered for designation under the sanctions regime. So far, despite concerns having been raised, no Comptoir has been designated. If there is insufficient evidence to designate Comptoirs then it is difficult to see circumstances in which businesses who purchase from them can properly be designated.

  The iTSCi is an industry led mechanism. As a consequence it cannot, by itself, give business the comfort that would be provided by a clear legal framework. If the iTSCi was endorsed and supported by the UK Government it could do so and would allow appropriate trade with DRC to continue and to grow. If continued trade is seen to be one way to reduce longer term human rights concerns in DRC, then Government should either endorse the iTSCi due diligence standards or develop an alternative workable set of standards.

  As noted above AMC has directed Thaisarco to suspend trading with the DRC, despite it being lawful, because of public criticisms causing damage to the Groups' good name. Although AMC continues to sponsor the iTSCi, the suspension of trade risks the withdrawal of one of the potential catalysts for positive change in DRC.

  Thaisarco will only lift its suspension if it receives satisfactory support for the ITSCI due diligence initiative or an appropriate alternative.


  AMC and its subsidiary Thaisarco are responsible organisations and employers and are concerned that human rights should be upheld throughout the supply chain. It is concerned to ensure that it meets UN requirements, and does not fund illegal armed groups by purchasing illicit minerals.

  AMC has been working with ITRI to implement a due diligence system. It has worked with the DRC Government, the UK Government, Non Governmental Organisations and the supply chain in general to develop a workable system. This builds on practices that AMC already had in place to prevent indirect funding of illegal armed groups.

  The continuing absence of an agreed due diligence process will drive the minerals trade underground, or into less discerning hands, with no improvement to human rights. AMC believes that the most responsible approach is for the UK and other Governments to engage with all members of the supply chain to develop due diligence standards, that will improve progressively over time. That will provide security for business trading in the DRC, and that business will bring improvements to the quality of life and human rights.

  It is the role of Government to set out a clear legal framework and to identify the appropriate due diligence standards. Without such clarity business cannot do business, and cannot help economies to recover in a way that is able to protect human rights.

previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2009
Prepared 16 December 2009