The European Parliament plenary voted on wednesday to agree important amendments to the draft EU law on minerals and metals from high risk or conflict areas which had been originally put forward by the Commission as voluntary recommendations that would have had limited effects.
The regulation remains on an arbitrary selection of ‘3TG’ minerals/metals (tin, tantalum, tungsten, gold) and with a global scope, but major changes included now mandatory obligations for due diligence and reporting by both upstream (mine to smelter) and downstream (smelter to product) companies in the EU in line with the OECD Due Diligence Guidance. A number of positive amendments were agreed, including exempting EU importers of metal containing products from additional EU audit if providing evidence that they source from ‘conflict-free’ audited smelters, although obliging EU smelters to apply the EU system of supply chain due diligence. The Parliament also agreed that existing industry schemes have a useful contribution to make and that these can be recognised as equivalent to the EU system in order to avoid double auditing or other unnecessary cost. In addition to the already expected public list of responsible smelters, there will now also be a list of responsible importers; those placing minerals or metals on the EU market for the first time, including their representatives. Users of recycled materials have reduced obligations but do need to report on how they determined their materials are indeed form secondary sources. In further positive changes, the Parliament added a 2 year transition period, a requirement for the Commission to put forward legislative proposals for measures to assist industry and Government in implementing due diligence, including in affected regions, and more frequent reporting on both the impacts of the regulation, and impacts of those accompanying measures. The European External Action Service will also be required to produce a handbook to guide companies on how to determine the location of high risk and conflict areas.
This surprise vote of 400 to 285, with 7 abstentions was led in large part by leftist parties, and moved not only well beyond the Commission proposal, but also the recommendations adopted by the Parliament’s International Trade Committee in recent weeks. The high level of controversy over the text (found here) means that there will seemingly be a very unusual procedure of discussion with the EU Council and Commission before the Parliament adopts their formal decision in first reading. This may help iron out a number of details of the text to bring them in line with the Parliaments general wishes as evident in the amendments. Following first reading agreement by the Parliament, the Council would also consider the text further before finalisation perhaps by the end of 2015.