Rebuttal to Intel Statement to Oregon Public Broadcasting by Ann Shannon

Yesterday, Lisa Shannon, Founder of Run for Congo Women and author of A Thousand Sisters, took me (her mother), her niece Aria and 24 friends and supporters to Intel's Ronler Acres campus in Hillsboro, Oregon, to demand that the company stop all secret, back-door lobbying efforts to gut accountability measures from HR 4128, the Conflict Minerals Trade Act, and to immediately and unconditionally endorse HR 4128 AS WRITTEN.

We took 45,000 pennies with us.  While in DC last week to appear on a panel with Senators Brownback (R-Kan) and Wyden (D-OR), Lisa had learned that experts had estimated that passage and implementation of the bill would cost industry producers less than 1 cent per product.   With 45,000 lives being lost in DR Congo due the conflict minerals trade, we were offering to pay the 1cent per product/per life that the company would lose the first month.  We were urging Intel and other tech companies to simply pass along that cost to their consumers, confident that no American consumer would hesitate to pay an extra penny to ensure that their laptop is not being powered by Congolese blood and suffering.

Oregon Public Broadcasting's Krstian Foden-Vencil, and Willamette Week's Jacob Reingold covered the event.  (See: http://news.opb.org/article/7347-activists-protest-intels-use-conflict-minerals/  and http://blogs.wweek.com/news/2010/05/17/picketers-hit-intel-over-mineral-imports/)

Intel issued a statement to Foden-Vencil in response to his inquiries, which he quoted in his blog.  Below is my rebuttal to the Intel statement issued to Oregon Public Broadcasting.

My Response/Rebuttal to the Intel Statement issued to Oregon Public Broadcasting:

My response:

The core issue is that exploited minerals essential to all electronics products are fueling the conflict in DR Congo. Militias regularly use terror to clear away local populations in order to gain and maintain control of mining territory. It’s a simple formula: behead 29 people one day, burn 47 people alive 3 days later and, by all means, mutilate and rape every woman you come across to scare locals away from their land, and you will be free to mine away, to your heart’s content.

With an estimated new 45,000 deaths every month and hundreds of thousands of women having been brutally gang raped, addressing conflict minerals is a key element in stopping the carnage. There is no disagreement from anyone on this.

Please note that Intel did not issue a denial that, as Lisa Shannon asserts to have learned several from DC insiders, Intel has been taking a leading role in the back-door, secret lobbying efforts to amend the Conflict Minerals Trade Act through the industry lobby group..

What Intel did issue was a statement to Foden-Vencil that, “…it is concerned about conflict minerals…” and that “it wants to make sure legislation will achieve real change — not just result in an unintended ban on legitimate trade.”

While publicly professing to support the Conflict Minerals Trade Act, Intel betrays its true position by saying the proposed legislation will “just result in an unintended ban on legitimate trade.” Given that, the reports that Shannon has received from DC insiders naming Intel as one of two primary leaders (along with Hewlett-Packard) acting through the industry group to drastically reduce the bill’s enforceability measures are not surprising.

But exactly how motivated is Intel in ensuring that the legislation achieves the “real change” that it is publicly avowing to save its public face? Just how honestly is Intel representing itself here?

The most direct way to determine that is to compare HR 4128 as written with the changes sought by the industry group, as specified in the industry group document  recently leaked to Lisa, and which she is making available to the press.

SEC 8 (b) of the bill as written reads: “Matters To Be Included- Each report required under subsection (a) shall, with respect to each importer identified under subsection (a) include the following information irrespective of whether any party to the importation has requested confidentiality: the carrier code, vessel country code, vessel name, voyage number, district/port of unlading, estimated arrival date, bill of lading number, foreign port of lading, manifest quantity, manifest units, weight, weight unit, shipper name, shipper address, consignee name, consignee address, notify party name, notify party address, piece count, description of goods, brand, manufacturing company, container number, and seal number.”

That wording would appear (to this old, unsophisticated Gramma), to allow for collection of extensive data on the parties involved in the delivery and sale of conflict mineral laden products, and with a great deal of specificity.

The alternate Section 8(b) proposed by the industry, however, reads: “Matters To Be Included- Each report required under subsection (a) shall, with respect to each product that contains conflict minerals, shall [sic] included [sic] the following information irrespective of whether any party has requested confidentiality [sic] description of goods including, brand, and manufacturing company or importation company.”

Why would an industry, which is only seeking to “achieve real change” on conflict minerals, aim to eliminate all meaningful identifying information of those participating in the conflict minerals trade delivery system and of the specific products that contain them? My best guess, but again, I am just a Gramma:  In so rewording the bill, they obliterate information vital to monitoring and further addressing the flow of conflict minerals, their derivatives and the products that contain them both to regulators, and the public (peace and anti-genocide advocacy groups, or any consumers desirous of avoiding the purchase of conflict mineral products).

Moving on, SEC 9 (a) on Penalties, HR 4128 as written reads: “(a) Penalties relating to Conflict Minerals. If any person, by fraud, gross negligence, or negligence, enters, introduces, or attempts to enter or introduce any good that contains one of more conflict minerals (as such term is defined in Section 11) into the territory of the United States by means of inaccurate information with respect to the imported good, such person shall be subject to penalties pursuant to section 592 of the Tariff Act of 1930 (19 U.S.C. 1592).”

The industry group, however, proposes to strike out: “by fraud, gross negligence, or negligence, enters, introduces, or attempts to enter or introduce and [sic] good that contains one of more conflict miners (such as term is defined in section 11) into the territory of the United States by means of inaccurate information with respect to the imported good”.

It proposes instead the far more generic (and I would be willing to bet, far more difficult to enforce in meeting the legal standard of “knowingly”): “…If any person knowingly provides a false declaration or fails to declare to the Secretary of Commerce, such person shall be subject to penalties pursuant to [insert applicable citation].”

Nothing, however, belies the industry group’s true intentions to obstruct enforceable conflict minerals legislation or the seriousness of its commitment to “achieve real change” than its own statement preceding the suggested changes in the leaked document: “Providing a transaction-by-transaction certification on the importer’s customs declaration would be significantly burdensome…” and that the “system of penalties must include a reasonable care defense…” Because ”no importer can be a guarantor that conflict minerals have not entered the supply chain despite it’s [sic] exercise of reasonable due diligence to exclude them.”

In other words, the whole intent and purpose of this legislation, to ensure accountability all along the supply chain of conflict minerals, is prima facie unattainable and unenforceable to the companies who are deriving profit, however indirectly, from conflict minerals. We are all simply wasting our time.  (Should we just let the bodies continue to pile up in DR Congo and learn to grieve?)

Nailing the coffin on enforceability and industry accountability, the industry group proposes adding the following paragraph SEC. 9 (c) to the bill:

“(c) Reasonable Care Defense – The Secretary of Commerce, in setting penalties under subsection (a), and the Commissioner of Customs and Border Protection, in assessing penalties under section 1952 of the Tariff Act of 1930, shall provide for an affirmative defense to any such penalty if an importer has exercised reasonable care in making its declaration in accordance with Sec 7(a)(1) or in declaring goods to be non-conflict minerals upon import in accordance with section 7(b). An importer shall be deemed to have exercised reasonable care if it:
         (A) Contractually obligated its direct suppliers to exclude conflict minerals from goods supplied to the import; or
         (B) Obtained a certification from its direct suppliers verifying that goods supplied to the importer do not contain conflict minerals;
                and
         (C) Investigates credible information that a direct supplier may be in breach of its obligations and takes appropriate corrective action if the direct supplier is in breach. Evidence that conflict minerals may have entered a supply chain despite the exercise of due diligence in accordance with an importer’s declaration shall not disqualify the importer from the affirmative defense of reasonable care.”

In other words, if we tell our suppliers they can't do it, and they tell us they didn’t do it, AND no one comes forward to tell us otherwise, we can look the other way, they can do whatever they want, submit as many falsified documents as they wish, and our hands are clean by the standards of this legislation. Only IF someone comes to us to complain there has been a breach, are we obligated to look and see what is actually going on! We are in no way obligated to be proactive in assuring that our suppliers are complying with their contractual obligations.

All of this has been proposed, while in SEC 2. FINDINGS, of the bill as written, unequivocally state at paragraph (13):  “There are ample sources of columbite-tantalite (coltan), cassiterite, and wolframite in non-conflict areas of the Congo and worldwide, processing columbite-tantalite, cassiterite, and wolframite for commercial use requires sophisticated technology, there are a limited number of processing facilities worldwide for columbite-tantalite, cassiterite, wolframite, and their derivatives, and determining the sources of columbite-tantalite, cassiterite, wolframite, and their derivatives used by processing facilities has already been successfully done at low cost.”

Wow… with the tech industry going to those heroic measures to stop those 45,000 lives being lost every a month and ending the worst sexual violence on the planet (all to save a penny in product costs), maybe we should find someone to nominate Intel and its industry group for the Nobel Peace prize.