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The use of “conflict minerals,” already a simmering issue at BSR 2009, shot up the agenda of the manufacturers attending this year’s meeting which are reliant on electronics.

Under a new U.S. Securities and Exchange Commission (SEC) rule, a key deadline to file information on corporations’ sources of these materials is approaching fast. And while industry is working with NGOs, governments and local miners to set up the necessary tracking rules, time may be too short to complete the work.

If not, supplies of these materials could be disrupted and the fragile war-torn economy of the African region where mining of these minerals is taking place could be grievously damaged, said Karen Hayes, director of corporate community engagement for the Africa region at Pact, a nonprofit trying to develop tracking processes for the material. Hayes participated in a panel at BSR 2010 entitled “Responsible Sourcing and Conflict Minerals.”

Corporations are already at work trying to meet the SEC standard, which requires companies to identify and publicize sources of key minerals. Formal reporting of this information is due in 2012, still more than a year away. But in April 2011 the new SEC standard calls for companies to produce a timeline describing plans to comply.

That’s just six months from now, very tight timing for large manufacturers who typically sign supply agreements years in advance. Corporations ranging from GE to Honda and Intel are already wrestling with vagaries of the new rule, and assessing the potential impact on their supply chains if supplies of these key minerals are disrupted. “Companies have an incredibly short timeline,” Hayes said.

The minerals in question are gold and the “three Ts” — tin, tungsten and tantalum — all widely used in electronics and mined in the war-torn Democratic Republic of the Congo (DRC). Embroiled in a decades-old civil war that has caused five million deaths and even more displaced persons, DRC is the largest producer of the three Ts, and a major gold producer. Army factions exploit countless small-scale mining operations — “taxing” material sales, as well as shipments — to fund war efforts

Alternative supplies of these minerals exist. There’s growing concern that by disrupting their export from the DRC, however, the SEC rules could have unintended tragic consequences by effectively embargoing all mineral exports from the region.

Hayes reported that “artisanal mining” jobs, while hard labor, were a critical source of income, as well as the DRC’s largest sector. Among the possible effects of ending formal exports: thousands of workers displaced, destabilization of the economy and formal government, in parallel with a strengthening of rebel forces.

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