Businesses play a crucial role in protecting human rights and ending forced labor by identifying, preventing and eradicating slavery from their supply chains. The more transparency in the business supply-chain, the less opportunity for laborers to be exploited and abused.
On October 24 we moved one step closer to the goal of world-wide business supply-chain transparency when China launched new government regulations for its mining companies operating overseas. This is a game-changer for people who live in resource-rich, but economically-poor nations.
China’s economy has a huge appetite for energy and minerals. China’s foreign direct investment in natural resources is spilt between Latin America and Africa. The Chinese government struggles to regulate the behavior of its companies abroad. Violations of international labor and environmental standards by Chinese companies, particularly in the mining section, have been uncovered in the Democratic Republic of the Congo, Angola and Zambia. Corruption and bribery by Chinese mining companies have been documented throughout Latin America.
In December 2013, Chinese copper mining operations in Zambia were halted by the government for failing to comply with environmental and labor regulations. And in March 2014, a Chinese open-pit copper mine in Toromocho, Peru, was shut down after the country’s environmental regulator found that it was contaminating two lakes. Peru is the world’s third biggest copper producer.
The new Chinese guidelines encourage mining companies to publish their receipts of payment to governments—this includes taxes, royalties, and license fees— from every project they operate as well as documentation of fair operating practices.
The Chinese government also requires mining companies to implement the standards of the Extractive Industries Transparency Initiative (EITI) in order to prevent corruption as well as provide guidelines for which types of payments and at what levels those payments should be reported under these standards.
This will allow communities who live near active project sites to have knowledge of how the money is being handled and where the government is putting those funds to use. This in turn will put the power of accountability in the hands of the people and provide local communities the opportunity to ensure that the money going into their government is coming out in the form of services that provide for its citizens.
Columban Fathers and lay missionaries have witnessed the effects of forced labor in the communities where they live and serve. In Peru, Columban Father Peter Hughes has served as the executive secretary of the Department of Justice and Solidarity of the Latin American Bishops’ Conference (CELAM) to bring Catholic teaching into the sphere of extractive industries. In the Philippines, Columbans have served as founding members of the Working Group on Mining, to help indigenous groups organize themselves when voting on approval of mining projects.
The new guidelines will not only set precedence for China, but could also have a positive impact on the U.S. as well. While the U.S. has made efforts towards transparency and accountability with the Dodd-Frank Act (Section 1504), the bill has been delayed on account of a legal challenge by the American Petroleum Institute (API), an oil lobby group. The API claims that the rules of Section 1504 will put the United States at a comparable disadvantage against their Chinese rival. Yet with China’s biggest companies already functioning under the standards of EITI, the API’s argument is proving weak in comparison.
If the standards set in the Dodd-Frank Act are not implemented, the U.S. risks being stigmatized with a reputation of secrecy around oil and mining practices that leads to conflict, corruption, and human abuses. The Columbans applaud China’s efforts and advocate for U.S. regulators to embrace this new age of transparency.