VZCZCXRO3325
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #0949/01 2921112
ZNR UUUUU ZZH
R 191112Z OCT 09
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 0226
INFO RUCNSAD/SADC COLLECTIVE
RUEHXR/RWANDA COLLECTIVE
RUEAIIA/CIA WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS SECTION 01 OF 02 KINSHASA 000949 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EMIN ETRD PGOV PREL PHUM CG
SUBJECT:    TIN INDUSTRY SEEKS USG SUPPORT FOR 
            SUPPLY CHAIN INITIATIVE 
 
¶1.  (SBU) Summary:  The global tin association ITRI is actively 
working to seek support, both in the DRC and with international 
donors, for its Tin Supply Chain Initiative aimed at enhancing due 
diligence in the minerals trade in eastern DRC.  The initiative 
comes in response to continuing pressure by a number of 
international NGOs, as well as the UN Group of Expert's November 
2008 recommendations, later formally encouraged in UN Security 
Council Resolution 1857, that exporters and consumers of Congolese 
mineral products conduct due diligence on their suppliers. ITRI 
briefed econoffs on October 7 on the initiative and key challenges 
for its implementation.  While Phase I of the initiative, which 
addresses the final stage of the supply chain, has been launched, 
ITRI noted  several outstanding issues that need to be resolved 
before implementation of the second and third phases.  In 
particular, ITRI stressed the need for an independent body to 
certify mining sites as well as have oversight responsibility for 
the issuance of security seals and oversee the planned data center. 
ITRI is requesting USG endorsement of the Tin Supply Chain 
Initiative to help ensure GDRC buy-in, encourage other donor 
support, and diffuse NGO criticism.  End Summary. 
 
THE TIN SUPPLY CHAIN INITIATIVE 
-------------------------------- 
 
¶2.  (U) ITRI's Tin Supply Chain Initiative involves a three-phase 
system aimed at implementing a comprehensive due diligence and 
traceability program.  Phase I focuses on due diligence on the 
formalized end of the supply chain (including traders, known in 
French as "negociants," and export companies , known in French as 
"comptoirs") through documentary evidence including ensuring the 
legal status, legitimacy, and export authority of traders and 
comptoirs, as well as the issuance of Certificates of Origin by 
comptoirs.  ITRI members introduced Phase I of the system in July. 
Phase II focuses on the traceability and verification of the mineral 
supply from the mine site to the traders and comptoirs, utilizing a 
certificate of origin back to the mine site.  ITRI hopes to 
implement Phase II in 2010.  Phase III focuses on the entire supply 
chain with a comprehensive due diligence system covering 
traceability and business ethics, with verification provided through 
certification combined with supplier assessment through the supply 
chain.  Implementation of Phase III is anticipated by ITRI in 2010 
or 2011. 
 
¶3. (SBU) ITRI noted to Econoffs that Phase I puts much of the onus 
on the comptoirs regarding verification of the supply chain.  They 
stated, however, that they had received strong cooperation and 
support from the comptoirs since they understand that their 
continued business depends on the successful implementation of a due 
diligence system.  Likewise, the smelters (who are members of ITRI) 
noted their strong commitment to full implementation of the system. 
The tin industry has seen increased engagement from the negociants 
(traders), but even greater support and buy-in will be required as 
ITRI moves to implement Phase II. 
 
¶4.  (SBU) Comment:  The supply chain for the minerals trade from the 
point of purchase from comptoirs in Goma into international markets 
is well understood and largely formalized.  There is much less 
visibility in the supply chain, however, from both the mine (point 
of origin) to the point of sale and along the chain of custody.  The 
largely artisanal structure of much of the DRC's mining sector, 
Qlargely artisanal structure of much of the DRC's mining sector, 
combined with limited or non-existent infrastructure and continuing 
insecurity in some parts of the country create additional challenges 
to the effective monitoring and control of the minerals trade.  End 
Comment. 
 
CHALLENGES FOR PHASE II AND III IMPLEMENTATION 
--------------------------------------------- -- 
 
¶5.  (SBU) ITRI noted that implementation of Phase II will present 
greater challenges than that of Phase I since it will address the 
much less formalized aspect of the supply chain, from the mine to 
the "negociant."  According to ITRI, they have tried to address in 
Phase II the inherent difficulties of implementing a monitoring and 
verification system starting at the mine sites by creating a system 
that would allow tracking of all minerals through the subsequent 
supply chain.  Specifically, the system calls for a mine 
identification/paper tracking system (certificate of origin), 
accompanied by a unique code attached to each bag exiting a mine 
site in the form of a security tag or seal, to accompany the product 
at all stages of transport.  Key to the process will be the 
establishment of a data center to track the flow of the product, 
which will be made possile due to the unique reference numbers for 
each bag and security seals. 
 
¶6.  (SBU) ITRI highlighted several key challenges for the 
implementation of Phases II and III.  First, the system calls for 
the identification or certification of "clean" (e.g., conflict free) 
 
KINSHASA 00000949  002 OF 002 
 
 
mine sites.  ITRI stated that the industry was not in a position to 
make this determination, noting that both the criteria and mechanism 
used to certify sites remained outstanding questions. Rather, ITRI 
is seeking an international body, perhaps led by MONUC but also 
including industry, NGOs, the GDRC and industry, to play this role. 
In addition, ITRI would like an independent body to oversee the 
control and distribution of the control seals. Finally, ITRI is 
seeking an independent body to oversee the data center. 
 
¶7.  (SBU) COMMENT:  The GDRC (specifically, the Ministry of Mines) 
has indicated its support for ITRI's initiative.  A key aspect of 
current GDRC efforts to better control and monitor the minerals 
trade in eastern DRC includes the establishment of "buyers' centers" 
(centres de negoce, in French), which the GDRC believes will 
increase the control and traceability of minerals from the mines to 
export.  ITRI is working closely with the Ministry of Mines to 
ensure that their system both complies with the DRC's 2002 Mining 
Code and complements GDRC efforts.   At the same time, the 
implementation of the ITRI's Tin Supply Chain Initiative presents a 
number of key challenges that have yet to be resolved.  Key among 
these is what body will actually have responsibility for the 
independent verification of documentation and certification of 
sites.  This challenge has been highlighted in recent criticism of 
ITRI's initiative by NGOs, led by Global Witness.  ITRI is seeking 
USG endorsement for the supply chain initiative in part to help 
counter negative press from NGOs. 
 
 
¶8.  (SBU) Comment continued:  While these are serious issues that 
will need to be addressed before an effective due diligence and 
traceability can be fully implemented, it is hardly the only hurdle. 
 The very nature of the DRC's mining sector, characterized by 
artisanal miners and limited government control of mining sites, 
presents challenges for both the industry and government.  While a 
rigorous due diligence and traceability process is possible, it 
would require the presence of inspectors and monitoring staff at the 
mine site, along the transportation corridor and up to the point of 
sale, and a high degree of material and technical support to manage. 
 At the moment, the GDRC simply does not have the resources or 
capacity for such a presence.  Post believes that the Ministry of 
Mines and ITRI are both sincere in their efforts to improve the 
control, monitoring and traceability of the minerals trade in 
eastern DRC, though additional resources, political commitment and 
coordination will remain key to the successful of any initiatives. 
We would welcome the Department's views on ITRI's initiative.  End 
comment. 
 
BROCK