Bill Huizenga

Mr. HUIZENGA

Mr. HUIZENGA. Mr. Speaker, I yield such time as he may consume to the gentleman from Pennsylvania (Mr. Rothfus), vice chairman of the Financial Institutions Subcommittee of Financial Services.

Mr. HUIZENGA

Mr. HUIZENGA. Mr. Speaker, I yield 5 minutes to the gentleman from Arizona (Mr. Schweikert), the sponsor of this legislation.

Mr. HUIZENGA. Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Davidson), a member of the Financial Services Committee.

Mr. HUIZENGA. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1585) to amend the Securities Act of 1933 to codify certain qualifications of individuals as accredited investors for purposes of the securities laws, as amended.

Mr. HUIZENGA. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous materials on this bill.

Mr. HUIZENGA. Mr. Speaker, very quickly, just to recap, 60 percent of all job growth over the past two decades has come from small and emerging companies. This bill today recognizes that and encourages more of that to happen. It allows knowledgeable but maybe not wealthy folks to invest in areas of their expertise. In an era of crowdfunding and fund-me pages and those types of capital raises and investing, this bill makes sense. As the gentleman from Ohio, my friend Mr. Davidson, pointed out, it came through the committee unanimously. Mr. Speaker, I think we all like to point out that Congress can work together across party lines and have some common goals that can be achieved and recognized, and this is one of those bills. I am very pleased to have such broad support. Mr. Speaker, I encourage continued support for this bill, H.R. 1585, and I yield back the balance of my time.

Mr. HUIZENGA. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, small businesses, entrepreneurs, and emerging companies are what drive the American economy. We meet them in our districts and see firsthand the benefits that their dreams, their innovations, and their hard work provide to our constituents and to our communities. These innovators, entrepreneurs, and risk takers are critical to our country's economic growth and prosperity. In fact, small businesses are responsible for more than 60 percent of the Nation's net new jobs over the past two decades. Sixty percent of all of the new jobs over the past two decades come from these small emerging companies. Their ability to raise capital in the private markets is critical to the economic well-being of the United States. So if our Nation is going to have an economy that provides opportunities for every American, then we must promote and encourage the success and growth of our small businesses and our startups. It is this notion that brings us to this legislation that we are discussing today. Under current law, accredited investors are allowed to purchase securities that haven't been registered with the Securities and Exchange Commission. These types of offerings carry more risks than public offerings. The thought is that individuals with enough financial sophistication or net worth can bear the potential losses that may be associated with these types of securities. How the law works today is that this definition of an accredited investor is solely based on wealth. The ability to participate in a private offering should not be limited to individuals that pass some type of Federal Government assets test. Instead, the ability to participate should be expanded to include all individuals who demonstrate that they have sufficient understanding of the offering. That may be a doctor who has gone through the training and has an idea that a new piece of equipment might work for them; or a scientist who has done research in the lab who says: You know what, this makes sense to me, and they understand the risk that they are entering into. Well, H.R. 1585, the Fair Investment Opportunities for Professional Experts Act, introduced by Representative Schweikert and Representative Hill, will expand the definition of an accredited investor in a way that will appropriately increase the pool of potential investors, thereby providing additional investment opportunities for more Americans and enabling the businesses they invest in to create more jobs. The expansion of the accredited investor definition will enhance the ability of many companies, particularly small and emerging companies and businesses, to raise capital and grow by increasing the pool of potential investors. These are investors, again, that are very knowledgeable about that particular area. This will both provide greater investment opportunities for more Americans and will enable these businesses to begin investing to create more jobs. H.R. 1585 is a bipartisan bill that will help create jobs and a healthier economy. The bill provides Americans with more investment opportunities and enhances small companies' ability to raise capital. This legislation overwhelmingly passed the Financial Services Committee by a bipartisan vote of 58-2, and I urge all of my colleagues to vote ``yes'' on this particular bill today. Mr. Speaker, I reserve the balance of my time.

Mr. HUIZENGA. Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Royce), a member of the Financial Services Committee and chairman of the Foreign Affairs Committee.

Mr. HUIZENGA

Mr. HUIZENGA. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, over the last two decades, our Nation has experienced a 37 percent decline in the number of U.S. listed companies--public companies. Equally troubling, we have seen the number of publicly traded companies fall to around 5,700. These statistics are concerning because they are similar to the data we saw in the 1980s when our economy was less than half its current size. Mr. Speaker, since 2000, the average number of initial public offerings, or IPOs, has fallen to approximately 135 per year, which pales in comparison to the more than 450 IPOs filed per year in the early 1990s. Notably, there has not been a corresponding downward trend in the creation of new companies over that same period. This demonstrates that the regulatory costs associated with going public is deterring new and emerging companies from making the decision to go public. Now, you may ask: Why is this important? Well, first of all, it is preventing our capital markets from reaching their full potential, which sounds very academic and pie in the sky. What does that mean, though? What it really means is that it is not allowing Mr. and Mrs. 401(k) from participating in the economic successes that we have seen lately. Federal securities regulations are typically written for large public companies, and this one-size-fits-all framework imposes a disproportionate burden on small and emerging companies looking to go public. The 2012 Jumpstart Our Business Startups Act, or JOBS Act, which was a bipartisan bill signed into law by President Obama, created a new type of issue called an emerging growth company, which allowed these so-called EGCs with less than $1 billion in revenue to be allowed to communicate with potential investors before an initial public offering and file confidential draft registration statements with the Securities and Exchange Commission. On June 29, 2017, the SEC extended to all companies the option of submitting in advance draft registration statements for IPOs and follow-on offerings within 1 year of an IPO. H.R. 3903, the Encouraging Public Offerings Act, would ensure that all issues making an IPO would be allowed to communicate with potential investors before an offering and file confidential draft registration statements with the Securities and Exchange Commission. In other words, we are going to codify what the Securities and Exchange Commission has said we should be doing. H.R. 3903 simply codifies that practice into law and it will allow these companies to finalize their registration documents without undue expectations from outside influences, and it allows companies to time their offering with the market before making their Form S-1s public and beginning an investor road show. I commend the bipartisan work of Representatives Budd and Meeks on this important bill to ensure that H.R. 3903 applies to all companies, without losing valuable investor protections--a key element in this. This bill will also help encourage companies to go public, and I encourage all of my colleagues to vote in favor of H.R. 3903. Mr. Speaker, I reserve the balance of my time.

Mr. HUIZENGA. Mr. Speaker, I am pleased to yield 5 minutes to the gentleman from North Carolina (Mr. Budd), the sponsor of this very important legislation.

Mr. HUIZENGA. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and to include extraneous material on this bill.

Mr. HUIZENGA. Mr. Speaker, I yielded myself the balance of my time. Mr. Speaker, in closing, we know that trillions of dollars are invested in our economy through IRAs, 401(k)s, and other investment tools. However, these companies need to be publicly traded for Joe and Jane IRA or Mr. and Mrs. 401(k) to even be able to have the opportunity to invest in them. That is what this bill is trying to do. This bill is trying to make sure that those emerging companies, those small startup kind of companies, who may be very innovative or, frankly, might be even more mundane, but they are small and they are looking to grow, that they have an opportunity to do so. Who benefits? Everyone. Everyone is going to be able to take a much more broad view of how they are going to invest their hard-earned dollars that they have worked so long and hard for. Mr. Speaker, this is also, I believe, an important aspect, because we know that economic growth comes from small- and medium-sized businesses. That is where we are going to see really the engine of our economy rev up. It is maybe not as much of a headline grabber as some of those big companies adding 100 or 200 or even thousands of jobs, but all of those smaller companies adding people into the workforce add up to far larger numbers than those numbers are. Mr. Speaker, I ask all of my colleagues to join me in supporting H.R. 3903, and I yield back the balance of my time.

Mr. HUIZENGA. Mr. Speaker, I am pleased to yield such time as he may consume to the gentleman from Ohio (Mr. Davidson), a member of the Financial Services Committee.

Mr. HUIZENGA. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 3903) to amend the Securities Act of 1933 to expand the ability to use testing the waters and confidential draft registration submissions, and for other purposes, as amended.

Mr. HUIZENGA. Mr. Speaker, on that I demand the yeas and nays.

Mr. HUIZENGA

Mr. HUIZENGA. Mr. Speaker, I rise today to celebrate the 150th anniversary of the Big Sable Lighthouse. For a century and a half, the Big Sable Lighthouse has been lighting up the eastern shores of Lake Michigan. On November 1, the people of Ludington will celebrate this momentous occasion. In July 1866, Congress appropriated funds for a new lighthouse to be constructed along the shores of Lake Michigan's Big Sable Point. Completed in 1867, the 112 foot yellow brick structure was later covered with steel plates to withstand the harsh elements of the lakeshore. After 100 years of service, the lighthouse was finally decommissioned in 1968--whereupon it fell into disrepair. Without upkeep, Big Sable was deemed unsalvageable by the U.S. Coast Guard in 1986. Thankfully, a few intrepid businessmen positioned sandbags in front of the lighthouse and residence, shoring up the weathered seawall. These men would later found the Sable Points Lighthouse Keepers Association, whose efforts preserve and promote the now accessible tower. Today, the lighthouse has been completely restored and opens daily for visitors to climb. I ask my colleagues to join me in celebrating the 150 years that Big Sable has been lighting the shores of Lake Michigan. I welcome them to make the two mile hike to Big Sable Point and see what West Michigan has to offer.

Mr. HUIZENGA

Mr. HUIZENGA. Mr. Speaker, I rise today regarding missed votes due to a funeral. Had I been present for roll call vote number 569, H.R. 3551 C-TPAT Reauthorization Act of 2017, I would have voted ``yea.'' Had I been present for roll call vote number 570, S. 504 Asia-Pacific Economic Cooperation Business Travel Cards Act of 2017, I would have voted ``yea.'' Had I been present for roll call vote number 571, Approval of the Journal, I would have voted ``yea.'' Had I been present for roll call vote number 572, Ordering the Previous Question on H. Res. 577--The combined rule providing for consideration of the bill H.R. 469--Sunshine for Regulations and Regulatory Decrees and Settlements Act of 2017 and of the bill H.R. 732--Stop Settlement Slush Funds Act of 2017, I would have voted ``yea.'' Had I been present for roll call vote number 573, Adoption of H. Res. 577--The combined rule providing for consideration of the bill H.R. 469--Sunshine for Regulations and Regulatory Decrees and Settlements Act of 2017 and of the bill H.R. 732--Stop Settlement Slush Funds Act of 2017, I would have voted ``yea.'' Had I been present for roll call vote number 574, H.R. 2142 INTERDICT Act, as amended, I would have voted ``yea.'' Had I been present for roll call vote number 575, Cohen (D-TN) Amendment No. 2--Exempts settlement agreements based on race, religion, national origin, or any other protected category, I would have voted ``nay.'' Had I been present for roll call vote number 576, Johnson (D-GA) Amendment No. 3--Exempts settlement agreements that direct funds to remediate the indirect harms caused by the manipulation of emissions standards in automobiles, I would have voted ``nay.'' Had I been present for roll call vote number 577, Jackson Lee (D-TX)--Amendment No.4--Exempts settlement agreements that pertain to providing restitution to a State, I would have voted ``nay.'' Had I been present for roll call vote number 578, Cicilline (D-RI)--Amendment No. 5-- Exempts settlements that resolve predatory or fraudulent conduct involving residential mortgage-backed securities, I would have voted ``nay.'' Had I been present for roll call vote number 579, Conyers (D- MI)--Amendment No. 6--Exempts settlement agreements that direct funds to remedy indirect harm resulting from lead in drinking water, I would have voted ``nay.'' Had I been present for roll call vote number 580, Passage of H.R. 732--Stop Settlement Slush Funds Act of 2017, I would have voted ``yea.'' Had I been present for roll call vote number 581, Passage H.R. 3898 Otto Warmbier North Korea Nuclear Sanctions Act, as amended, I would have voted ``yea.''

Mr. HUIZENGA

Mr. HUIZENGA. Mr. Speaker, I rise today to congratulate Keys for Kids Ministries on the celebration of its 75th anniversary. Keys for Kids Ministries, formerly known as the Children's Bible Hour, will be celebrating this momentous occasion on October 12. Inspired by a group of West Michigan pastors, Children's Bible Hour first aired as radio programming in 1942. It utilized kid's choir, solos, and radio drama to help children learn about God and inspire a relationship with Jesus. Wildly successful, the Children's Bible Hour grew to television and--by the end of the decade--was filling churches and auditoriums across the country. In 1982, the Keys for Kids devotional was introduced, followed by the Keys for Kids radio broadcast in 1989. Both continue to reach thousands of children each month. Always striving to reach more individuals with the story of Jesus, Keys for Kids recently launched the Creature Feature Storytellers. This marked the beginning of Keys for Kids International and plans to translate the Keys for Kids devotional into 100 different languages. While its name has changed, its organization expanded, and ministries diversified, Keys for Kids remains true to the mission established by Rev. Gil Cosselman, Dr. David Otis Fuller, Rev. Malcom Cronk and Rev. Donald Hescott. I ask my colleagues to join me in recognizing the work of Keys for Kids Ministries, the millions who have been impacted, and the millions yet to be reached. May we celebrate the 75 years of inspired work and look forward to the years ahead.

Mr. HUIZENGA

Mr. HUIZENGA. Mr. Speaker, I rise in support of H.R. 1624. I commend my ranking member from the Subcommittee on Capital Markets, Securities, and Investments, Mrs. Maloney, as well as the work from my colleague from Indiana. This is a commonsense, no-nonsense, bipartisan solution to a mistake that was made by regulators. We need to grant clarity and harmony to those who are borrowing those dollars, those municipalities, States, and cities, as well as the investors and those who hold these bonds. Mr. Speaker, I appreciate the opportunity to be here. I am pleased that we can support H.R. 1624, and I yield back the balance of my time.

Mr. HUIZENGA. Mr. Speaker, I yield 5 minutes to the gentleman from Indiana (Mr. Messer), the sponsor of this legislation.

Mr. HUIZENGA. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today in support of much-needed legislation that would simply fix a 2014 rule by financial regulators and allow municipal bonds to be considered as level 2B liquid assets, at a minimum, for purposes of calculating total high-quality liquid assets, or HQLAs, under the liquidity coverage ratio. The Municipal Finance Support Act is a bipartisan piece of legislation that passed unanimously out of committee, showing its clear need. Municipal securities are frequently issued by the transportation, housing, and healthcare authorities of State and local governments to raise funds to pay for projects ranging from bridges and schools to hospitals and recreational facilities. Excluding municipal securities from treatment as HQLAs will result in higher borrowing costs for State and local governments during times of economic stress. Furthermore, there is no reason why high-quality liquid bonds issued by the United States and municipalities should receive a lower standing than foreign sovereign debt with equivalent or, frankly, even lesser credit quality and market liquidity. Finally, disincentivizing financial institutions from holding investment-grade municipal securities could cause banks to retreat from the $3.8 trillion market, thereby forcing State and local governments to scale back pending projects on roads, schools, and other infrastructure projects financed with the bonds. Classifying investment-grade municipal securities as HQLAs will ensure low-cost infrastructure financing remains available for State and local governments. Although the Federal Reserve has issued an amended rule allowing municipal bonds to count as HQLAs for some banks, neither the OCC nor the FDIC have acted to follow the Fed's lead in amending their HQLA definitions to include these municipal securities. Their inaction creates a split regulatory system in which the treatment of municipal securities for the purpose of measuring the liquidity of the bank's holdings depends entirely upon who the regulator is. Mr. Speaker, I urge my colleagues to support this bill, and I reserve the balance of my time.

Mr. HUIZENGA. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and to include extraneous material on this bill.

Mr. HUIZENGA. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1624) to require the appropriate Federal banking agencies to treat certain municipal obligations as level 2A liquid assets, and for other purposes, as amended.

Mr. HUIZENGA

Mr. HUIZENGA. Mr. Chair, they state in the letter that section 1502 provisions ``. . . inadvertently incentivize buyers on the international market to pull out of the region altogether and source their minerals elsewhere. ``As a result, the conflict minerals movement has yet to lead to meaningful improvement on the ground, and has had a number of unintended and damaging consequences.'' Dodd-Frank's impact on African miners may seem unimportant to many rich-country activists, but in the Congo, it has been the question of life or death. According to a Washington Post article entitled ``How a well- intentioned U.S. law left Congolese miners jobless,'' section 1502 ``set off a chain of events that has propelled millions of Congolese miners and their families deeper into poverty.'' The article goes on to share the story of how a Congolese teenager could no longer feed himself after Dodd-Frank ravaged the country's mining sector, forcing the young man to actually join an armed group; the outcome diametrically opposed in the goal of section 1502. Mr. Chairman, no one can claim that these effects were unforeseeable. In fact, in a letter to the SEC commenting on section 1502, leaders from three Congolese mining cooperatives predicted that the conflict minerals rule would lead to a devastating boycott. These miners wrote: ``We cannot continue to suffer any longer. Do we now have to choose between dying by a bullet or starving to death?'' I ask my colleagues to remember the Congolese aren't alone in their suffering. The SEC's rules apply to nine other nations as if they were all one single country. Section 1502 treats over 230 million Africans living in 10 distinct nations as one undifferentiated group. Dodd-Frank's supporters will say that at this point, some countries neighboring Congo may help smuggle minerals on behalf of armed groups, which is why we need to paint with such a broad brush. But I would ask my colleagues to name another example where a country's economy and each of its neighbors is targeted due to a presumed smuggling risk. Do we design Russia sanctions to apply to each of its 14 adjoining countries, too? Do Iranian sanctions implicate all seven of its neighbors? Perhaps advocates for section 1502 believe that there is no smuggling from Russia and Iran, but the real issue seems to be this: Dodd-Frank supporters have no problem treating Africans differently from other regions of the world. I find that troubling. So now let's consider implementation of section 1502 itself. In April of this year, the GAO reported that section 1502 has produced little meaningful information on conflict mineral sourcing. It found that more than half of the companies in 2016 couldn't even determine what country their minerals came from. Most importantly, virtually none of the companies could tell whether their minerals benefited armed groups, a conclusion that echoed GAO's findings from 2015 and 2014 as well. No wonder companies can't figure this out, Mr. Chairman. Even the Department of Commerce has reported that it is unable to determine whether smelters around the world use minerals traceable to armed groups. In other words, Dodd-Frank is asking U.S. companies--some of which are very small and medium-sized entrepreneurs in large corporations' supply chains--to produce information that even the Federal Government can't provide. As if that weren't enough, the courts also struck down parts of section 1502 for violating companies' First Amendment rights. The Trump administration's SEC has had enough of section 1502 failures, and is now reexamining the conflict mineral rule. The State Department is now conducting a review to see how responsible sourcing can be undertaken more effectively. The amendment I am offering today would suspend section 1502 while the administration completes its assessment. Mr. Chairman, the facts I have laid out on section 1502 aren't partisan, and a suspension shouldn't be either. So let me close with the words of Barack Obama's Securities and Exchange Commission Chair, Mary Jo White, who, in 2013, said: ``Seeking to improve safety in mines for workers or to end horrible human rights atrocities in the DRC are compelling objectives, which, as a citizen, I wholeheartedly share. But as Chair of the Securities and Exchange Commission, I must question, as a policy matter, using the Federal securities laws and the SEC's powers of mandatory disclosure to accomplish these goals.'' It should tell us something when even Democrats' own Securities and Exchange Commission Chair warns that Dodd-Frank overreached on conflict minerals. A suspension would be something that Republicans and Democrats can agree on, and I urge my colleagues to support this amendment. Mr. Chairman, I yield back the balance of my time.

Mr. HUIZENGA. Mr. Chairman, this misguided provision in Dodd-Frank requires the Securities and Exchange Commission to mandate that public companies disclose whether so-called ``conflict minerals'' they use in their products benefit armed groups in the Democratic Republic of the Congo and its nine adjoining countries. Despite its best intentions, section 1502 has been ineffective and, in some cases, has been shown to have increased violence is central Africa. That is why this suspension that I am proposing passed the House last year as an amendment to the FSGG appropriations bill, and a full repeal of section 1502 passed the House this Congress as part of the Financial CHOICE Act. Conflict minerals refer to tin, tungsten, tantalum, and gold, which have been used in a variety of products, from cell phones, cosmetics, jewelry, footwear, apparel, and even auto suppliers located in west Michigan. Mr. Chairman, the breadth of voices opposing section 1502 is remarkable, and I would like to start with those that matter most. For too long, the people of central Africa have been overlooked in this debate, even though they are the ones who suffer from Dodd-Frank's unintended consequences. I include in the Record an open letter from 70 Congolese leaders and other regional experts. An Open Letter Dear governments, companies, non-governmental organisations, and other stakeholders implicated in efforts of various kinds related to the issue of `conflict minerals', In early 2014, two international industry giants--Intel and Apple--issued refined corporate social responsibility policies for minerals sourced in the eastern Democratic Republic of the Congo (DRC). The announcements followed an unprecedented wave of guidelines, law-making, and initiatives over the past few years to `clean up' the eastern DRC's mining sector, and were met with widespread praise. Perhaps the most widely publicised of these efforts is US legislation known as Section 1502 of the Dodd-Frank Act, which asks all companies registered on the US stock market to reveal their supply chains to the Securities and Exchange Commission (SEC) when sourcing minerals from the eastern DRC or neighbouring countries. Canada is in the advanced stages of developing similar legislation, and many other countries are looking closely at the issue. The European Union has introduced a voluntary conflict minerals regulation scheme for all member states, and the United Nations (UN) and Organisation for Economic Cooperation and Development (OECD) have developed guidelines on sourcing natural resources in high-risk areas such as the eastern DRC. These efforts primarily target artisanal (or `informal') mining in the eastern DRC, due to widespread international recognition that so-called conflict minerals (most notably tin, tantalum, tungsten, and gold) produced by artisanal mining in this part of the world have helped conflict actors generate revenue to finance their operations in the DRC over the past two decades. The Situation Despite successes of activists in shaping policy, the conflict minerals campaign fundamentally misunderstands the relationship between minerals and conflict in the eastern DRC. First, while the minerals help perpetuate the conflict, they are not its cause. National and regional political struggles over power and influence as well as issues such as access to land and questions of citizenship and identity are just some of the more structural drivers of conflict. The ability to exploit and profit from minerals is often a means to finance military operations to address these issues, rather than an end in itself. Internal UN assessments, for instance, show that only 8% of the DRC's conflicts are linked to minerals, and specific motivations vary greatly across the vast array of different armed groups. Second, armed groups are not dependent on mineral revenue for their existence. The eastern DRC is a fully militarised economy, in which minerals are just one resource among many that armed groups--and the national army FARDC--can levy financing from. The M23, until recently the most powerful non-state armed group in DRC, never sought physical control over mining activity. Moreover, few local stakeholders have been included in on- going international policy-making, and as a result realities on the ground have not always been taken into account. Setting up the required systems and procedures to regularly access and audit thousands of artisanal mining sites in isolated and hard-to-reach locations spread across an area almost twice the size of France would be a challenge for any government. In the eastern DRC, where road infrastructure is poor to non-existent and state capacity desperately low, the enormity of the task is hard to overstate. But in demanding that companies prove the origin of minerals sourced in the eastern DRC or neighbouring countries before systems able to provide such proof have been put in place, conflict minerals activists and resultant legislation--in particular Section 1502 of the Dodd-Frank Act--inadvertently incentivize buyers on the international market to pull out of the region altogether and source their minerals elsewhere. The Result As a result, the conflict minerals movement has yet to lead to meaningful improvement on the ground, and has had a number of unintended and damaging consequences. Nearly four years after the passing of the Dodd-Frank Act, only a small fraction of the hundreds of mining sites in the eastern DRC have been reached by traceability or certification efforts. The rest remain beyond the pale, forced into either illegality or collapse as certain international buyers have responded to the legislation by going `Congo-free'. This in turn has driven many miners into the margins of legality (for instance, feeding into smuggling rackets), where armed actors return through the loopholes of transnational regulation. Others have simply lost their jobs, and in areas where mining has ceased, local economies have suffered. To put this in context, an estimated eight to ten million people across the country are dependent on artisanal mining for their livelihood. Some former miners have returned to subsistence agriculture, but persisting insecurity levels leave them in abject poverty facing dire living conditions, in fear of missing harvests due to displacement. Others have been prompted to join militias as a means to quick cash in the absence of other opportunities; a particularly perverse impact, when one considers the intentions of the movement. Alongside the impact on mining communities and local economies, several armed groups have responded by turning to different businesses such as trading in charcoal, marijuana, palm oil, soap, or consumer goods. Those remaining in the mining sector have largely traded mineral exploitation on site for mineral taxation a few steps down the supply chain, operating numerous roadblocks that can bring in millions of dollars a year. Others are reported to have sent in family members or civilian allies to run business for them on site, while they remain safely at a distance. For the few mining sites fortunate enough to be reached by Joint Assessment Teams responsible for determining their `conflict-free' status, these teams have been unable to provide the regular, three-month validation visits envisaged in legislation. There is an additional delay of several months following these visits before the Congolese Ministry of Mines reviews and approves the assessment at the national level. Given the speed at which situations can change in volatile environments, infrequent assessments and lengthy delays raise concerns over the accuracy of certification and the credibility of the system. More worrying still, multinational corporations such as Apple and Intel are auditing smelters to determine the conflict-free status of the minerals they source, and not the mines themselves. As smelters are located outside of the DRC and audits are not always conducted by third parties, these processes raise further concerns over whether conflict-free certifications reflect production realities. By far the most advanced site in terms of producing `conflict-free' minerals for sale to the international market is Kalimbi, a tin mining area home to externally-financed initiatives running an industry-led bagging-and-tagging scheme called iTSCi. Yet even here, despite the establishment of a `closed pipeline' from mine to exportation, the mine still suffers from the sporadic influence of armed actors, and miners are made to bear the additional costs of `conflict-free' schemes. This raises further concerns over the credibility of the system in place, and its suitability for the scale-up and expansion to other, more remote mine sites currently underway. Coupled with slow progress in implementation, the trend towards the monopolisation of `conflict-free' supply chain initiatives, in particular traceability by iTSCi, is economically damaging to local populations since it currently excludes and isolates the overwhelming majority of mining communities from legal access to international markets. The Alternative There is broad consensus for the need to clean up the eastern Congo's minerals sector, yet much disagreement about the international community's current model for achieving this goal. As such, efforts to improve transparency in the eastern DRC's mineral supply chains should continue. Yet a more nuanced and holistic approach that takes into account the realities of the eastern DRC's mining sector and the complexity of the conflict is needed. To this end, we make the following five recommendations: Improve consultation with government and communities: Congolese government and civil society were poorly consulted on Section 1502 of the Dodd-Frank Act prior to its passing, and as a result many were unaware of its implications. The few who were consulted were unanimously pro-Dodd-Frank, creating additional conflicts on local levels where endorsement and dissent compete. More Congolese voices must be listened to, and the local context and power structures taken into account. This would ensure greater understanding of the local context and better harmonisation with existing national and regional initiatives, such as the International Conference of the Great Lakes Region's (ICGLR) Regional Initiative against the Illegal Exploitation of Natural Resources. Work towards meaningful reform: The audit process should be designed to improve policies and practices rather than to just provide window-dressing. The dominant belief that static oversight and validation processes ensure `conflict-free' mineral trade is misplaced given the volatile security situation in most of the eastern DRC. Both mines and smelters should be regularly inspected and the time period between inspection and certification minimized. Where this is not feasible, additional waivers or similar measures should not be ruled out. Create incentives towards better practice: Legal frameworks must be supported by real projects on the ground that can meet their requirements. If this is not possible--which is clearly still the case today, nearly four years after the passing of Dodd-Frank--then transition periods must be extended and the lowering of excessively high standards for `conflict-free' minerals should be considered. Similarly, former conflict actors should be incentivised where appropriate to join new `conflict-free' schemes. This may help avoid the eventual subversion or infiltration of the `clean' system put in place, as has been seen to date. Promote fair competition: Regulation must be based on competition that allows not only international businesses but also Congolese producers to influence (i.e. increase) local price schemes. This in turn would encourage a regime that ensures minimum wages which mining cooperatives can guarantee to their members based on their increased leverage on the price fluctuation. Widen the lens: Root causes of conflict such as land, identity, and political contest in the context of a militarized economy, rather than a single focus on minerals, must be considered by advocates seeking to reduce conflict violence. Furthermore, efforts to eradicate conflict minerals should not overlook the fact that artisanal mining is a key livelihood in the eastern DRC that holds as much potential to help steer the region away from conflict as it does to contribute towards it. More supportive measures are needed-- such as those found in the earlier 2009 draft of the US Conflict Minerals Act--that can help capture the economic potential of artisanal mining. Finally, other critical challenges such as access to credit, technical knowledge, hazardous working conditions, and environmental degradation should not be ignored by multinational corporations if they seek to improve business practices and increase transparency in their supply chains. So far, progress has been made in producing more ethical products for consumers, but stakeholders have not yet proceeded to improve the lives of Congolese people, nor address the negative impact current `conflict-free' initiatives are having. If the conflict minerals agenda is to lead to positive change on the ground, legislation passed by national governments and steps such as those outlined by Apple or Intel need to be grounded in a more holistic approach that is better tailored to local realities. Failure to do so will continue to seriously limit the ability of conflict minerals initiatives to improve the daily lives of the eastern Congolese and their neighbours. Worse, these initiatives will risk contributing to, rather than alleviating, the very conflicts they set out to address. List of Signatories 1. Aloys Tegera (Director, POLE Institute Goma) 2. Ann Laudati (Lecturer at the School for Geographical Sciences, University of Bristol) 3. Ashley Leinweber (Assistant Professor of Political Science, Missouri State University) 4. Ben Radley (Researcher, International Institute of Social Studies & `Obama's Law' Producer) 5. Bonnie Campbell (Professor of Political Science, Universite du Quebec a Montreal) 6. Christiane Kayser (Independent Analyst & Civil Peace Service-Bread for the World mobile team) 7. Christoph Vogel (Researcher, University of Zurich & Independent analyst/writer) 8. Cyprien Birhingingwa (Executive Secretary, COSOC-GL & Coordinator of CENADEP Kivu) 9. Daniel Rothenberg (Professor of Practice, School of Politics and Global Studies, Arizona State University) 10. David Rieff (Independent Author and Commentator). 11. Deo Buuma (Executive Secretary, Action pour la Paix et la Concorde--APC, Bukavu) 12. Didier de Failly s.j. (Directeur, Mason de Mines du Kivu, Bukavu) 13. Dominic Johnson (Africa Editor and Deputy Foreign Editor, die tageszeitung) 14. Dorothea Hilhorst (Professor of Humanitarian Aid and Reconstruction, Wageningen University) 15. Emmanuel Shamavu (Director, APRODEPED, Bukavu) 16. Eric Kajemba (Coordinator, Observatoire Gouvernance et Paix, Bukavu) 17. Esther Marijnen (Researcher, Institute for European Studies/Vrije Universiteit Brussel) 18. Evariste Mfaume (Executive Director, ``Solidarite des Volontaires pour l'Humanite'') 19. Gabriel Kamundala (Researcher, CEGEMI & Universite Catholique de Bukavu) 20. Ganza Buroko (Cultural Operator & Coordinator of Yole!Africa, Goma). 21. Godefroid Ka Mana (Professor, ULPGL Goma & UEA Bukavu & Universite Kasavubu Boma) 22. Godefroid Muzalia (Professor, Institut Superieur Pedagogique de Bukavu) 23. Henning Tamm (Postdoctoral Prize Research Fellow, Nuffield College, University of Oxford) 24. Herbert Weiss (Emeritus Professor of Political Science, City University of New York) 25. James Smith (Associate Professor of Anthropology, University of California/Davis) 26. Jean Ziegler (Former UN Special Rapporteur for the Right to Food and Professor at University of Geneva) 27. Jeroen Cuvelier (Postdoctoral Researcher, Wageningen University and Ghent University) 28. John Kanyoni (Independent Consultant and Vice-President of the Congolese Chamber of Mines) 29. Josaphat Musamba (Assistant Professor, Universite Simon Kimbangu of Bukavu) 30. Joschka Havenith (Independent Researcher and Consultant, Cologne). 31. Jose Diemel (Researcher, Special Chair for Humanitarian Aid & Reconstruction, Wageningen University) 32. Joshua Walker (Postdoctoral Research Fellow, University of the Witwatersrand) 33. Josue Mukulumanya (President of the South Kivu mining cooperatives board GECOMISKI) 34. Justine Brabant (Independent Researcher and Journalist) 35. Juvenal Munubo (Member of Parliament, Democratic Republic of the Congo) 36. Juvenal Twaibu (Director, Centre Independant de Recherches et d'Etudes Strategiques au Kivu) 37. Ken Matthysen (Researcher on artisanal mining in eastern Congo, Antwerp) 38. Kizito Mushizi (Member of Parliament, Democratic Republic of the Congo) 39. Koen Vlassenroot (Director, Conflict Research Group & Professor, Ghent University) 40. Kris Berwouts (Independent Consultant and Author). 41. Kristof Titeca (Assistant Professor, University of Antwerp) 42. Laura Seay (Assistant Professor of Government, Colby College) 43. Ley Uwera (Independent Journalist and Author, Goma) 44. Loochi Muzaliwa (Programme Coordinator, Life and Peace Institute DRC) 45. Micheline Mwendike (Activist, on behalf of LUCHA--Lutte pour le Changement/Struggle for Change) 46. Manuel Wollschlager (Conseiller Technique, ZFD-AGEH in Bukavu) 47. Milli Lake (Assistant Professor, Arizona State University) 48. Nicole Eggers (Assistant Professor of African History, Loyola University New Orleans) 49. Odile Bulabula (Deputy Coordinator, RIO--Network for Organisational Innovation, Bukavu) 50. Padraic MacOireachtaigh (Regional Advocacy and Communications Officer, Jesuit Refugee Service). 51. Pamela Faber (Researcher, St Catherine's College, University of Oxford) 52. Passy Mubalama (Independent Journalist and Author, Goma) 53. Paul Muhindo Mulemberi (Member of Parliament, Democratic Republic of the Congo) 54. Paul-Romain Namegabe (Professor of Law, Director of CEGEMI, Universite Catholique de Bukavu) 55. Paulin Bishakabalya (Director of Humanitarian Assistance and Development Committee, Bukavu) 56. Peer Schouten (Postdoctoral Researcher, University of Gothenburg) 57. Phil Clark (Reader in Comparative and International Politics, SOAS / University of London) 58. Rachel Niehuus (Postdoctoral Researcher at University of California, San Francisco) 59. Rachel Strohm (Researcher in Political Science, University of Berkeley) 60. Raf Custers (Independent Journalist and Author on Mining). 61. Remy Kasindi (Director, Centre for Research and Strategic Studies in Central Africa, Bukavu) 62. Rodrigue Rukumbuzi (Coordinator, AGAPE-Hauts Plateaux, Uvira) 63. Rosebell Kagumire (Independent Consultant and Blogger, Kampala/Addis Ababa) 64. Salammbo Mulonda Bulambo (Director, PIAP, Bukavu) 65. Sara Geenen (Postdoctoral Researcher, Institute of Development Policy, Antwerp University) 66. Sekombi Katondolo (Director, Radio Mutaani, Goma) 67. Severine Autesserre (Assistant Professor, Barnard College, Columbia University) 68. Thomas Idolwa Tchomba (Consultant and Mining Expert, Goma) 69. Timothy Makori (Researcher, Department of Anthropology, University of Toronto) 70. Timothy Raeymaekers (Lecturer in Political Geography, University of Zurich) 71. Yvette Mwanza (President of the Mining Committee, Federation des Entreprises Congolaises North Kivu) 72. Zacharie Bulakali (Independent Researcher on mining in eastern Congo). All the signatories listed express their support to the open letter in its above form but not necessarily approve of accompanying opinion pieces and/or explanatory notes, which remain their respective authors' views.