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The UN Panel alleged that Chemie Pharmacie Holland (CPH) had been importing coltan from the eastern DRC. CPH’s business partner, Eagle Wings Resources International (EWRI), had an agreement with the rebel movement, RCD-Goma, to exploit coltan in South-Kivu. The Panel stated that EWRI received privileged access to coltan sites and captive labour because of its close ties to the Rwandan military. When prices of coltan were dramatically raised in 2000, RCD-Goma installed a monopoly to benefit from revenues of the coltan export and used it to finance their war. Wide scale human rights violations took place in the mining area.
Although CPH ended its activities in the DRC in April 2002, a number of NGOs regarded it as relevant to address the question of whether or not CPH’s involvement in the coltan trade during the heights of the civil war had been in compliance with the Guidelines. The Complainants argued that CPH did not make an effort to find out from where the coltan they imported had originated, making it possible that CPH had bought coltan the revenues from which had directly supported war efforts of the RCD-Goma rebels and the Rwandan army. Another issue that needed clarification was whether tax payments made by EWRI to the RCD-Goma over its coltan exports were in accordance with the Guidelines.
In September 2003, the Dutch NCP accepted the case and held separate meetings with NiZA and CPH. The NCP met with both parties in February 2004, but a joint statement could not be agreed.
The Dutch NCP concluded the Guidelines were not applicable, due to the lack of an investment nexus: the business relationship between CPH and EWRI lasted only 2.5 years and CPH acted as a facilitator, at no stage becoming owner of the goods and working on a commission basis.
Nevertheless, in May 2004, the NCP published a statement on corporate social responsibility and the Guidelines (Annex I to the Final Statement). In this statement the Dutch NCP noted that:
CPH could have done more to find out the origin of the ore and the circumstances of it's mining;
The NCP would continue to promote the Guidelines, but that governments and international organisations should advise companies clearly and consistently on doing business in conflict zones;
CPH had acknowledged the importance of the Guidelines, and would introduce the Guidelines with its business partners abroad;
The NCP appreciated CPH’s effort to introduce certificates of origin into it's current business abroad.
The Complainants, dissatisfied with the outcome, issued a press release in June 2004.
OECD Watch case story page: http://oecdwatch.org/cases/Case_33