Case story

  • United States

OECD NCP USA - FoE US & RAID vs. Cabot Corporation

Democratic Republic of Congo 2004

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Story

In October 2002, a United Nations Panel of Experts accused 85 OECD-based companies of violating the Guidelines for their direct or indirect roles in the illegal exploitation of natural resources in the Democratic Republic of Congo (DRC). The Panel alleged that “elite networks” of political and military elites and businesspersons fueled the conflict in order to retain their control over the country’s vast natural resources.

Cabot Corporation, headquartered in Boston, Massachusetts, was cited by the Panel for its indirect business ties and involvement in purchasing, trading and/or using coltan from the DRC. Cabot denied knowingly having received “any illegal materials from the Congo”. However, a report by the Belgian Senate states that Eagle Wings Resources International had a long-term contract to supply Cabot with coltan.

Despite the listing of Cabot as “resolved” in the Panel’s final, October 2003 report, the origin of the coltan the company purchased prior to 2001, RAID and FoE have raised the specific instance due to a lack of adequate investigation by the State Department into allegations raised by the UN panel of Experts' concerning the direct or indirect complicity of the company in fueling the natural-resource driven war in the Democratic Republic of the Congo (DRC).

Outcome

On August 23, 2004, the US NCP rejected the complaint on the grounds that the allegations “have not been adequately substantiated, denied by the firms concerned, and called into doubt by the party that originally made them”. The NCP stated it is “prepared to make further inquiries with the UN regarding the availability of any further information on the US firms mentioned in the UN Panel’s report”. In a follow-up meeting in January 2005 in Washington, DC, the complainants provided the NCP with a copy of a contract between EWRI and RCD-Goma to export coltan from the eastern DRC. According to a report by the Belgian Senate, Eagle Wings Resources International had a long-term contract to supply Cabot with coltan. The Panel asserted in its October 2002 report that “no coltan exists from the eastern [DRC] without benefiting either the rebel group or foreign armies.” In that meeting, the US NCP stated he had not sought additional information from the UN. The NCP offered to see if the companies would participate in an “informal” dialogue with RAID. When the complainants followed-up in September 2005, the US NCP confirmed that the companies had received his letter, but they never responded to his offer. The US NCP never addressed the Belgian Senate’s findings that Cabot Corporation had a long-term contract with EWRI and the additional evidence provided by the complaintants in this regard. In August 2006, RAID wrote to all the US companies asking whether the UN Panel’s allegations led to changes in business and management practices. No response has been received from any of the companies.


References

OECD Watch case story page: http://oecdwatch.org/cases/Case_45

Contributor(s): This article was modified by Nicolaclayre (3), Kyle (3).