Friday, November 4, 2011

Is Your Pen Fueling Rape in Eastern Congo?

An interesting independent evaluation of the costs of complying with Dodd Frank 1502 came out last month from Tulane University. This evaluation was carried out at the request of Senator Dick Durbin (D-Il), one of the legislation's key sponsors. Its conclusion: DF-1502 will cost US corporations nearly $8 billion.*

Money quote:
We present a third model focusing on the burden to the affected issuers and their 1st tier suppliers estimating that the actual cost to and of implementing the law is $7.93 billion. Almost half of the total cost – $3.4 billion – would be met with in-house company personnel time, and the rest – $4.5 billion – would comprise outflows to 3rd parties for consulting, IT systems and audits.
Note that they specifically state they're not including the "upstream" part of the mineral chain--the mine to smelter part--in their calculations.

To think of what one-tenth of that amount would do for the people of eastern Congo! Consider that when Hilary Clinton, the world's most powerful feminist, visited eastern Congo two years ago she promised $18 million to help rape victims. That's less than one four-hundredth what DF-1502 may cost.

My favorite factoid in the report doesn't have anything to do with the costs, however: "Conflict minerals are as omnipresent as the ballpoint pen – and that is not just a metaphor. Tungsten, particularly resistant to deforming, is used to manufacture the ball in the ballpoint pen."

I did not know that. Perhaps Enough will soon be organizing a campaign around pens. En garde, Bic!

*The SEC estimated compliance costs at $71.2 million. The National Association of Manufacturers says it will cost $9 to $16 billion--yes, with a B. This isn't a debate I can referee, but I would say the report has the ring of truth--or at least, of being written by an honest broker. 

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