Conflict Minerals: 2018 Company Reports on Mineral Sources Were Similar in Number and Content to Those Filed in the Prior 2 Years

Since the UN first deployed a peacekeeping mission to the DRC 2 decades ago, the United States and the international community have sought to improve security in the country. In eastern DRC, armed groups have committed severe human rights abuses, including sexual violence, and reportedly profit from the exploitation of “conflict minerals”—in particular, tin, tungsten, tantalum, and gold—according to the UN. Congress included a provision in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act that, among other things, required the SEC to promulgate regulations regarding the use of conflict minerals from the DRC and adjoining countries. The SEC adopted these regulations in 2012. The act also included a provision for GAO to annually assess the SEC regulations' effectiveness in promoting peace and security and to report on the rate of sexual violence in the DRC and adjoining countries.

In this report, GAO (1) examines how companies responded to the SEC conflict minerals disclosure rule when filing in 2018 and (2) provides recent information on the rate of sexual violence in eastern DRC and adjoining countries. GAO analyzed a generalizable random sample of SEC filings and interviewed relevant officials. GAO also reviewed U.S. government, UN, and international organization reports; interviewed DRC officials and other stakeholders; and conducted fieldwork in California at an industry conference.

Companies' conflict minerals disclosures filed with the U.S. Securities and Exchange Commission (SEC) in 2018 were, in general, similar in number and content to disclosures filed in the prior 2 years. In 2018, 1,117 companies filed conflict minerals disclosures—about the same number as in 2017 and 2016. The percentage of companies that reported on their efforts to determine the source of minerals in their products through supply chain data collection (country-of-origin inquiries) was also similar to percentages in those 2 prior years. As a result of the inquiries they conducted, an estimated 56 percent of the companies reported whether the conflict minerals in their products came from the Democratic Republic of the Congo (DRC) or any of the countries adjoining it—similar to the estimated 53 and 49 percent in the prior 2 years. The percentage of companies able to make such a determination significantly increased between 2014 and 2015, and has since leveled off, as shown below.

In their 2018 disclosures, some companies reported taking the same actions to improve supply chain data collection that they had taken in past years, and many noted difficulties in determining conflict minerals' country of origin. A subset of the companies in the figure had not determined their minerals' origin or had reason to believe their minerals were from covered countries (and not from scrap or recycled sources) and were, as a result of the inquiry, required to conduct additional research (due diligence). Of those that conducted due diligence, an estimated 61 percent reported they were unable to confirm the source of minerals in their products. An estimated 35 percent reported using conflict minerals from covered countries or from scrap or recycled sources. Although some companies noted that guidance the SEC staff revised in 2017 had caused uncertainty about the filing process, most filings were similar to those submitted in prior years.

GAO found no new population-based surveys on the rate of sexual violence in eastern DRC and three countries adjoining that region—Burundi, Uganda, and Rwanda—but found other types of information on sexual violence.

The exploitation of the mining and trade of “conflict minerals”—in  particular, tin, tungsten, tantalum, and gold from the eastern region of the  Democratic Republic of the Congo (DRC)—has contributed to the  displacement of people and severe human rights abuses. The 2010  Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd- Frank Act) addresses, among other things, trade in conflict minerals.  Section 1502 of the act required several U.S. agencies, including the U.S.  Securities and Exchange Commission (SEC), to take certain actions to  implement the act’s conflict minerals provisions. The act required the  SEC to promulgate disclosure and reporting regulations regarding the use  of conflict minerals from the DRC and adjoining countries (in this report  also collectively referred to as “covered countries”) by April 2011. The  SEC adopted a conflict minerals disclosure rule (SEC disclosure rule) in  August 2012 and published it in the Federal Register in September 2012.

The SEC disclosure rule requires companies to (a) file a specialized  disclosure report known as a Form SD if they manufacture, or contract to  have manufactured, products that contain conflict minerals necessary to  the functionality or the production of those products, and, (b) as  applicable, file a conflict minerals report. The specialized disclosure  report (Form SD) provides general instructions to companies for filing the  conflict minerals disclosure and specifies the information that each Form  SD and conflict minerals report must include. In addition, the Dodd-Frank  Act included a provision for us to report, beginning in 2012 and annually  thereafter, on the effectiveness of the SEC disclosure rule in promoting  peace and security in the DRC and adjoining countries and to report  annually, beginning in 2011, on the rate of sexual violence in war-torn  areas of the DRC and adjoining countries, among other things.

In this report, we (1) examine how companies responded to the SEC  conflict minerals disclosure rule when filing in 2018 and (2) provide  recent information on the rate of sexual violence in eastern DRC and  adjoining countries.

To examine how companies responded to the SEC conflict minerals  disclosure rule when filing in 2018, we downloaded disclosure reports,  along with any related conflict minerals reports, from the SEC’s publicly  available Electronic Data Gathering, Analysis, and Retrieval (EDGAR)  database. We determined that the EDGAR database was sufficiently  reliable for identifying the universe of Form SD filings. To review the  completeness and accuracy of the EDGAR database, we reviewed  relevant documentation, interviewed knowledgeable SEC and  Department of State (State) officials, and reviewed prior GAO reports on  internal controls related to the SEC’s financial systems. We randomly  sampled 100 Forms SD from a population of 1,117 to create estimates  generalizable to the population of all companies that filed in response to  the SEC disclosure rule. We selected this sample size to achieve a  margin of error of no more than plus or minus 10 percentage points at the  95 percent confidence level, which applies to all our estimates unless  otherwise noted. We reviewed the Dodd-Frank Act and the requirements  of the SEC disclosure rule to develop a data collection instrument that  guided our analysis of the Form SD filings. We also interviewed company  representatives attending an industry conference to obtain additional  perspectives on meeting disclosure requirements. In addition, we met  with representatives of a range of stakeholders, including  nongovernmental organizations, international organizations, and the  private sector, in Santa Clara, California, and Washington, D.C.

To provide information about sexual violence in eastern DRC and  adjoining countries published in 2018 and early 2019, we searched  research databases to identify academic articles, and interviewed and  obtained key documents from researchers and representatives of the  SEC, State, and the U.S. Agency for International Development (USAID),  as well as several United Nations (UN) agencies. See appendix I for  more information on our objectives, scope, and methodology.

History of Conflict in the DRC and the Region

The DRC is a vast, mineral-rich nation with an estimated population of  more than 85 million people and an area that is roughly one-quarter the  size of the United States, according to the UN. Since gaining its  independence from Belgium in 1960, the DRC has undergone political  upheaval and armed conflict. From 1998 to 2003, the DRC and eight  other African countries were involved in what has become known as  “Africa’s World War,” which resulted in a death toll of an estimated 5  million people in the DRC, according to State. During that period, in 1999,  the UN deployed a peacekeeping mission to the DRC, and since then the  United States and the international community have sought to improve  security in the DRC. However, eastern DRC continues to be plagued by  violence—including numerous cases of sexual violence reported by the  UN—often perpetrated against civilians by nonstate armed groups and  some members of the Congolese national military.

More recently, presidential elections were originally scheduled for 2016,  when the president’s final term in office expired, but the government  delayed elections until December 2018. During this time, the UN reported  an increase in human rights violations. In 2018 and 2019, the UN  reported that serious violations of human rights remain widespread in the  DRC, including continued acts of sexual violence by government security  forces as well as nonstate armed groups. In addition, the UN noted that  criminal networks and armed groups, including members of the  Congolese national military and police, continued to derive illegal  revenues from smuggling and illicit taxation of minerals from eastern  Congolese mines.

Various industries, particularly manufacturing industries, use the four  conflict minerals—tin, tungsten, tantalum, and gold—in a wide variety of  products. For example, tin is used to solder metal pieces and is also  found in food packaging, steel coatings on automobile parts, and some  plastics. Tungsten is used in automobile manufacturing, drill bits, and  cutting tools, and other industrial manufacturing tools and is the primary  component of filaments in light bulbs. Most tantalum is used to  manufacture capacitors that enable energy storage in electronic products,  such as cell phones and computers, or to produce alloy additives used in  turbines in jet engines. Gold is used as reserves and in jewelry and is  also used by the electronics industry, including, for example, in cell  phones and laptops.

In August 2012, SEC adopted its conflict minerals disclosure rule in  response to Section 1502(b) of the Dodd-Frank Act. In the summary  section of the adopting release for the rule, SEC noted that to accomplish  the goal of helping to end the human rights abuses in the DRC caused by  the conflict, Congress chose to use the Dodd-Frank Act’s disclosure  requirements to bring greater public awareness of the sources of  companies’ conflict minerals and to promote the exercise of due diligence  on conflict mineral supply chains. The map in figure 1 shows the countries  covered by the SEC disclosure rule, including the DRC and its 26  provinces.

The SEC disclosure rule addresses the four conflict minerals named in  the Dodd-Frank Act originating from the covered countries. The rule  outlines a process for companies to follow, as applicable, to comply with  the rule. (See app. II.) The process broadly requires a company to  1.  determine whether it manufactures, or contracts to be manufactured,  products with “necessary” conflict minerals;  2.  conduct a reasonable country-of-origin inquiry concerning the origin of  those conflict minerals; and  3.  exercise due diligence, if appropriate, to determine the source and  chain of custody of those conflict minerals, adhering to a nationally or  internationally recognized due diligence framework, if such a  framework is available for these necessary conflict minerals.

If companies choose to disclose that their products are “DRC conflict free”  in a conflict minerals report, the SEC disclosure rule requires companies  to obtain an independent private-sector audit.

Following an appellate court decision that a portion of the disclosure  required by the SEC disclosure rule violated the First Amendment, SEC  staff issued guidance on April 29, 2014, indicating that, pending further  action by the SEC or a court, companies required to file a conflict  minerals report would not have to identify their products as “DRC conflict  undeterminable,” “not found to be ‘DRC conflict free,’” or “DRC conflict  free.”

In April 2017, following the entry of the final judgment in the case, the  SEC’s Division of Corporation Finance issued revised guidance,  indicating that, in light of the uncertainty regarding how the commission  would resolve those issues and related issues raised by commenters, the  Division of Corporation Finance had determined that it would not  recommend enforcement action to the commission if companies did not  report on specified due diligence disclosure requirements. However, the  SEC staff told us that the guidance is not binding on the commission and  that the commission could still initiate enforcement action if companies  did not report on their due diligence in accordance with the rule.

According to SEC staff, the 2017 guidance, while temporary, is still in  effect, pending review of the rule by the commission. As of June 2019,  the rule was on the SEC’s long-term regulatory agenda, which means— according to SEC staff—that any action would likely not take place until  after March 2020.

Conflict Minerals Disclosures Filed in 2018 Were Similar in Number and Content to Those Filed in Prior Years

Almost as Many Companies Filed Conflict Minerals Disclosures in 2018 as in Each of the Past 2 Years

In 2018, 1,117 companies filed conflict minerals disclosures—slightly  fewer than the number of companies that filed in 2017 and 2016 (1,165  and 1,230, respectively). Our analysis of a generalizable sample of the  1,117 filings found that an estimated 85 percent of the companies filed as  domestic, while the remaining 15 percent filed as foreign. This domestic- to-foreign ratio is similar to the ratio in 2017 and 2016. Overall, when  reporting on the conflict minerals used in their products, an estimated 62  percent reported using tantalum; 63 percent, tungsten; and 66 percent,  gold—percentages similar to those reported in 2017 and 2016. An  estimated 76 percent reported using tin, which was similar to the 69  percent reported in 2017 and significantly higher than the 61 percent in  2016. An estimated 24 percent did not specify the minerals they used.

A Similar Percentage of Companies Conducted Country of Origin Inquiries as in the Past 2 Years; the Percentage of Companies Reporting a Determination Has Increased since 2014

Our analysis of our generalizable sample found that, as in 2017 and  2016, almost all companies that filed conflict minerals disclosures  indicated that they had conducted country-of-origin inquiries. Specifically,  an estimated 100 percent of companies that filed reported that they had  conducted such an inquiry, similar to the percentages that reported doing  so in the prior 2 years. As a result of the inquiries they conducted, an  estimated 56 percent of companies that filed reported whether the conflict  minerals in their products came from covered countries—similar to the  estimated 53 percent in 2017 and 49 percent in 2016. The percentage of  companies able to make such a determination significantly increased  between 2014 and 2015, and has since leveled off. (See figure 2.)

Some Companies Filing in 2018 Reported Taking Actions to Improve Supply Chain Data, Though Many Continue to Report Difficulties in Determining Country of Origin

As in past years, our review of our generalizable sample of filings found  that some of the companies in our generalizable sample reported taking  the same actions to improve supply chain data collection that they had  taken in past years, including using standardized tools and conducting  surveys. Those companies that conducted surveys reported doing further  investigation into the source of minerals, for example, by following up with  suppliers to improve the specificity and completeness of their survey  responses. Other actions companies reported taking to improve supply  chain data collection included educating suppliers about conflict-free  sourcing and creating and publicizing conflict minerals policies. In  interviews, representatives of selected companies and other industry  participants also noted, as they had in prior years, that awareness among  suppliers about the use of conflict minerals continued to increase.  However, many companies reported difficulties in determining the country  of origin of conflict minerals, in part as a result of lack of access to  suppliers and complex supply chains involving many suppliers and  processing facilities. Specifically, some companies reported that some  suppliers did not respond to requests for information, or that supplier and  smelter information was incomplete or contained errors. Some companies  also reported, among other factors, confusion among suppliers about the  requirements of the SEC disclosure rule, and gaps in supplier education  and knowledge.

Almost All Companies Required to Conduct Due Diligence Reported Conducting It in Their 2018 Filings

Our review of our generalizable sample found that 94 percent of the  companies that were required to conduct due diligence, as a result of  their country-of-origin inquiries, reported conducting it. This percentage  is similar to those in prior years: 96 percent in both 2017 and 2016. An  estimated 89 percent of the companies that were required to conduct due  diligence reported using a due diligence framework prescribed by the  Organisation for Economic Co-operation and Development (OECD)  guidance to conduct due diligence on the source and chain of custody of  the conflict minerals in their products. This percentage is comparable to  the 87 percent in 2017 and 92 percent in 2016. The remainder of the  companies reported using non-OECD guidance or did not specify the  guidance they used, if any.

Of all the companies that conducted due diligence (a subset of the  companies that conducted country-of-origin inquiries shown in figure 2  above), an estimated 35 percent reported that they were able to  determine that their conflict minerals came from covered countries or from  scrap or recycled sources, compared with 37 percent in 2017 and 39  percent in 2016. However, an estimated 61 percent of the companies  reported in 2018 that they could not definitively confirm the source of the  conflict minerals in their products, compared with 47 percent in 2017 and  55 percent in 2016. As in prior years, almost all of the companies that  conducted due diligence reported that they could not determine whether  the conflict minerals in their products had financed or benefited armed  groups. Three companies in our generalizable sample determined that  the minerals in at least some of their products had not financed or  benefited armed groups in covered countries. None of these three  companies declared their products “DRC conflict free,” which would  trigger the requirement to file an independent private-sector audit report.  However, one of the three companies did include one such audit report.  Overall, SEC officials approximated that a total of 14 companies filed  independent private-sector audit reports in 2018, compared with 16 in  2017 and 19 in 2016.

Some Companies Noted That SEC Staff Guidance Regarding Due Diligence Reporting Requirements Had Caused Confusion, but Most Companies’ Filings Were Similar to Those Submitted in Each of the Prior 2 Years

Some companies and industry representatives told us—as they did last  year—that even though the revised guidance and other statements made  by SEC staff had raised some uncertainty about the filing process,  companies generally planned to continue to report conflict minerals  disclosure information. As noted earlier, the SEC’s Division of Corporation  Finance issued revised guidance in April 2017 indicating that it would not  recommend enforcement action to the commission if companies did not  report on specified due diligence disclosure requirements.

Some companies and industry participants told us that the SEC staff’s  revised guidance had caused confusion among some suppliers and  stakeholders about reporting requirements, sometimes leading suppliers  to be reluctant or slow to share information required by companies for  their due diligence reporting. In addition, some companies had changed  their approach to filing as a result of the guidance. Specifically, one  company in our generalizable sample of SEC filings for 2018 cited the  SEC staff’s revised guidance recommending no enforcement action as  the reason for its decision not to report on due diligence efforts, despite  noting it had determined there was reason to believe that minerals in its  products may have come from covered countries. Another company we  interviewed cited the same SEC staff guidance as one of the reasons the  company chose not to file an independent private-sector audit.

However, representatives of other companies we interviewed told us that,  generally, their companies planned to continue to report conflict minerals  disclosure information, including information from their due diligence  efforts. In addition, as noted above, our review of a generalizable sample  of SEC filings from 2018 found that the filings were similar in number and  content to those filed in 2017. Some companies told us that they would  continue to file, and even expand their due diligence, in response to the  conflict minerals disclosure rule and other incentives for filing—such as  consumer pressure and European Union reporting requirements  scheduled to take effect in 2021. Furthermore, State reported they had  begun to take actions related to the revised guidance. Specifically, State  officials told us that they had conducted public outreach, such as  attending industry events to remind stakeholders that the conflict minerals  disclosure rule was still in effect, provide an overview of the rules and  requirements, and answer questions. In addition, as of June 2019, the  SEC’s long-term regulatory agenda included an item indicating that the  SEC Division of Corporation Finance is considering recommendations for  the commission to address the effect of litigation over the conflict minerals  rule. According to SEC staff, these recommendations may affect the 2017  guidance pertaining to the conflict minerals rule.

No New Information on Rates of Sexual Violence in Eastern DRC and Adjoining Countries Has Been Published; Case-File and Other Information on the DRC and Burundi Is Available

We did not identify any new information on the rate of sexual violence in  eastern DRC, Burundi, Rwanda, or Uganda since we last reported in  June 2018; we did identify new case-file information and other information  from UN reports for the DRC and Burundi. Since 2011, we have reported  annually on rates of sexual violence derived from population-based  surveys, as well as on case-file data as applicable, for eastern DRC  (which consists of the provinces of Ituri, Maniema, North Kivu, and South  Kivu) and three countries that adjoin that region: Burundi, Rwanda, and  Uganda. See appendix III for population-based surveys containing sexual  violence rates published since 2007. As explained in the sidebar, case-file  information is unsuitable for estimating rates of sexual violence. international entities, law enforcement  agencies, or medical service providers on  sexual violence victims  Data from population-based surveys provide a  more appropriate basis for deriving a rate of  sexual violence because such surveys are  conducted using random sampling techniques  and their results are generalizable to the  target population from which a representative  sample was surveyed.  As we have previously reported, several  factors make case-file information unsuitable  for estimating rates of sexual violence. For  example:

Case-file data are not based on a random  sample of a population, and therefore the  results of analyzing these data are not  generalizable.

Case-file data are not aggregated across  However, case-file data can provide indicators  that sexual assaults are occurring in certain  locations and can help service providers  respond to the needs of victims.

We did not identify any new population-based surveys providing rates of  sexual violence in eastern DRC, Burundi, Rwanda, or Uganda published  since our June 2018 report. The most recent information for eastern  DRC and Rwanda dates from 2016, and for Burundi and Uganda, from  2018.

New Case-File Information about Sexual Violence in the DRC and Burundi Is Available

UN entities, State, USAID, and a USAID-funded program have produced  additional case-file information reported in 2018 and 2019 about  instances of sexual violence in the DRC and Burundi that occurred in  2017 and 2018. While State’s annual country report on human rights  practices for Uganda noted that rape remained a common problem in the  country in 2018, we did not identify new case-file information for the  country, nor did we find new case-file information regarding Rwanda.

Periodic Reporting of Case-File  Information on Sexual Violence in the  DRC and Adjoining Countries  United Nations (UN) entities and the U.S.  Department of State (State) report  periodically on case-file information, while the  U.S. Agency for International Development  (USAID) periodically receives such  information from an implementing partner, as  follows:  Rights Office in the Democratic  Republic of the Congo reports annually  on human rights violations in the  Democratic Republic of the Congo  (DRC), including sexual violence.

Representative of the Secretary- General on Sexual Violence in Conflict  reports annually on cases of conflict- related sexual violence in several  countries, including the DRC, using  information from the United Nations  Stabilization Mission in the Democratic  Republic of the Congo and the United  Nations Population Fund, among others.  reports containing case-file information  from a 5-year program that began in  2017 to counter gender-based violence in  parts of eastern DRC’s North and South  Kivu provinces.

UN entities, State, USAID, and a USAID-funded 5-year program located  in North and South Kivu provinces have produced new case-file  information pertaining to sexual violence in the DRC. UN entities reported  the following case-file information pertaining to sexual violence in the  DRC for calendar year 2018:

United Nations Joint Human Rights Office in the Democratic  Republic of the Congo (UNJHRO) confirmed and documented at  least 939 sexual violence victims (657 women, 279 children, and three  men). According to UNJHRO, this sexual violence was perpetrated  by DRC armed forces and police in many instances. Specifically,  Armed Forces of the Democratic Republic of the Congo (FARDC)  soldiers were responsible for 218 of these victims, 195 of whom were  located in conflict-affected provinces of the DRC. Members of the  Congolese National Police were responsible for 100 victims of sexual  violence, 60 of whom were in conflict-affected provinces of the DRC.

United Nations Stabilization Mission in the Democratic Republic  of the Congo (MONUSCO) documented and verified 1,049 cases  of conflict-related sexual violence against 605 women, 436 girls, four  men, and four boys. According to MONUSCO, 741 of those cases  were perpetrated by combatants of nonstate armed groups and armed  militiamen, with the remaining 308 perpetrated by FARDC soldiers  and Congolese National Police.

United Nations Population Fund (UNFPA) reported 32,342  incidents of sexual violence in conflict-affected provinces between  January 2018 and September 2018.

UN agencies also reported in 2018 that they had provided medical  assistance to over 5,200 survivors of sexual violence, and MONUSCO  reported that it had supported legal clinics that provided counseling and  referrals to 2,243 civilian survivors of sexual violence for calendar year  2017.

State noted two instances of armed groups in eastern DRC perpetrating  sexual violence reported by UN entities in calendar years 2017 and 2018.  Specifically, the Bana Mura, an armed group with ties to local  government, kidnapped 66 people (64 of them children) in Kasai province  and used them as sexual slaves, and members of Raia Mutomboki, a  rebel armed group, perpetrated sexual violence, including gang rape,  against at least 66 women and girls in South Kivu province.

In 2018, USAID reported that it had provided medical, legal, and other  services to 7,755 survivors of sexual and gender-based violence, and had  also worked with local organizations to strengthen their ability to respond  to and prevent such violence, during calendar year 2017. USAID also  reported that it had collaborated with the Ministry of Education to develop  a curriculum focused on preventing such violence, and had worked with  gender-based violence monitoring committees in 618 schools. One of  USAID’s implementing partners addresses sexual and gender-based  violence as part of a 5-year program. This implementing partner reported  reaching 3,135 victims of gender-based violence (including 2,559 adults  and 576 children) in North and South Kivu provinces, providing those victims with health, legal, and psychosocial support services during fiscal  year 2018. The implementing partner also reported providing services to  1,150 victims (including 953 adults and 197 children) during the first  quarter of fiscal year 2019.

State’s annual human rights report for 2018, as well as UNFPA, provided  some case-file information on sexual violence in Burundi.

State’s annual human rights report for 2018 noted that the  government-operated Humura Center had recorded 627 cases of  sexual and gender-based violence in Burundi, including domestic  violence, from January 2018 to early September 2018. This  organization provides survivors of sexual and domestic violence with  legal, medical, and psychosocial services.

UNFPA reported in 2018 that it had recorded 10,592 cases of gender- based violence in 2017 and noted that the Burundian government had  decided to close the local UN Office of the High Commissioner for  Human Rights in December 2018, reducing the access of survivors of  sexual violence to legal services.

UN Reports Some Steps Taken to Address Sexual Violence in the DRC and None Taken in Burundi

UN entities noted that the government of the DRC had taken steps to  address sexual violence in the DRC since 2013, but identified an increase  in the number of incidents reported beginning in 2017. The reports also  noted continued difficulties providing services to victims of sexual  violence and combating a climate in which perpetrators act with impunity.  According to the 2018 annual UN report on conflict-related sexual  violence and UN officials we interviewed in 2019, the government of the  DRC has continued to take steps to address sexual violence by, for  example, holding awareness-raising campaigns and establishing a  nationwide victim helpline. The UN Special Representative of the  Secretary-General on Sexual Violence in Conflict cited other examples,  including the prosecution of military and police officials, as well as leaders  of nonstate armed groups, for conflict-related sexual violence.  Specifically, the UN reported in 2018 that 59 members of the Congolese  National Police and the FARDC were convicted of rape in 2017. Among  those convicted was a FARDC colonel sentenced for failing to prevent  subordinates from committing rape. The UN also noted that the DRC had  successfully prosecuted a commander of the armed group Democratic  Forces for the Liberation of Rwanda for sexual violence as a war crime,  and a South Kivu provincial lawmaker and his militia for crimes against  humanity for the abduction and rape of 39 children. In 2019, an armed  group leader—and former FARDC colonel—was convicted of war crimes,  including rape.

As mentioned earlier, armed conflict and political upheaval within the  DRC and particularly in eastern DRC have long created an environment  of persistent human rights abuses, including sexual violence, according to  UN reports. The UN reported this environment worsened during the lead- up to the presidential elections between 2016 and 2018. Case-file  information the UN collected on sexual violence for 2017 and 2018  indicated an upward trend in incidents in the DRC, according to UN  reports. A UN report cited an increase in documented cases of sexual  violence, linking it to two factors: (1) nonstate armed groups’ use of  sexual violence to enforce control over illicit exploitation of natural  resources, such as gold, and (2) FARDC military operations responding  to the activities of these nonstate armed groups. In addition to these  recent developments, UN officials we interviewed cited longstanding  difficulties such as a significant shortage of response services in the  DRC; common instances of retaliation against survivors who reported  abuse; and, as mentioned above, a climate in which perpetrators act with  impunity.

The UN Commission of Inquiry on Burundi did not identify any steps  taken by the government of Burundi to address the country’s human  rights issues, including sexual violence, in 2017 or 2018. The  Commission of Inquiry—which, according to State, was denied access to  the country by the government of Burundi but conducted interviews with  more than 400 witnesses living in exile—reported that serious human  rights violations, including acts of sexual violence, persisted in 2017 and  2018. For example, the commission reported that the National  Intelligence Service, police, and the youth wing of the ruling political party  used sexual violence to target supporters of the political opposition or  their relatives. The commission also recommended that the government  of Burundi establish investigative bodies to look into human rights  violations and take measures to ensure that victims of sexual violence  have access to appropriate care, including sexual health services and  psychological support.

We provided a draft of this report to the SEC, State, and USAID for  comment. USAID provided written comments describing some of their  related activities in the DRC, which we have reprinted in appendix IV. All  three agencies provided technical comments, which we have  incorporated as appropriate.

We are sending copies of this report to appropriate congressional  committees and to the Chairman of the Securities and Exchange  Commission, the Secretary of State, and the Administrator of the U.S.  Agency for International Development. The report is also available at no  charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-8612 or gianopoulosk@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this  report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

In this report, we (1) examine how companies responded to the U.S.  Securities and Exchange Commission (SEC) conflict minerals disclosure  rule when filing in 2018 and (2) provide recent information on the rate of  sexual violence in eastern Democratic Republic of the Congo (DRC) and  adjoining countries that was published in 2018 and early 2019.

To address our first objective, we downloaded the specialized disclosure  reports (Form SD) from the SEC’s publically available Electronic Data  Gathering, Analysis, and Retrieval (EDGAR) database in September  2018. We downloaded 1,117 Form SD filings and any associated conflict  minerals reports included in EDGAR. Companies filed these Forms SD,  along with related conflict minerals reports in some instances, to provide  information in response to the SEC disclosure rule. To review the  completeness and accuracy of the EDGAR database, we reviewed  relevant documentation, interviewed knowledgeable SEC officials, and  reviewed our prior reports on internal controls related to the SEC’s  financial systems. We determined that the EDGAR database was  sufficiently reliable for identifying the universe of Form SD filings.

We reviewed the conflict minerals section of the 2010 Dodd-Frank Wall  Street Reform and Consumer Protection Act (Dodd-Frank Act) and the  requirements of the SEC disclosure rule to develop a data collection  instrument that guided our analysis of a generalizable sample of Forms  SD and conflict minerals reports. Our data collection instrument was not a  compliance review of the Forms SD and conflict minerals reports. The  questions were written in both yes–no and multiple-choice formats. An  analyst reviewed the Forms SD and conflict minerals reports and  recorded responses to the data collection instrument for all of the  companies in the sample. A second analyst also reviewed the Forms SD  and conflict minerals reports and verified the responses recorded by the  first analyst. Analysts met to discuss and resolve any discrepancies.

We randomly sampled 100 Forms SD from a population of 1,117 to  create estimates generalizable to the population of all companies that  filed. We selected this sample size to achieve a margin of error of no  more than plus or minus 10 percentage points or less at the 95-percent  confidence level, which applies to all our estimates except where noted.  Because we followed a probability procedure based on random  selections, our sample is only one of a large number of samples that we  might have drawn. Since each sample could have generated different  estimates, we express our confidence in the precision of our particular  sample’s results as a 95-percent confidence interval. This is the interval  that would contain the actual population value for 95 percent of the  samples we could have drawn. After using the data collection instrument  to analyze the sample of filings submitted in 2018, we compared the  resulting estimates with our estimates regarding filings submitted in prior  years to determine whether there had been any statistically significant  changes. We also attended an industry conference on conflict minerals  and spoke with company representatives and industry representatives to  gain additional context and perspectives.

To address our second objective, we identified and assessed any  information on sexual violence in eastern DRC and the three adjoining  countries—Burundi, Rwanda, and Uganda—that had been published or  otherwise had become available in 2018 and early 2019 and therefore  would not have been included in our most recent report on the topic. We  discussed the collection of sexual violence–related data in the DRC and  adjoining countries, including population-based survey data and case-file  data, with Department of State and U.S. Agency for International  Development officials and with representatives of nongovernmental  organizations and researchers. We also interviewed officials from the  United Nations (UN) Children’s Fund, the UN Special Representative of  the Secretary-General on Sexual Violence in Conflict, and the UN  Statistics Division, and we obtained information from the UN Population  Fund and UN Organization Stabilization Mission in the Democratic  Republic of the Congo. In addition, we searched research databases,  including MEDLINE and Scopus, to identify new academic articles  containing any additional information on sexual violence published in  2018 and early 2019. Through these searches, we identified an initial list  of 164 articles, which we then narrowed down to a priority list of studies  by considering a variety of factors pertaining to the studies’ relevance to  our second objective. These factors included (1) whether the study  included rates, particularly related to the nation-wide rate of sexual  violence in the DRC and region-wide rate in eastern DRC; (2) whether the  study included case-file information; (3) whether the study contained data  from 2011 or later; (4) whether the study focused on a subset of a  broader population; (5) the geographic scope of the study; and (6)  whether the study included original research. We reviewed the priority list  of 16 articles and determined that none of them met our criteria for  inclusion.

We conducted this performance audit from September 2018 to  September 2019 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.

Appendix II: Summary of the U.S. Securities and Exchange Commission’s Conflict Minerals Rule Disclosure Process

The U.S. Securities and Exchange Commission (SEC) conflict minerals  disclosure rule requires certain companies to file a specialized disclosure  report (Form SD), if the company manufactures, or contracts to have  manufactured, a product or products containing conflict minerals that are  necessary to the functionality or the production of those products. The  rule also requires each company, as applicable, to conduct a Reasonable  County of Origin Inquiry to determine whether it knows, or has reason to  believe, that its conflict minerals may have originated in the covered  countries or that the conflict minerals may not be from scrap or recycled  sources. If the company’s inquiry shows both conditions to be true of its  conflict minerals, the company must exercise due diligence and provide a  description of the measures it took to exercise due diligence in  determining the source and chain of custody of the conflict minerals, the  facilities used to process the conflict minerals, their country of origin, and  of the efforts it made to determine the mine or location of origin with the  greatest possible specificity. The Form SD provides general instructions  for filing conflict minerals disclosures and specifies the information that  companies must provide. Companies were required to file under the rule  for the first time by June 2, 2014, and annually thereafter on May 31.  Figure 3 shows the flowchart included in the SEC’s adopting release for  the rule, which summarized the conflict minerals disclosure rule at the  time it was adopted.

Appendix III: Population-Based Surveys on Sexual Violence Rates Since 2007

Since 2011, we have reported on population-based surveys containing  sexual violence rates in eastern Democratic Republic of the Congo (DRC)  and three adjoining countries: Burundi, Rwanda, and Uganda. Figure 4  shows the publication dates for these surveys, starting with surveys  published in 2007.

Appendix IV: Comments from the U.S. Agency for International Development

Appendix V: GAO Contact and Staff Acknowledgments

In addition to the individual named above, Godwin Agbara (Assistant  Director), Katherine Forsyth (Analyst-in-Charge), Debbie Chung, Justin  Fisher, Jieun Chang, Christopher Keblitis, Grace Lui, Nisha Rai, John  Villecco, and Timothy Young made key contributions to this report. Diana  Blumenfeld, Julia Jebo Grant, Farahnaaz Khakoo-Mausel, and Michael  McAtee provided additional assistance.

Conflict Minerals: Company Reports on Mineral Sources in 2017 Are  Similar to Prior Years and New Data on Sexual Violence Are Available.  GAO-18-457. Washington, D.C.: June 28, 2018.

Conflict Minerals: Information on Artisanal Mined Gold and Efforts to  Encourage Responsible Sourcing in the Democratic Republic of the  Congo. GAO-17-733. Washington, D.C.: August 23, 2017.

SEC Conflict Minerals Rule: 2017 Review of Company Disclosures in  Response to the U.S. Securities and Exchange Commission Rule.  GAO-17-517R. Washington, D.C.: April 26, 2017.

Conflict Minerals: Insights from Company Disclosures and Agency  Actions. GAO-17-544T. Washington, D.C.: April 5, 2017.

SEC Conflict Minerals Rule: Companies Face Continuing Challenges in  Determining Whether Their Conflict Minerals Benefit Armed Groups.  GAO-16-805. Washington, D.C.: August 25, 2016.

SEC Conflict Minerals Rule: Insights from Companies’ Initial Disclosures  and State and USAID Actions in the Democratic Republic of the Congo  Region. GAO-16-200T. Washington, D.C.: November 17, 2015.

SEC Conflict Minerals Rule: Initial Disclosures Indicate Most Companies  Were Unable to Determine the Source of Their Conflict Minerals.  GAO-15-561. Washington, D.C.: August 18, 2015.

Conflict Minerals: Stakeholder Options for Responsible Sourcing Are  Expanding, but More Information on Smelters Is Needed. GAO-14-575.  Washington, D.C.: June 26, 2014.

SEC Conflict Minerals Rule: Information on Responsible Sourcing and  Companies Affected. GAO-13-689. Washington D.C.: July 18, 2013.

Conflict Minerals Disclosure Rule: SEC’s Actions and Stakeholder- Developed Initiatives. GAO-12-763. Washington, D.C.: July 16, 2012.

The Democratic Republic of the Congo: Information on the Rate of Sexual  Violence in War-Torn Eastern DRC and Adjoining Countries.  GAO-11-702. Washington, D.C.: July 13, 2011.

The Democratic Republic of the Congo: U.S. Agencies Should Take  Further Actions to Contribute to the Effective Regulation and Control of  the Minerals Trade in Eastern Democratic Republic of the Congo.  GAO-10-1030. Washington, D.C.: September 30, 2010.

In the Democratic Republic of the Congo and adjoining countries, armed groups have committed severe human rights abuses and reportedly profit from the exploitation of conflict minerals—namely, gold, tantalum, tin, and tungsten.

In 2012, the Securities and Exchange Commission began to require certain companies to disclose their use of conflict minerals sourced from this region.

We found that, of 1,117 companies filing conflict minerals disclosures in 2018, an estimated 56% of them were able to determine whether the conflict minerals in their products came from this region—about the same as in 2017 and 2016.