NiZA et al. vs. CPH

Allegations

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.

The UN Panel alleged that Chemie Pharmacie Holland (CPH) imported 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 has ended its activities in the DRC in April 2002, a number of NGOs regarded it as relevant to address the question as to whether or not CPHs involvement in coltan trade during the heights of the civil war were in compliance with the OECD Guidelines.The complainants argued that CPH did not make an effort to find out from which traders the coltan they imported originated, making it well possible that CPH bought coltan of which the revenues have 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.

Relevant OECD Guidelines

• Version 2000 Chapter II
• Version 2000 Chapter II Paragraph II.1
• Version 2000 Chapter II Paragraph II.11
• Version 2000 Chapter II Paragraph II.2
• Version 2000 Chapter IV
• Version 2000 Chapter IV Paragraph IV.1 Subparagraph IV.1.B
• Version 2000 Chapter IV Paragraph IV.1 Subparagraph IV.1.C
• Version 2000 Chapter IV Paragraph IV.4 Subparagraph IV.4.B
• Version 2000 Chapter V
• Version 2000 Chapter V Paragraph V.0
• Version 2000 Chapter V Paragraph V.2
• Version 2000 Chapter V Paragraph V.3
• Version 2000 Chapter VII
• Version 2000 Chapter VII Paragraph VII.2
• Version 2000 Chapter X

Outcome

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, because the lack of an investment nexus. Despite its decision, in May 2004, the NCP published a generic statement on corporate social responsibility and the Guidelines. The complainants, dissatisfied with the outcome, issued a press release in June 2004.

More details

Documents

• press release

  15 June 2004

  NGOs issue a press release stating their dissatisfaction with the outcome.

  ActionAid NL
• statement

  1 May 2004

  NCP concludes the Guidelines are not applicable, because the lack of an investment nexus. NCP publishes a generic statement on corporate social responsibility and the Guidelines.

  NCP Netherlands
• accept

  17 September 2003

  The Dutch NCP accepted the case.

  NCP Netherlands
• file

  3 July 2003

  Complaint filed with Dutch NCP.

  Milieudefensie
• campaign

  1 February 2002

  Milieudefensie (FOE Netherlands) launched a letter writing action to ask CPH to investigate whether the military in the DRC profited from their activities. CPH never responded.

  Milieudefensie