This seems like a pretty off-the-wall road for the SEC to take, but here we are. New rules have gone into effect that will force publicly traded companies doing business in or with Africa (specifically the DRC) to disclose whether they are using "conflict minerals" - gold, tin, tungsten, and tantalum mined in or around the Congo. Also, companies must disclose facilitation payments (read: bribes) made to African governments for the extraction of oil, natural gas, and other resources. Good luck getting around the Foreign Corrupt Practices Act on that one.
Ostensibly, the new regulations are there so consumers and shareholders can choose whether or not to do business with or invest in companies which indirectly fund the various warlords and other misery pimps in the region. Predictably, the companies most effected by the new regs are screaming bloody murder (no pun intended).
"We can't shoot ourselves in the foot if we want our businesses to compete in a global marketplace," said Tom Quaadman, vice president of the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness.
Translation: if we don't profit from the misery of others, the Chinese certainly will.
There's something to be said for that line of reasoning, if truth be told, as long as you're willing to set aside the moral implications for a moment.
A buddy of mine is a higher-up in a major global telecommunications company, and Africa was one of his areas of responsibility. His particular company made a corporate decision to discontinue bribes of any kind, and he told me that they may as well pull out of Africa altogether. Their African business has been decimated, and the Chinese firms (who have no compunction over paying bribes) have swarmed in to fill the void.
Having seen the type of violence financed by mineral extraction firsthand (in Sierra Leone at one point during my misspent youth), I can say that I wouldn't own stock in a company that was contributing to the violence in Africa, but that's just me and I don't judge others who don't make the same determination.
But what about you guys? Do you care if a company you own stock in or do business with indirectly finances 3rd-World civil wars? Do you think these new regs will change anything? If all the money dries up, will the violence end? Does the SEC have any business requiring these disclosures?
You pretty much already answered my sentiments with this
This is such a touchy subject. It seems like the whole disclosure of facilitation payments is the SEC's way of telling companies that bribing is fair game outside of the US. I think corruption and bribing has a different connotation in other countries. In some countries, corruption and bribery is the cultural norm in politics and business deals. It wouldn't solve the violence in Africa anyways since the Chinese will just take over.
Before I even answer this literally, here's a rhetorical question: since when ISN'T the US bribing people to do our bidding? Guns, food, medicine, political support....we ship all of this over in massive quantities to just about everywhere. And why? The 80 year old, kind, wise boss at the bar who'd basically seen eveything once told me: "The US is the only Empire in history that takes over countries and gives them back, so that their futures are better...and we do this at our own expense. We make mistakes, and we're only human, but that's our actual mission."
No. No. The meat and potatos of this conversation: Yes, I care, and I'd rather have our SOB's dealing with them instead of the Chinese SOB's. American business interests are deeply intertwined with other foreign services from the Peace Corps to the Marine Corps, and everything in between. Just ask anyone who's doing banking in South Africa how their introduction to the CIA was before they started working. By neutering American business (that's what this is about) and allowing the Chinese to take over, the situation will become far worse because they don't even bother with the facade of trying to do right. The people who think they are helping Africa are fucking it one step harder....I don't know if it's ignorance or malice, but this is an asinine move reflecting extreme stupidity. The violence is about control, and the money is ancillary. The sooner that people understand and accept this, the sooner they will stop shitting themselves into thinking that buying rocks from some other place saves a life. Looking away does not make a problem go away. Fucking duh.Goooosfrabah
The SEC is a domestic agency and they aren't sophisticated enough to decipher whether or not a discretionary account [corporate black budget] is being used for bribes or simple 'quiet' projects. Also, State, DOD, and DNI are going to have a fucking conniption that SEC is being used to determine foreign policy: this is regulatory overreach. This should be the domain of the CIA or State and should be coordinated with other agencies because it's going to throw off our entire foreign policy. The people in the SEC, like most finance professionals, should get back to their offices and stick to finance and leave the running of a global power structure to people who understand it. There are a shit ton of batshit loco psychos in this world, but we can't just do business with nice people because it makes us feel good, we have to deal with a very ugly reality realistically if we hope for it to get better. If people can't take it, then FUCKING DON'T, but running foreign policy on the basis of ideology and denial is why I fucking hated Bush....if Obama is behind this, he can get fucked, as of now.
What I realistically see happening is (1) the CIA takes over the role of 'convincing' officials (2) China's presence increases (3) the violence gets worse now that the power structure is in flux (4) when the dust settles, we're faced with several wars of intervention or an extreme isolationist policy....OR more likely a squabble between factions advocating those views. Think Iraq debate 2003 all over again, but about an entire continent, and with no end in sight EVER. The simpler solution is to tolerate bribery as a necessary evil and (1) direct business and cultural investment into Africa...build them up (2) surgical strikes against uncooperative leadership...aka, fucking whack them (3) token joint US/China projects to appease the UN (4) increased security presence, just to make it clear who's running the show, and tell the UN to get fucked if they have a problem with this and aren't contributing.
Ultimately Africa is their own worst enemy, but our role can be positive, negative, or absent. I cast my vote for positive involvement. My belly's full, I live without fear of reprisal for speaking my mind, and I can choose to lead my life as I see fit:I see no reason why everyone on earth shouldn't have those same options and can not for the life of me pretend this doesn't exist.
@UFO Just to be clear, the SEC isn't saying that companies can't continue those practices, just that they must now disclose them. Might seem like splitting hairs, but I think it's a pretty strong distinction.
Also, did you just advocate invading Africa? lol
I'm probably overreacting, but I think that this info should be overseen by a foreign service agency. The only things that are going to happen is a witch hunt based on extremely cryptic data and the SEC's poor ability to interpret it. Results: weakened US business, stronger Chinese involvement, higher death toll in Africa, larger amount of American public shitting themselves (Honestly, the liberals are the worst with this, they ass stupidly just refuse to acknowledge the realities of foreign policy: it's fucking ugly, and they can't deal with it....but it HAS TO be done, so I suggest they don't, and go back to their yoga)
Maybe I'm wrong, but this just feels like such a huge mistake.
I personally think this is a good move. This viscious cycle of letting the business being done, and in the meantime, letting the dictators use the profits for non-constructive ways are hindering their future growth.
But I also think that the SEC should've consulted this matter with other exchanges around the world, and made others to join with them; in this way, it could've been much more effective..
I wonder how this will translate to Joe Blow on Main St, in terms of pricing on products. I heard as a result of this the newest line of 'iproducts' are going to be more expensive as there are trace minerals that go into manufacturing touch screens. These minerals now need to be obtained on the market instead of in a mine. I wonder what a poll of middle class America would look like on this subject actually...
@Kenny iPhone sales haven't suffered since the FoxConn news, so I don't think the average American gives a shit as long as they get cheap products.
Nothing really happened at FoxConn that would really warrant a dramatic behavior shift. FoxConn workers have a below-average suicide rate. Not to mention an enormous waiting list of people seeking work. The suicides in 2010-11 were disproportionately emphasized by the news, partially because they clustered and because newspaper decided to link it to Apple, the largest publicly-traded company in the world and media darling. People in the West like to believe that everyone in the world can (and should) instantaneously enjoy the standards, conditions, and pay of the modern workplace. We are watching progress happen and some are impatient on how slowly it moves- even though Southeast Asia is catching up at the fastest pace every observed.
@rls No argument here. I just meant that with all the bad press about how horrific the conditions were, you'd think sales would drop off, but you'd be wrong. Of course the conditions aren't that bad, but I don't think the American consumer would give a shit even if they were.
I agree with Edmundo, the general American consumer base couldn't care less about how the components for their iPhone were obtained. As long as they get to have the Apple experience of standing in a line for 12 hours, they're content and probably more concerned w/ how uncomfortable they are in that line than the kids fighting and dyign for their commodities.
The most exposure this might get is someone writing words on a picture of African mining children saying how bad it is, get a bunch of likes and raise some awareness. This will, like many other attempts to raise awareness on corrupt exploits, will be forgotten several weeks after it is posted when people post of mild-humored pictures of old post cards with writings that relate to their drinking habits.
You mean like this?
That would be it, yes. I saw a great "tweet" (I'm just getting into the whole twitter thing) from Seth McFarlene the other day that said something like "So we still fired up about the whole Koni 2012' thing?"
Oh, you mean like this:
It's the US. Cynical is our middle name
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