The 2010 Dodd-Frank Act increased violence in the Congo by 143 percent (and looting by 291 percent) through its “conflict minerals” rule, which has backfired on its intended beneficiaries. So concludes a new study by Dominic Parker of the University of Wisconsin and Bryan Vadheim of the London School of Economics.
As we noted earlier, Dodd-Frank conflict minerals regulations have also caused starvation in the Congo, harmed U.S. businesses, and resulted in increased smuggling—even as they punish peaceful neighboring countries in Africa just for being near the Congo, whose civil wars have killed millions over the last 20 years. They have inflicted great harm on a country that was just beginning to recover from years of mass killing and had the world’s lowest per capita income. The new study is consistent with a 2013 paper by St. Thomas University law professor Marcia Narine that criticized the conflict minerals rule for its dire consequences for the Congolese people.
- Coming up this Friday and Saturday Mar. 27-28 in D.C., Federalist Society holds star-filled conference on Treaties and National Sovereignty at George Washington University [Nicholas Quinn Rosenkranz]
- Trade agreements are being promoted as extending progressive labor and environmental policies around the globe, hmmm [Simon Lester, related] Courts in European nations urged to use Charter to promote affirmative welfare rights, strike down laws liberalizing labor markets [Council of Europe]
- “Croatian-Serb war offenses litigated under Illinois and Virginia conversion/trespass tort law” [Volokh]
- “Did the Supreme Court Implicitly Reverse Kiobel’s Corporate Liability Holding?” [Julian Ku]
- “There Is No National Home for Art” (Kwame Anthony Appiah on cultural patrimony and antiquities repatriation, NYT “Room for Debate”, related Ku on Elgin Marbles; my take on the collectible-coin angle; earlier here, here, here, here, here, here, here, here, here, etc.]
- British government alleges human rights lawyers continued to pursue claims against British military over Iraq even after evidence of probable falsity emerged [Telegraph]
- Treaties the Senate has blocked tend to be aspirational fantasies [Ted Bromund]
[reposted from Cato at Liberty]
Economic sanctions, when they have an effect at all, tend to inflict misery on a targeted region’s civilian populace and often drive it further into dependence on violent overlords. That truism will surprise few libertarians, but apparently it still comes as news to many in Washington, to judge from the reaction to this morning’s front-page Washington Post account of the humanitarian fiasco brought about by the 2010 Dodd-Frank law’s “conflict minerals” provisions. According to reporter Sudarsan Raghavan, these provisions “set off a chain of events that has propelled millions of [African] miners and their families deeper into poverty.” As they have lost access to their regular incomes, some of these miners have even enlisted with the warlord militias that were the law’s targets.
Congress added the provisions to Dodd-Frank in a fit of moral self-congratulation over making sure Americans had the chance to be ethical and thoughtful consumers of such products as jewelry and cellphones (as well as thousands of other products, as it turned out, from auto parts to the foil in food packaging). Publicly held companies would be required to report on their supply connections to “conflict minerals” such as tin, tungsten, and gold mined in war-torn areas of the Democratic Republic of the Congo. Lawmakers assigned enforcement of the law to the Securities and Exchange Commission – a body with scant discernible expertise in either African geopolitics or metallurgy – and barbed it with stringent penalties for disclosure violations, to which are added possible liability in class-action shareholder lawsuits.
Reactions to this morning’s Post account frequently employ words like “unintended” or “tragic” to describe the effect on miners of the law, which people in the Congo soon came to call “Loi Obama” – “Obama’s law”. Unintended and tragic? Maybe. But not unforeseen, because the signs that the law would backfire this way have been in plain sight for years now – as in this 2011 account by Prof. Laura Seay (via) of how “electronics companies now have a strong incentive to source minerals elsewhere, leaving Congolese miners unemployed.” Or this 2011 account by David Aronson in the New York Times of the “unintended and devastating consequences” that he “saw firsthand on a trip to eastern Congo.” Or this more recent paper by law professor Marcia Narine.
But although the evidence has been there for years, the will to believe in the law was too strong – a will fueled by anti-corporate campaigners who take it on faith that when brutalities in the underdeveloped world occur within two or three degrees of separation of the activities of multinational businesses, the right answer must be to blame and shame the businesses.
You might call it an expensive lesson for Americans too, if you assume that anything has been learned. A recent Tulane calculation found that the costs in business compliance have already topped $700 million, with billions more ahead should nothing change. Just this September, the U.S. government conceded that it “does not have the ability to distinguish” which refiners and smelters around the globe are tainted by a connection to militia groups. That is to say, the government has demanded of business a degree of certainty that it cannot achieve itself. Courtesy of UCLA corporate law professor Stephen Bainbridge, here’s a flowchart of what complying might involve for a given business.
If the new Republican Congress wants to be taken seriously about fixing counterproductive regulation, it should make the repeal of this law an early priority. (& Bader)
Because if there was any rationale for creating the Department of Homeland Security, it was to ensure that America was not threatened by unlicensed panties suggestive of baseball-team logos. [Tim Cushing, Techdirt]
- NYC pols, hotel interests unite in the cause of suppressing AirBnB [CNBC, Matthew Feeney/Cato, more, NY mag]
- David Bernstein on Justice Sotomayor’s dissent in Schuette, the Michigan affirmative action case [Cato Supreme Court Review via Volokh Conspiracy, and thanks for quoting my views]
- Restaurant’s amusing response to “do you know I’m a lawyer?” [Above the Law]
- Cronyism in city governance: its enablers, consequences and possible cures [Aaron Renn, Urbanophile, first, second, third, fourth posts; Lincoln Steffens, 1905, on the evils of Rhode Island]
- N.J. toll-taker’s suit: it’s my right to tell motorists “God bless you” whether turnpike authority likes it or not [AP/CBS New York]
- “Q: What has worse terms than gym memberships and class action settlements? A: This class action over gym memberships.” [Center for Class Action Fairness on Twitter]
- US border security great at keeping out bagpipes and Kinder Eggs, not so great at keeping out Ebola [Mark Steyn, more Steyn on bagpipes and earlier on musical instrument confiscations here, here, etc.]
- Was California workers’ comp claim against NFL by former Tampa Bay Buccaneer-turned-P.I.-lawyer inconsistent with his mixed martial arts prowess? [Tampa Bay Times, Lakeland Ledger, earlier and more on California workers’ comp and professional football]
- Salt Lake City’s $6,500 stings: “Secret Shopper Hired to Punish Lyft & Uber Actually Prefers Them” [Connor Boyack, Libertas Institute]
- Are libertarians undermining public accommodations law? (If only.) [Stanford Law Review, Samuel Bagenstos and Richard Epstein via Paul Horwitz]
- Why NYC is losing its last bed and breakfasts [Crain’s New York via @vpostrel]
- U.S. continues foolish policy of restricting crude oil and gas exports, time for that to change [David Henderson first and second posts]
- So it seems the New York Times is now committed to the theory that Toyotas show mechanical unintended acceleration;
- OK, the future Kansas politician was at the strip club strictly on attorney business when the police arrived. Was he billing? [Politico]
…cheese counters could soon be a lot less aromatic, with several popular cheeses falling victim to a more zealous U.S. Food and Drug Administration. Roquefort — France’s top-selling blue — is in the agency’s cross hairs along with raw-milk versions of Morbier, St. Nectaire and Tomme de Savoie. …
Of course, French creameries haven’t changed their recipes for any of these classic cheeses. But their wheels are flunking now because the FDA has drastically cut allowances for a typically harmless bacterium by a factor of 10.
The new rules have resulted in holds even on super-safe Parmigiano Reggiano, and the risk of losing a costly shipment of a perishable commodity is likely to be enough to drive many European producers out of the market for export to America entirely. Highly praised artisanal cheese makers in the United States are facing shutdown as well. [Michael Gebert, Chicago Reader] Earlier on the FDA and cheese regulation here and, from Cato, here (2010 predictions, before FSMA passed), here, here, etc.
They told us this administration was going to be run by wine and cheese faculty liberals. Now where are they when they could actually do us some good?
Related, note that the regulatory pressure is coming from both sides of the Atlantic: “Newsweek: French cheesemakers crippled by EU health measures” [Cheese Notes, with discussion of role of giant manufacturers whose processed cheese operations can comply with the rules] (& welcome The Week, Reason readers; cross-posted at Cato at Liberty)
Remember when Canada was regarded as the high-tax, big-government country, and we weren’t? How times have changed. Burger King is considering becoming Canadian through a tax inversion deal with donut chain Tim Horton’s, aware that north of the border “corporate tax rates are as much as 15 percentage points lower than in the United States,” in the words of Daniel Ikenson at Cato, who writes: “If the acquisition comes to fruition and ultimately involves a corporate ‘inversion,’ consider it not a problem, but a symptom of a problem. The real problem is that U.S. policymakers inadequately grasp that we live in a globalized economy, where capital is mobile and products and services can be produced and delivered almost anywhere in the world, and where value is created by efficiently combining inputs and processes from multiple countries. Globalization means that public policies are on trial and that policymakers have to get off their duffs and compete with most every other country in the world to attract investment, which flows to the jurisdictions where it is most productive and, crucially, most welcome to be put to productive use.” And the fact is that the United States, once the domicile of choice for international business, has slipped badly down the ratings of how difficult it is to do business in various countries. Policymakers “should repair the incentives that drive capital away from the United States.” Full post here. More: Stephen Bainbridge.
- While Bond v. U.S. ruling was a letdown, notably absent was a liberal concurrence defending broad treaty power against critique of Thomas, Scalia et al [Noah Feldman, Bloomberg View, Peter Spiro/Opinio Juris, Julian Ku and John Yoo, David Golove And Marty Lederman]
- Think before you ratify: in controlled experiment, framing proposed change in domestic law as “required by human rights treaty” boosted support especially among Republicans [Spiro/OJ; more on international human rights treaties here]
- Sen. Ted Cruz publishes “Limits To the Treaty Power” in Harvard Law Review Forum [FedSoc Blog, Nicholas Quinn Rosenkranz]
- “The Ever Expanding Role of Trade Agreements: Human Rights” [Simon Lester, Cato]
- EU brass, reformist NGOs insisted that Romania shut down international adoption. Too bad what happened then [Meghan Collins Sullivan/World Affairs Journal, Stephen Beale/National Catholic Register]
- UK plaintiff’s firm Leigh Day helping Caribbean nations in reparations suit against UK [Telegraph, related]
- Not so liberal: Russia cites U.N. Convention on Rights of the Child in rationalizing anti-gay legislation [Box Turtle Bulletin; related on illiberal treaty applications in internet censorship (related), marijuana (related, earlier)]