UFLPA Co-Author Wants Same Presumption for Cobalt Processed in China

A lead author of the Uyghur Forced Labor Prevention Act is seeking to pass a law mandating the same treatment for goods containing cobalt refined in China. China’s Odious and Brutally Atrocious Labor Trafficking Supply Chain Act, or the Cobalt Supply Chain Act, would tell CBP that all cobalt refined in China should be banned from import, under the assumption it was mined wholly or in part with forced labor or child labor.

The detention of these goods would be reversed only if "the importer of record of the covered goods has demonstrated by clear and convincing evidence that such goods do not contain cobalt refined in" China, the bill's draft language says.

Rep. Chris Smith, R-N.J., co-chair of the Congressional-Executive Commission on China, said during a hearing Nov. 14 that the administration probably will not support this bill. He expects to introduce it later this week.

"But for the sake of these kids ... there needs to be a pivot point," Smith said.

In an interview after the hearing, Smith said he expects if the bill does become law, it will be disruptive to the sale of electric cars and trucks with lithium-ion batteries. About 80% of cobalt is processed in China. Although the majority of that cobalt is not from the mines that employ children, all the cobalt could be mixed together during processing in China.

Smith said he doesn't want to wait for a different supply chain to be built so that electric vehicle manufacturers would have ways to avoid detentions. "Necessity is the mother of invention, and as this makes its way through, and they realize they're serious," Smith said, he thinks cobalt processing would develop in other places that would be willing to track which cobalt they were buying.

He said that it took three years to pass the Trafficking in Persons bill he has championed, and several years to get a bill to create Global Magnitsky sanctions, as well. He said he had 15 co-sponsors on a previous version of this bill, which focused on Congo more than China. He called China "willing accomplices."

Witnesses at a hearing on how China exploits child and forced labor in Congo split on the idea of effectively banning Congolese cobalt from the U.S. market.

Joseph Mulala Nguramo, who grew up in Congo and is a nonresident fellow in the Freedom and Prosperity Center at the Atlantic Council, said he supports a ban on the import of cobalt from Congo if it's mined with child labor or forced labor. But, he said, in concert, the U.S. should aggressively implement and expand the African Growth and Opportunity Act, and aid to Africa, while Congo should prosecute government officials who collude "with businesses that engage in inhumane practices."

Milos Ivkovic, an adjunct professor at Washington University School of Law, didn't explicitly say he supports that approach, but said that it's absurd to say that cobalt mined with child labor is not entering the U.S.

In his written testimony, he said that the U.S. government would have more leverage than individual companies trying to improve mining practices in Congo, but "an absolute ban on imports may have negative short-term effects on the U.S. market -- an issue that can be perhaps addressed through licensing and due diligence requirements overseen by the authorities." He suggested Smith's bill be a starting point for more discussion. He said Congress might want to amend the conflict minerals Dodd-Frank language to include cobalt instead.

He noted that changing the cobalt supply chain may well lead to higher costs, and also could increase the prices of laptops or EVs. He said that Western companies would only enter cobalt mining or refining with government support that would prevent them from being undercut by Chinese prices.

"The argument that Western companies themselves currently have the power or incentive to force Chinese-backed counterparts to comply with international standards is a difficult one to make," he testified.

Witness Nicolas Niarchos, a freelance journalist who has covered Congolese mining, testified, "An environmental catastrophe is underway in southern [Congo]. The rush to produce devices, batteries and electric products more cheaply have created a demand for metals that has led to more and more unscrupulous behavior. Chinese firms and traders are at the forefront of these practices."

Niarchos said there are specific mines that follow appropriate environmental standards and that don't exploit workers or employ children, and that modern mines that don't employ children produce the majority of cobalt from Congo. But he also said that Chinese brokers who claim they are avoiding tainted cobalt do buy from artisanal mines.

Niarchos said children are not in forced labor as commonly defined -- rather, their families are so poor that the children also need to work so there is enough for the family to eat.

He said a ban on Congolese cobalt to save those children sounds good on paper, but unless it is paired with job creation in those regions, it would harm the poorest in Congo.

"In the east of [Congo], we have seen how bans of tantalum and tin ore have contributed to criminality instead of curbing it, so new solutions must be envisaged. They have also empowered unscrupulous traders who deal in falsified tags. Let’s try not to make the same mistake again," he said.

Smith's bill says that within 120 days of enactment, the Forced Labor Enforcement Task Force, the same group responsible for adding companies to the UFLPA entity list, would need to produce a strategy on how to prevent the importation of cobalt-containing goods that have cobalt processed in China, including what can be done "to trace the origin of goods, offer greater supply chain transparency, and identify third country supply chain routes for the covered goods" and "describes authorities to seize or destroy covered goods denied entry to the United States."

That strategy would include a list of covered goods, the entities that import these goods, priority sectors, and enforcement plans for those sectors.