The Foreign Service Journal, January-February 2019

THE FOREIGN SERVICE JOURNAL | JANUARY-FEBRUARY 2019 51 Commercially Viable, Conflict- Free Gold Democratic Republic of the Congo, 2017 By Kevin Fox “Private sector engagement is fundamental to our goal to end the need for foreign assistance.” —Mark Green, USAID Administrator The Democratic Republic of the Congo is home to more than 1,100 mineral substances and a potential mineral wealth of $24 trillion. However, almost all of the gold from the artisanal and small-scale mining (ASM) sector in the DRC is smuggled out of the country, and revenues are often laundered in illicit schemes in Uganda, Rwanda and the Middle East. Mineral smuggling finances armed groups and militia activity in the eastern DRC, perpetuating the wider conflict that has already claimed millions of victims. Although donors have spent tens of millions of dollars to stem the flow of conflict minerals, progress has been slow. USAID development experts and State Department diplo- mats recognized that co-creation and a market-based approach was needed to finally break the link between conflict and the gold trade. Toward this end, USAID implementing partners on the ground worked with ASM cooperatives to build capacity, develop traceability and certification systems, and strengthen partnerships with Congolese market actors. Success came in August 2018 after years of engaging with those involved in both the upstream and downstream supply- chain. A USAID pilot project was able to facilitate the first export of conflict-free gold to the United States from South Kivu province in the wartorn eastern DRC. It was the culmination of years of dedicated work by officers to build trust with the private sector, working jointly to develop a commercially viable solution to a seemingly intractable development challenge. In an interagency effort, USAID and U.S. State Department FSOs collaborated in the field and back in Washington to cultivate partnerships with responsible American companies like Google, Richline, Signet and Asahi Refining. The clean gold was exported by Fair Congo, processed by Asahi Refinery in the United States, made into gold earrings by the Richline Group and sold by Signet Jewelers through brands like Zales and Kay Jewelers. This first-ever export of fully traced and clean gold was small, but it is considered an important step in creating supply chains that are conflict-free and led by the private sector. This success led to posi- tive press coverage frommajor media in the jewelry industry. Looking to the future, USAID is working with the private sec- tor to address the systematic challenges of conflict minerals that harm both business and the public. Within the field of interna- tional development, USAID created a more flexible procurement option that allows the government to work directly with poten- tial collaborators and beneficiaries to “co-create” innovative approaches to tackling complex development challenges. USAID held a co-creation workshop in Kinshasa that brought together more than 70 participants to tackle this complex chal- lenge. Over a three-day period they developedmore than 26 inno- vative concepts that used exciting technology like blockchain and blended tools tomobilize finance, and new approaches to encour- age increased private sector engagement and co-investment to ensure conflict-free gold supply chains. Private-sector representatives at the workshop helped develop STORYUP Two artisanal gold miners from the COOMIANGWE mining cooperative at Nyamurhale in the Democratic Republic of the Congo in 2017.