[House Report 118-895]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 118-895
======================================================================
STOP CHINA'S EXPLOITATION OF CONGOLESE CHILDREN AND ADULT FORCED LABOR
THROUGH COBALT MINING ACT
_______
December 17, 2024.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Smith of Missouri, from the Committee on Ways and Means, submitted
the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 7981]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 7981) to ensure that goods made using or containing
cobalt extracted or processed with the use of child or forced
labor in the Democratic Republic of the Congo do not enter the
United States market, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND...........................................3
A. Purpose and Summary................................. 3
B. Background and Need for Legislation................. 3
C. Legislative History................................. 4
D. Designated Hearing.................................. 4
II. EXPLANATION OF THE BILL..........................................4
A. Extending Limits of U.S. Customs Waters Act.........
III. VOTE OF THE COMMITTEE............................................6
IV. BUDGET EFFECTS OF THE BILL.......................................6
A. Committee Estimate of Budgetary Effects............. 6
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 6
V. Cost Estimate Prepared by the Congressional Budget Office........6
VI. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......7
A. Committee Oversight Findings and Recommendations.... 7
B. Statement of General Performance Goals and
Objectives......................................... 8
C. Information Relating to Unfunded Mandates........... 8
D. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 8
E. Duplication of Federal Programs..................... 8
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............8
A. Changes in Existing Law Proposed by the Bill, as
Reported...........................................
VIII.DISSENTING VIEWS.................................................9
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stop China's Exploitation of Congolese
Children and Adult Forced Labor through Cobalt Mining Act''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Cobalt is an essential component of most lithium-ion
batteries, which are key components in many smartphones,
laptops, and electric vehicles, among other electronic devices.
According to the International Energy Agency (IAE), worldwide
demand is expected to increase over 1,000 percent for lithium
and 600 percent for cobalt by 2040, as demands for alternative
energy systems and battery storage are expected to grow
significantly during this period.
(2) More than one-half of the world's cobalt resources are in
the DRC, which supplied approximately 70 percent of the global
cobalt mine production in 2021.
(3) Fifteen of the DRC's 19 cobalt mines are reportedly owned
wholly or in part by companies located in the People's Republic
of China.
(4) Numerous analysts report significant concerns with forced
labor, including forced or indentured child labor, in the DRC
mining industry.
(5) Approximately 15 to 30 percent of cobalt produced in the
DRC comes from artisanal and small-scale mining. An estimated
255,000 miners work in artisanal and small-scale mining in the
DRC, of whom at least 40,000 are children.
(6) Section 307 of the Tariff Act of 1930 (19 U.S.C. 1307)
states that it is illegal to import into the United States
``goods, wares, articles, and merchandise mined, produced, or
manufactured wholly or in part'' by forced labor, including
forced or indentured child labor. Such merchandise is subject
to exclusion or seizure and may lead to criminal investigation
of the importer.
SEC. 3. INVESTIGATION.
(a) In General.--Not later than 180 days after the date of the
enactment of this Act, the Forced Labor Enforcement Task Force,
established under section 741 of the United States-Mexico-Canada
Agreement Implementation Act (19 U.S.C. 4681), in consultation with the
heads of other relevant Federal agencies, shall complete and submit to
the appropriate congressional committees the results of an
investigation into the alleged use of forced labor in the cobalt mining
industry of the DRC that--
(1) contains a strategy for the United States Government to
effectively enforce section 307 of the Tariff Act of 1930 (19
U.S.C. 1307) to prevent the importation into the United States
of cobalt mined by forced labor that includes measures that--
(A) can trace the origin of goods and offer greater
supply chain transparency relating to cobalt from the
DRC; and
(B) ensure that cobalt mined by forced labor does not
enter the United States;
(2) contains a strategy to ensure that cobalt mined by forced
labor does not enter the United States market as goods imported
from third countries; and
(3) contains a strategy to ensure that cobalt mined by forced
labor denied entry to the United States market does not later
enter the United States market.
(b) Matters to Be Included.--The investigation required by subsection
(a) shall include the following:
(1) A list of--
(A) entities in the DRC that potentially mine or
process cobalt using forced labor; and
(B) categories of downstream products that include
cobalt mined in the DRC and are, therefore, identified
as priority sectors for enforcement under section 307
of the Tariff Act of 1930 (19 U.S.C. 1307).
(2) Recommendations for efforts, initiatives, and tools and
technologies to be adopted to ensure that U.S. Customs and
Border Protection can accurately identify and trace cobalt
mined by forced labor in the DRC.
(3) A description of how the list of entities required by
subparagraph (A) of paragraph (1) shall be regularly updated
and reported to the appropriate congressional committees.
(4) A strategy to coordinate and collaborate with appropriate
nongovernmental organizations and private sector entities to
implement the enforcement strategy for cobalt mined with forced
labor and to create and update the list of entities required in
subparagraph (A) of paragraph (1).
(c) Form.--The report required by subsection (a) and any publicly
published updates described by subsection (d) shall be submitted in
unclassified form, but may include a classified annex, if necessary.
(d) Updates.--After the submission of the strategy required by
subsection (a), the Forced Labor Enforcement Task Force shall provide
briefings to the appropriate congressional committees on a semiannual
basis and, as applicable, on--
(1) any updates to the strategy required by subsection (a);
(2) any additional actions taken to prevent the importation
of cobalt mined with forced labor, including actions described
in this Act; and
(3) any action U.S. Customs and Border Protection has taken
to enforce section 307 of the Tariff Act of 1930 (19 U.S.C.
1307) with respect to cobalt mined in the DRC.
(e) Sunset.--This section shall cease to have effect on the earlier
of--
(1) the date that is 8 years after the date of the enactment
of this Act; or
(2) the date on which the President submits to the
appropriate congressional committees a determination that
forced labor in the DRC mining industry has ended.
SEC. 4. DEFINITIONS.
In this Act:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Ways and Means of the House of
Representatives; and
(B) the Committee on Finance of the Senate.
(2) Artisanal and small-scale mining.--The term ``artisanal
and small-scale mining''--
(A) means mining with minimal to no mechanization;
and
(B) includes the use of intensive hand tools.
(3) DRC.--The term ``DRC'' means the Democratic Republic of
the Congo.
(4) Forced labor.--The term ``forced labor'' has the meaning
given that term in section 307 of the Tariff Act of 1930 (19
U.S.C. 1307).
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
H.R. 7981, the Stop China's Exploitation of Congolese
Children and Adult Forced Labor through Cobalt Mining Act, as
ordered reported by the Committee on Ways and Means on April
17, 2024, requires the interagency Forced Labor Enforcement
Task Force (FLETF) to identify and address instances of forced
labor in cobalt supply chains from the Democratic Republic of
the Congo (DRC).
B. Background and Need for Legislation
Cobalt is an essential component of most lithium-ion
batteries--components in smartphones, laptops, and electric
vehicles. Worldwide demand is expected to increase over 1,000
percent for lithium and 600 percent for cobalt by 2040. Chinese
entities reportedly have ownership stakes in 15 of the DRC's 19
cobalt mines. The DRC supplies approximately 70 percent of the
world's cobalt, which is often controlled by Chinese entities
and allegedly mined with the use of forced labor. 15 to 30
percent of cobalt produced in the DRC comes from artisanal and
small-scale mining. An estimated 40,000 of the 255,000 miners
in artisanal and small-scale mining in the DRC are children.
Thus, H.R. 7981 will require effective enforcement to block
cobalt mined by forced labor in the DRC. The legislation will
require the FLETF to identify what products and priority
sectors the U.S. government should apply its Section 307 (19
U.S.C. 1307) prohibition and will consider the risk of
transshipment or downstream products that potentially reenter
the U.S. through a third country.
C. Legislative History
Background
H.R. 7981 was introduced on April 15, 2024, by
Representative Christopher Smith and was referred to the
Committee on Ways and Means.
Committee Hearing
On July 10, 2023, the Committee held a field hearing
entitled ``Trade in America: Agriculture and Critical Supply
Chains--Kimball, Minnesota.''
Committee Action
The Committee on Ways and Means marked up H.R. 7981, the
``Stop China's Exploitation of Congolese Children and Adult
Forced Labor through Cobalt Mining'' on April 17, 2024, and
ordered the bill, as amended, favorably reported (with a quorum
being present).
D. Designated Hearing
Pursuant to clause 3(c)(6) of rule XIII, the following
hearing was used to develop and consider H.R. 7981:
On July 10, 2023, the Committee held a field hearing
entitled ``Trade in America: Agriculture and Critical Supply
Chains--Kimball, Minnesota.''
II. EXPLANATION OF THE BILL
PRESENT LAW
Section 307 of the Tariff Act of 1930 states that it is
illegal to import into the United States ``goods, wares,
articles, and merchandise mined, produced, or manufactured
wholly or in part'' by forced labor, including forced or
indentured child labor. Such merchandise is subject to
exclusion or seizure and may lead to criminal investigation of
the importer.
REASON FOR CHANGE
The current law prohibits the import of goods derived from
forced or indentured child labor. H.R. 7981 mandates the
interagency FLETF to identify the products and priority sectors
subject to the Section 307 prohibition. It also requires the
FLETF to rigorously assess the risk of transshipment or
downstream products reentering the U.S. through a third
country. Furthermore, the legislation demands transparent and
comprehensive information sharing with Congress regarding the
enforcement actions of U.S. Customs and Border Protection under
Section 307, along with a prompt evaluation of the need for
additional improvements.
EXPLANATION OF PROVISIONS
Section 1. Short Title
The short title of this Act is the ``Stop China's
Exploitation of Congolese Children and Adult Forced Labor
through Cobalt Mining Act.''
Section 2. Findings
Section 2 provides Congress's findings. Congress finds that
more than half of the world's cobalt resources are in the
Democratic Republic of the Congo (DRC), which supplied
approximately 70 percent of the global cobalt mine production
in 2021. Worldwide demand for cobalt is expected to increase
over 600 percent by 2040.
Further, Congress finds that 15 of the DRC's 19 cobalt
mines are reportedly owned wholly or in part by companies
located in the People's Republic of China. Numerous analysts
report significant concerns with forced labor in the DRC mining
industry. Congress recognizes that Section 307 of the Tariff
Act of 1930 (19 U.S.C. 1307) prohibits imports into the United
States of goods manufactured wholly or in part by forced labor.
Section 3. Investigation
Section 3 requires the interagency FLETF to complete and
submit to the appropriate congressional committees the results
of an investigation into alleged use of forced labor in the
cobalt mining industry of the DRC.
This section establishes that the investigation should
include (1) a list of entities in the DRC that potentially mine
or process cobalt using forced labor and (2) categories of
downstream products that include cobalt mined in the DRC, which
are identified as priority sectors for exploration under
section 307.
Lastly, this section requires (1) semiannual briefing
updates to Congress regarding updates to the strategy; (2)
updates on additional actions to prevent the importation of
cobalt mined with forced labor; and (3) updates on any action
U.S. Customs and Border Protection has taken to enforce section
307 with respect to cobalt mined in the DRC.
Section 4. Definitions
Section 4 defines terms used in the Act.
EFFECTIVE DATE
The provision is effective no later than 180 days after the
date of enactment of this Act.
III. VOTE OF THE COMMITTEE
In compliance with the Rules of the House of
Representatives, the following statement is made concerning the
vote of the Committee on Ways and Means during the markup
consideration of H.R. 7981, ``Stop China's Exploitation of
Congolese Children and Adult Forced Labor through Cobalt Mining
Act,'' on April 17, 2024.
H.R. 7981 was ordered favorably reported to the House of
Representatives as amended by a roll call vote of 30 yeas to 12
nays and 1 abstention (with a quorum being present). The vote
was as follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Abstain
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO)..................... X ...... ......... Mr. Neal............. ...... X .........
Mr. Buchanan....................... X ...... ......... Mr. Doggett.......... ...... X .........
Mr. Smith (NE)..................... X ...... ......... Mr. Thompson......... ...... X .........
Mr. Kelly.......................... X ...... ......... Mr. Larson........... ...... X .........
Mr. Schweikert..................... X ...... ......... Mr. Blumenauer....... ...... X .........
Mr. LaHood......................... X ...... ......... Mr. Pascrell......... ...... ...... X
Dr. Wenstrup....................... X ...... ......... Mr. Davis............ ...... X .........
Mr. Arrington...................... X ...... ......... Ms. Sanchez.......... ...... X .........
Dr. Ferguson....................... X ...... ......... Ms. Sewell........... X ...... .........
Mr. Estes.......................... X ...... ......... Ms. DelBene.......... X ...... .........
Mr. Smucker........................ X ...... ......... Ms. Chu.............. ...... X .........
Mr. Hern........................... X ...... ......... Ms. Moore............ ...... X .........
Ms. Miller......................... X ...... ......... Mr. Kildee........... ...... X .........
Dr. Murphy......................... X ...... ......... Mr. Beyer............ X ...... .........
Mr. Kustoff........................ X ...... ......... Mr. Evans............ ...... X .........
Mr. Fitzpatrick.................... X ...... ......... Mr. Schneider........ X ...... .........
Mr. Steube......................... X ...... ......... Mr. Panetta.......... X ...... .........
Ms. Tenney......................... X ...... ......... Mr. Gomez............ ...... X .........
Mrs. Fischbach..................... X ...... ......... ..................... ...... ......
Mr. Moore.......................... X ...... ......... ..................... ...... ......
Mrs. Steel......................... X ...... ......... ..................... ...... ......
Ms. Van Duyne...................... X ...... ......... ..................... ...... ......
Mr. Feenstra....................... X ...... ......... ..................... ...... ......
Ms. Malliotakis.................... X ...... ......... ..................... ...... ......
Mr. Carey.......................... X ...... ......... ..................... ...... ......
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 7981, as
reported. The estimate prepared by the Congressional Budget
Office (CBO) is included below.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee states further that the bill involves no new or
increased tax expenditures.
V. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
H.R. 7981 would require the Forced Labor Enforcement Task
Force (FLETF) to investigate the alleged use of forced labor in
the cobalt mining industry in the Democratic Republic of the
Congo (DRC). The bill would require the FLETF to report to the
Congress within 180 days on a strategy to prevent cobalt mined
by forced labor from being imported and to provide semi-annual
briefings on any updates to that strategy.
The FLETF is composed of seven member agencies, and those
agencies determine how many people they will assign to the task
force. Funding for the task force is provided by the member
agencies out of their own appropriations. Under the bill, the
required work would cease after the earlier of eight years or
when the President submits to the Congress a determination that
forced labor in the DRC mining industry has ceased.
Based on information provided by the Department of Homeland
Security and the cost of similar activities, CBO expects that
the FLETF would need about 10 full-time employees, at an
average cost of $200,000 per person in 2025 and upgrades to its
information technology systems to investigate the use of forced
labor and write the report. On that basis, and accounting for
anticipated inflation, CBO estimates that implementing H.R.
7981 would cost $12 million over the 2024-2029 period.
The CBO staff contact for this estimate is Margot Berman.
The estimate was reviewed by H. Samuel Papenfuss, Deputy
Director of Budget Analysis.
Mark P. Hoeller
(For Phillip L. Swagel, Director, Congressional Budget Office).
VI. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives, the Committee made findings and
recommendations that are reflected in this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill does not authorize funding, so no statement of general
performance goals and objectives is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
E. Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
The bill, as reported, does not propose to repeal or amend
a statute or part thereof.
VIII. DISSENTING VIEWS
Committee Democrats recognize child labor and forced labor
taint the global supply chain of cobalt, a critical component
in lithium ion batteries and other products important for
modern technologies, including electric vehicles. An estimated
four-fifths of the world's cobalt remains buried under the
ground in the Democratic Republic of the Congo (DRC).
Companies based in China dominate the mining and refining
of cobalt in the DRC. Chinese companies own about 80 percent of
the DRC's cobalt output, refine the mineral in China, and then
sell the product to battery makers around the world.
As pointed out by Committee Democrats during the markup,
child labor and forced labor in the cobalt mining sector in the
Democratic Republic of the Congo (DRC) is well-documented. The
U.S. Department of Labor Bureau of International Labor Affairs
(ILAB) has programs to combat child labor and forced labor in
the DRC cobalt mining sector. Committee Democrats have
supported increased funding for these and other ILAB programs
aimed at ending child labor and forced labor globally.
During the markup, Rep. Moore (D-WI) offered an amendment
to strengthen H.R. 7981, as amended. The amendment would have
expanded the scope of the investigation required by H.R. 7981
to include cobalt, copper, gold, lithium, tantalum, tin,
tungsten, and titanium. The amendment would have prohibited the
entry of covered minerals mined wholly or in part in the DRC
into the United States unless the Commissioner of U.S. Customs
and Border Protection determines the entry was not produced
wholly or in part by forced labor. Additionally, the amendment
would have required the Forced Labor Enforcement Task Force to
devise a strategy for working with allies and partners to
ensure that covered minerals mined by forced labor do not enter
the United States or other countries. Committee Democrats
present at the markup unanimously supported the amendment.
Committee Republicans unanimously opposed the amendment.
Rep. Pascrell (D-NJ) also introduced an amendment to
strengthen H.R. 7981, as amended. The amendment would have
required a strategy specifically to address the use of forced
labor from Chinese, Uyghur, and Turkic peoples by entities in
the Democratic Republic of the Congo cobalt mining sector. The
amendment would prohibit the entry of cobalt mined wholly or in
part in the DRC into the United States unless the Commissioner
of U.S. Customs and Border Protection determines the entry was
not produced wholly or in part by forced labor. Committee
Democrats present at the markup unanimously supported the
amendment. Committee Republicans unanimously opposed the
amendment.
The majority of Democratic Members present at the markup
opposed favorably reporting H.R. 7981, as amended, to the House
of Representatives.
Sincerely,
Richard E. Neal,
Ranking Member.
DISSENTING VIEWS
First, thank you, Mr. Chairman, for recognizing that forced
labor continues to be an issue the Congress needs to work to
prevent.
House Democrats have fought for strong enforcement of the
U.S. prohibition against imports made with forced labor,
notably as the main proponents of the Uyghur Forced Labor
Prevention Act and the establishment of the Forced Labor
Enforcement Task Force in the USMCA.
And, House Democrats have supported increased funding for
programs to combat child labor and forced labor, including
programs at the U.S. Department of Labor Bureau of
International Labor Affairs. Republicans instead have proposed
cutting funds for these programs.
And, I know that this Committee has a critical role to play
in building on that record and helping to end forced labor in
our supply chains.
One area of longstanding interest for me has been in the
mining of critical minerals, especially in places like the
Democratic Republic of the Congo (DRC).
I served on the House Financial Services Committee in 2010,
when Congress passed the Dodd-Frank Act.
As you will all recall, the Dodd-Frank Act directs the SEC
to issue rules requiring certain companies to disclose their
use of conflict minerals if those minerals are ``necessary to
the functionality or production of a product'' manufactured by
those companies. Under Dodd-Frank, these minerals include
tantalum, tin, gold, and tungsten.
There were significant concerns that the exploitation and
trade of these minerals by armed groups helped to finance
conflict in the DRC and contributed to an emergency
humanitarian crisis.
Section 1502 of Dodd-Frank and the SEC's related Conflict
Minerals Rule helped improve the global minerals supply chain
transparency and break links between the minerals trade and
violent conflict in the DRC.
Transparency reforms are an important part of a much
broader peacebuilding and good governance effort in the DRC
that must be further expanded.
I thank the Chairman for continuing the conversation around
minerals mined using forced labor in the DRC and preventing
these minerals from entering the United States market. I agree
that this continues to be a problem that must be addressed.
However, the investigation and report included in this
Committee Print is not enough to tackle this problem.
Child labor and forced labor in the cobalt mining sector in
the DRC is well documented.
We cannot ignore the existing evidence that child and
forced labor taint the global supply chain of cobalt.
And we should feel compelled to take meaningful action
because of the prominent role that cobalt plays in our economy
because it's a critical component in products important for
modern technologies, including portable telephones and electric
vehicles.
An estimated four-fifths of the world's cobalt is buried
under the ground in the DRC. So focusing on the DRC definitely
makes sense.
So, while I am grateful to the Chairman for his interest in
addressing forced labor, I cannot support this proposal because
another study and report of a well-known egregious problem
isn't enough.
Gwen Moore,
Member of Congress.