COBALT Supply Chain Act

Bill: 118-hr-6909
Sponsor: full_name: Rep. Smith, Christopher H. [R-NJ-4]
Introduced: 2023-12-29
Policy area: Foreign Trade and International Finance
Latest action: action_date: 2024-12-17
text: Referred to the Subcommittee on Trade.

Summaries:

tv_txt: I 118th CONGRESS 1st Session H. R. 6909 IN THE HOUSE OF REPRESENTATIVES December 29, 2023 Mr. Smith of New Jersey (for himself, Mr. Van Drew , and Mr. Nunn of Iowa ) introduced the following bill; which was referred to the Committee on Ways and Means , and in addition to the Committees on Foreign Affairs , and Oversight and Accountability , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To ensure that goods made using or containing cobalt refined in the People’s Republic of China do not enter the United States market under the presumption that the cobalt is extracted or processed with the use of child and forced labor in the Democratic Republic of Congo.

1. Short title This Act may be cited as the China’s Odious and Brutally Atrocious Labor Trafficking Supply Chain Act or the COBALT Supply Chain Act . 2. Findings Congress makes the following findings: (1) Cobalt is an essential component of lithium-ion batteries, which are predominantly used for electric vehicles, smartphones, and laptops, among other electronic devices. According to the International Energy Agency, the world is expected to see a fortyfold increase in lithium demand and a twentyfold increase in cobalt demand by 2040, as the demand for electric vehicles is 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 were owned or financed by PRC companies. (4) Firms based in the PRC hold a near monopoly in the DRC’s cobalt sector, according to the Biden Administration. (5) The mining industry in the DRC is beset with child labor and forced labor, disregard for worker safety, and environmental degradation. (6) 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. (7) Artisanal production was chiefly exported to the PRC or processed within the DRC by PRC firms, according to an article “China, the Democratic Republic of the Congo, and artisanal cobalt mining from 2000 through 2020” published in Proceedings of the National Academy of Sciences (PNAS), a peer reviewed journal of the National Academy of Sciences (NAS). (8) In the 2022 Trafficking in Persons Report, the Department of State emphasized that In the [DRC,] artisanal and small-scale mining of cobalt has been associated with forced child labor and other abuses , noting further that Since 2015, the TIP Report narratives on the DRC have highlighted forced labor of children in artisanal cobalt mines. . The DRC is on the Tier 2 Watch List, and will be automatically downgraded to Tier 3, subjecting it to sanctions, if it does not substantively and consistently improve its record on trafficking. (9) 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. 3. Statement of policy It is the policy of the United States to— (1) ensure that the PRC does not undermine the effective enforcement of section 307 of the Tariff Act of 1930 ( 19 U.S.C. 1307 ); (2) lead the international community in ending child labor and forced labor practices wherever such practices occur through all means available to the United States Government, including by prohibiting the importation of goods made with cobalt or containing cobalt extracted from the DRC by companies from the PRC; (3) recognize that the PRC’s dominance in DRC’s cobalt extraction and the processing and refining of cobalt is a national security concern of the United States that requires a strategy developed jointly by the Secretary of State, the Secretary of Defense, the Secretary of Commerce, and the heads of other appropriate Federal agencies; and (4) coordinate with Mexico and Canada to effectively implement Article 23.6 of the United States-Mexico-Canada Agreement to prohibit the importation of goods produced in whole or in part by forced labor or compulsory labor, including those goods produced in the Xinjiang Uyghur Autonomous Region (XUAR), including the processing of cobalt and goods made with cobalt. 4. Rebuttable presumption that covered goods are goods that are made wholly or in part with forced labor or child labor (a) In general Except as provided in subsection (b), the Commissioner of U.S. Customs and Border Protection— (1) shall apply a presumption that covered goods are goods that are made wholly or in part with forced labor or child labor; and (2) shall prohibit the entry of such goods at any of the ports and the United States, and shall otherwise prohibit the importation of such goods, in accordance with section 307 of the Tariff Act of 1930 ( 19 U.S.C. 1307 ). (b) Exception The requirements of paragraphs (1) and (2) of subsection (a) shall not apply with respect to covered goods if the Commissioner determines that the importer of record of the covered goods has demonstrated by clear and convincing evidence that such goods do not contain cobalt refined in the PRC. (c) Report required The Commissioner shall submit to the appropriate congressional committees and make available to the public, not later than 30 days after making a determination to apply the exception under subsection (b) with respect to any covered goods, a report identifying the evidence for such determination. (d) Regulations The Commissioner may prescribe regulations— (1) to implement subsection (b); or (2) to amend any other regulations in order to implement this section. (e) Effective date This section takes effect on the date that is 180 days after the date of the enactment of this Act. (f) Rule of construction Nothing in this section may be construed to limit the application of regulations in effect on, or measures taken before, the date of the enactment of this Act to prevent the importation of goods mined, produced, or manufactured, wholly or in part, with forced labor into the United States, including withhold release orders issued before such date of enactment. 5. Enforcement strategy to address child labor and forced labor relating to covered goods (a) In general Not later than 120 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 submit to the appropriate congressional committees a report that— (1) contains an enforcement strategy of the United States Government to effectively address enforcement of section 307 of the Tariff Act of 1930 ( 19 U.S.C. 1307 ) to prevent the importation into the United States of covered goods that includes measures that— (A) can be taken to trace the origin of goods, offer greater supply chain transparency, and identify third country supply chain routes for the covered goods; and (B) ensure that covered goods do not enter the United States; (2) contains a strategy to ensure that covered goods do not enter the United States market as goods imported from third countries, including from Canada or Mexico; (3) contains a strategy to ensure that covered goods denied entry to the United States market do not later enter the United States market through third countries; (4) describes authorities to seize or destroy covered goods denied entry to the United States; and (5) describes measures to address child labor and forced labor in the mining, production, smelting, or processing of metals or minerals, in particular cobalt and lithium and their derivatives, in the DRC. (b) Matters To be included The strategy required by subsection (a) shall include the following: (1) A list of— (A) covered goods; (B) entities that refine cobalt in the PRC; (C) entities that mine cobalt in the PRC and whether any of these entities operate in the Xinjiang Uyghur Autonomous Region (XUAR); (D) entities that import covered goods in the United States; (E) entities, in the DRC, owned or controlled by PRC entities, or financed by PRC state-owned banks or institutions that mine or process cobalt; and (F) priority sectors for enforcement of imports made with covered PRC goods, with a sector-specific enforcement plan for each priority sector. (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 covered goods. (3) A description of the additional resources necessary for U.S. Customs and Border Protection and other Federal entities, including the Forced Labor Enforcement Task Force, to effectively implement the strategy. (4) A description of how the list of entities required by subparagraphs (B), (C), and (D) of paragraph (1) shall be regularly updated and reported to the appropriate congressional committees. (5) A strategy to coordinate and collaborate with appropriate nongovernmental organizations and private sector entities to implement the enforcement strategy for covered goods and to create and update the list of entities required in subparagraphs (B) and (C) 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 quarterly basis and, as applicable, on any updates to the strategy required by subsection (a) or additional actions taken to address the importation of covered goods, including actions described in this Act. (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 child labor and forced labor in the mining industry of the DRC has ended, including artisanal and small-scale mining sectors. 6. Certification that Federal vehicle purchases are free of parts made or mined with child labor or forced labor (a) In general Except as provided in subsection (b), not later than 90 days after the date of the enactment of this Act, and annually thereafter, the President shall certify whether all vehicles purchased in the prior year by the United States Government are completely free of parts made or mined, wholly or in part, with child labor or forced labor in the DRC or the Xinjiang Uyghur Autonomous Region (XUAR). (b) Exception The certification required by subsection (a) shall not apply with respect to vehicles purchased in the prior year by the Department of Defense. (c) Submission to Congress; publication in Federal Register The President shall— (1) submit the certification required by subsection (a) to the appropriate congressional committees; and (2) publish such certification in the Federal Register. (d) Documentation for certification Documentation mapping the supply chains of all the vehicles and their parts, procured in the prior year by the United States Government, shall be available upon request by Members of Congress from the Department of Homeland Security. 7. Definitions In this Act: (1) Appropriate congressional committees The term appropriate congressional committees means— (A) the Committee on Foreign Affairs, the Committee on Financial Services, and the Committee on Ways and Means of the House of Representatives; and (B) the Committee on Foreign Relations, the Committee on Banking, Housing, and Urban Affairs, and 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 handtools. (3) Child labor The term child labor means work that deprives children of their childhood, their potential, and their dignity, and that is harmful to physical and mental development, as such term is commonly used by the International Labour Organization. (4) Covered goods The term covered goods means goods, wares, articles, or merchandise that contain cobalt refined in the PRC. (5) D RC The term DRC means the Democratic Republic of the Congo. (6) 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 ). (7) P RC The term PRC means the People’s Republic of China.