Tracing Conflict-Free Minerals
Apr 6, 2010
Metals (e.g. tin, tantalum, cobalt and gold) used in electronics, jewelry and other consumer products can originate from conflict zones such as those in the Democratic Republic of Congo and the broader Great Lakes region of Central Africa. Reports from Enough, Global Witness and others tell the tragic story of how these metals can fund militias, deteriorate the environment, and reinforce economic disparities.
In response, electronics companies active in the Global e-Sustainability Initiative (GeSI) and the Electronics Industry Citizenship Coalition (EICC) began working to understand the complex, global supply chains for these metals. A supply chain describes the source of raw material, its processing and manufacturing, and then extends to delivering the final product to the customer. Metals are especially challenging and complex, with multiple steps, mixing of sources, and many actors in the supply chain.
With greater supply chain knowledge and transparency, companies could then begin to design and test strategies to source conflict-free and responsibly mined metals. GeSI and EICC asked RESOLVE to help analyze and respond to this challenge.
The Questions We Started With
In a broad sense, we were asking whether an electronics manufacturer could discover the sources of metals in its products all the way back to the mine; particularly when metals originate in a conflict zone. A jeweler can ask the same question about diamonds, a bike manufacturer, or an auto or airline company for aluminum. Specifically RESOLVE was asked to design and carry out a research program to trace three of these metals (tin,tantalum, and cobalt) into their supply chains to see how far we could go and whether it was possible to trace back to the source.
From the outset, we knew this research would be challenging. To address the challenge, we developed a collaborative research model. We created aStakeholder Advisory Group that included NGOs, electronics companies, investor groups, and mining companies. This brought together a range of viewpoints on human rights, environment, and business concerns. In addition to helping design the research, understand supply chain challenges, and fill information gaps, participating stakeholders are already working to help identify solutions that could lead to more transparent and responsible supply chains for these metals.
While those who served on our stakeholder advisory group were not asked to endorse our report, they certainly helped shape it and we are hopeful that the process and results are beneficial as they work to define solutions.
What We Found
We did encounter significant data gaps and missing information about supplier relationships. Many suppliers failed to cooperate. The small-scale mining sector is informal, particularly in unstable regions, and penetrating this sector proved challenging. However, we knew that understanding the gaps in the supply chain was as important as recording the connections. Why is it so difficult to trace a supply chain completely? What do the gaps, non-response, and lack of cooperation tell us about which strategies could ensure a “clean,” sustainable supply chain?
In four cases we could document (or trace) a supply chain from an electronics manufacturer back to the mine of origin. This means we could trace the transactions, following a paper trail through contracts and relationships. Sometimes we could make links or fill in missing information because a few interested mining companies gave us data from their mines. This allowed us to track the supply chain from the other direction, starting from the mine of origin to the product.
We Found More
Companies and NGOs in other sectors have launched or are designing several interesting and innovative initiatives to increase transparency and responsible sourcing for minerals. Stakeholders in the electronics sector can learn from these programs.
For example, ICMM’s sustainable development framework provides a useful set of principles and guidelines for large-scale mine operators. Retailers can create their own supply chain transparency initiatives. Wal-Mart developed a program with a couple of mining companies to trace the gold and diamonds for its “Love, Earth” jewelry line. Tiffany & Co. and Birks have designed unique supply chain strategies. The Responsible Jewellery Councilbrings together industry participants at each step in the supply chain for jewelry with an eye towards designing social and environmental standards and a system to verify member compliance. The Initiative for Responsible Mining Assurance (IRMA) is working across sectors (industry and civil society) to determine standards for metals mining. The Alliance for Responsible Mining (ARM) and the Diamond Development Initiative (DDI) focus on developing responsible gold and diamonds sources from the artisanal and small-scale mining sectors. These initiatives (and others analyzed in our report) have critics, but woven together, they can create a sustainability fabric, which offers hope (and a baseline) to those focusing on metals used in electronics.
What Is Next?
Many of the companies who responded to our survey are beginning to work on strategies to ensure that smelters can validate their sources as conflict free and in compliance with environmental and social norms. Smelters represent a key point of consolidation, or narrowing, in the supply chain. Others have begun to explore how to source responsibly from the DRC and the Great Lakes region of Central Africa, in the hope that mining in the region can promote economic development, stability, and effective governance. Evidence from our research shows that pilots, testing, and learning, will be essential and that cross-sector collaboration is a key to success.
What Do You Think?
We designed our research so that it could foster collaborative discussion and problems solving. We believed that collaborative inquiry and relationship building was as important an outcome as was the supply chain findings. What do you think? Was this the right approach? What did we miss? What were the limitations? What still needs exploration and further inquiry? What are the next steps?