29 March, 2010

Conflict minerals and corporate responsibility

Sergio Abranches

Heavy-weights of the computer and electronic industries have joined forces to rid their supply-chains from “blood minerals” coming from the Congo’s militarized mines.

They are supporting “Phase 2” of the initiative developed by the tin industry organization International Tin Research Institute – ITRI,  to address the problem of minerals, mainly tin and tantalum, coming from militarized mines in the Democratic Republic of Congo.

Militarized mining has meant massive use of forced labor, widespread violence against workers and the population in general, continued abuses of human rights, and unending war.

ITRI says that “Phase  1”, implemented in July 2009, was “a comprehensive due diligence plan for tin minerals exported from the Democratic Republic of Congo (DRC).” It has now announced “Phase 2” of its policy, called ITRI Tin Supply Chain Initiative, iTSCi.

iTSCi would represent

the first practical field trial designed to address concerns over ‘conflict minerals’ from that region and has required significant commitment and funding, around US$600k, to be put in place in order to go ahead.

As I reported earlier, Phase 2 doesn’t seem to be commensurate to the dimensions and seriousness of the problem. At the same time it has the support of an impressive roster of heavy-weight downstream users of tin and tantalum in the electronics sector, such as Apple, Dell, HP, IBM, Intel, Lenovo, Microsoft, Motorola, Nokia, Nokia Siemens Networks, Philips, RIM, Sony, Telefonica, Western Digital and Xerox.

I asked Kay Nimmo, ITRI’s Manager of Sustainability and Regulatory Affairs, what has effectively been achieved with Phase 1. She answered  that Phase I

ensures all correct export permits and payments have been made, and means that all available official documentation is collected on every batch of mineral.

I also asked her why only a pilot trial in Phase 2 to address concerns over ‘conflict minerals’ in the Congo, when the problem is already well-known, demands urgent and effective responses, and ITRI has the backing of the most relevant end-users.

Nimmo said that

Phase 2, tracking to widespread and remote mines, is not a simple task and the pilot project is designed to check that the system is effective and make any necessary improvements before it is put in place more widely. The ICGLR (conference of the great lakes) aims for a full certification process in several years time; our project will contribute to that development, together with other projects which are starting now, such as one on mine standards run by the german organisation BGR. You can see from the project supporters list that all parts of the supply chain are combined in their wish to ensure the project is as successful as possible for the benefit of those in the DRC.

I have also contacted Annie Dunnebacke at Global Witness, an NGO that investigates and campaigns to prevent natural resource-related conflict and corruption. I wanted to know what she had seen in the region, on her last field trip last February, and how that related to the industry’s initiatives.

She told me that GW’s team

gathered documentary evidence (…) that some comptoirs [trading houses] implementing the ITRI scheme are currently sourcing from militarised zones. Our recent investigation also highlighted that the national army (mostly brigades commanded by former CNDP [Congrès National pour la Défense du Peuple] rebels) have taken over the majority of the mining sites in eastern Congo (with the exception of gold, much of which remains under FDLR [Forces Démocratiques de Libération du Rwanda] control).

This means, according to her view, that Phase 1 was only about

ensuring that comptoirs have their paperwork in order – licences, taxes, things they should have been doing by law anyway. It is not an accomplishment, it does not address the conflict minerals problem in any way and is merely belated compliance with basic elements of Congo’s laws.

However, other situations in which illegally extracted natural resources enter the supply-chain of large global corporations showed that compliance with the law is a prerequisite to any successful attempt at banning such products from regular markets.

Annie Dunnebacke’s stronger point is that if

the ITRI scheme does not cover the army – so it does not address the heart of the problem.

She also argues that

companies that source minerals from eastern DRC have a responsibility to make sure their supply chains are free of all materials from militarised mines right now, not at some point in the future. The violence associated with militarised mineral trade is not a future prospect, it is immediate and is costing lives. Any scheme that does not include regular field investigations and independent audits by companies is meaningless.

Kay Nimmo won’t debate with GW through the media, but says if the NGO wishes to make direct contact to “positively engage” and “make useful suggestions of their own”, they are welcome. She also says that engagement would allow GW to become more fully informed of ITRI’s endeavors to tackle the problem.

Annie Dunnebacke told me they have already made concrete corporate policy recommendations to individual companies like Apple or Nokia, such as

Publish credible evidence that the tin, tantalum and tungsten in their products is conflict-free:

Publish the identity of their suppliers of tin, tantalum and tungsten.

Contractually require suppliers to disclose the mine of origin for all tin, tantalum and tungsten from DRC or neighbouring countries.

Contractually require suppliers that source from DRC or neighbouring countries to publish written evidence of the comprehensive due diligence they have carried out on their supply chain to ensure that the minerals have not passed through the hands of armed groups or military units, benefited them in other ways or otherwise involved human rights abuses.

Conduct spot checks of their suppliers and commission and publish regular independent audits of their supply chain

“Blood minerals” and militarized conflict in African regions, like the Congo, are what conflict analysts call “an intractable problem”. Stopping the flow of income that enables conflicting groups to arm themselves is a prerequisite to start making it more tractable. Only large end-users of these “blood minerals” can stop that flow and help to create alternative sources of income to the local population. This is a clear case of strong correlation between sustainable development and corporate sustainability.

One cannot rely on governments of “failed states” to effectively address the suffering of their people. Only corporate action in concert with social movements seem to have the means to create small paths that with time, coherent commitment, and corporate social responsibility may really lead to state rebuilding and conflict resolution.

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