Over the past few years, companies, NGOs and governments increasingly have been concerned about “conflict minerals” from the eastern Democratic Republic of Congo (DRC) and the surrounding region. These materials—tin, tantalum, tungsten and gold whose extraction and trade can illegally contribute to armed groups in that region—move from the DRC into global supply chains. They may be included in a range of products, such as electronics, medical devices, canned goods, automobile engines and power plant turbines.
A variety of armed groups, including units of the Congolese military, local militias, and Congolese and Rwandan rebels, operate in the eastern provinces of the DRC despite the formal end of a civil war in the country in 2003. These groups engage in armed conflict and some of the world’s worst human rights violations. The UN’s special representative on sexual violence in conflict called the country the “rape capital of the world” in 2010. The International Rescue Committee also noted that ongoing fighting had caused more than 5.4 million deaths in the decade between 1998 and 2008, making it the world’s deadliest conflict since World War II.
The armed groups operating in this area often control or illegally tax the extraction and trade of minerals and other resources in the region. According to estimates from The Enough Project, an NGO focused on conflict minerals, the groups’ revenues from minerals may run into the hundreds of millions of dollars. Although no group is wholly dependent on this trade for funding, it makes up a significant portion of many groups’ income, and it is hoped that efforts to cut off this flow of funds will help reduce conflict. At the same time, the livelihoods of perhaps a million people in the region depend on the legitimate extraction and trade of minerals not taxed by the armed groups.
“There is a need to get a mineral chain of custody up and running, or there’s nothing else to talk about. Without a system of provenance, tracking systems won’t take hold in the DRC.”
ASSHETON CARTER, PACT’S SENIOR VICE PRESIDENT FOR GLOBAL ENGAGEMENT AND STRATEGY
DEMANDS FOR ACTION, AND COMPANY RESPONSES
Recognition of this link between the minerals trade and the financing of armed groups in the DRC has moved companies like GE to identify their use of potential conflict minerals and find ways to sever the link between these minerals and the armed groups. GE committed to act on this issue in the company’s 2010 Citizenship Report, one of several companies making similar commitments.
In mid-2010, the United States enacted a law requiring many companies to report publicly on their use of conflict minerals in the products they manufacture. GE’s first report, to be filed in 2014, will be based on its use of minerals beginning in 2013. The law will require companies to conduct an inquiry into the origin of tin, tantalum, tungsten and gold in their supply chains. If these supplies come from the DRC or surrounding region, or if their country of origin is uncertain, then companies will have to conduct a more thorough review of their supply chain in an attempt to determine whether the supplies support armed groups in the DRC.
GE and other companies are in the relatively early stages of developing and integrating conflict minerals programs within their supply chain processes. GE is identifying the sources of these minerals in its products and will work with its suppliers to minimize or eliminate the use of minerals that may support conflict in the DRC.
GE is working to apply the experience and infrastructure it has developed for other supply-chain social responsibility programs to address the conflict minerals issue. For example, an application developed by GE for environmental, health and safety data management, to support compliance with product reporting laws like the European Restriction of Hazardous Substances directive, may be adapted for supplier reporting on conflict minerals.
This ability to apply existing techniques and lessons will be critical to the rapid development and deployment of the supply chain conflict minerals effort. Sasha Lezhnev, who works with The Enough Project on the conflict minerals issue, emphasizes this point, noting that companies can learn from supply chain transparency and certification efforts of such organizations as the Fair Labor Association, Forestry Stewardship Council and the Kimberley Process for certifying conflict-free diamonds.
THE NEED FOR JOINT ACTION
At the same time that individual company policies and practices need to be developed to support supply chain transparency and reporting, an individual company—even one the size of GE—will not make a significant difference by acting alone. Motorola highlighted this issue in a recent Enough Project report, where company representatives were quoted as saying, “If the goal is to stop the flow of money to illegal armed groups then, like stopping the flow of water in a river, the dam must be built all the way across.” Companies with overlapping supply chains have greater influence over their suppliers when acting together, enabling them to encourage greater transparency and action. This has led to several industry initiatives, including a joint Electronics Industry Citizenship Coalition—Global e-Sustainability Initiative effort to verify conflict-free metals smelters, and the ITRI Tin Supply Chain Initiative (iTSCi), which is the only mine-to-smelter mineral traceability program currently operating in the region.
GE is working to support the EICC and GeSI program for verification of tungsten smelters. These industry programs are important steps, but critical work remains to be done to implement effective mineral tracing and certification. Pact, an NGO focused on local development in the DRC and elsewhere, along with the Enough Project and the industry efforts themselves, all highlight weaknesses in the verification of conflict-free minerals between mines and smelters that process the minerals.
SAYING “YES” TO CONFLICT-FREE DRC SOURCING
Pact also highlights the need to find something to say “Yes” to: “Everyone is saying ‘No’ to the DRC, but can we turn this into positive energy; can we find a way to say ‘Yes’ to a flow of conflict-free minerals from the DRC and ‘Yes’ to mining communities that want to make a living legitimately and safely? That’s our challenge,” says Carter.
This need is also highlighted in a set of multi-stakeholder recommendations for the new U.S. reporting requirements, which GE helped develop along with over 20 other companies, NGOs and investor organizations. The recommendations emphasize the need for incentives for companies to source verifiably conflict-free minerals from the DRC and surrounding region, both to encourage the production of conflict-free minerals and to discourage the possibility of a de facto embargo that could harm local economies and livelihoods in the DRC and surrounding countries.
FOCUS ON SUPPLY CHAIN EFFORTS
The root causes of conflict in the DRC run deeper than a focus on mineral extraction for financial gain and include issues of land tenure, weak governance and a need for local economic development. There may be opportunities for companies to help address some of these issues by supporting local development programs and encouraging appropriate government efforts. However, representatives from Pact, the Enough Project and others note that companies first need to focus on tracing the minerals in their supply chains, verifying that they are conflict free, and supporting conflict-free sourcing from the DRC and surrounding region. These are the areas where companies have the most influence and ability to have an impact.