At the end of this month, Intel, HP and other companies are expected to report to the US Securities and Exchange Commission to disclose information on whether the minerals used in their electronic products were sourced from mines which support the funding of armed conflict in Central Africa. Obama-era legislation requires businesses to reveal supply chain information. The United States passed legislation in 2010, known as the Dodd Frank Act Section 1502, which requires responsible sourcing of minerals. US-based companies must conduct due diligence on minerals sourced from the Democratic Republic of Congo (DRC) and neighbouring African nations. This is to ensure their products do not contain conflict minerals. The Trump administration, however, has considered repelling the Dodd Frank Act.
The trade of conflict minerals are often sourced from conditions of exploitation, violence and modern slavery, including child labour. Over the past few decades, the mineral trade has funded violence and armed conflict around the world. At present, resources from high-risk, conflict areas, such as Afghanistan, Colombia, DRC, and Zimbabwe, are used to fund armed militia groups and human rights violations, with miners often experiencing dangerous working conditions. Environmentally, the irresponsible and unsustainable production of minerals causes deforestation and water pollution, which inevitably impacts the health and livelihoods of local populations, affecting drinking water and crops.
Globally there is a high demand for tin, tungsten and coltan (tantalum is produced from coltan), collectively known as the ‘3Ts’. These minerals are used as components in consumer products, such as mobile phones, laptops and jewellery. Most of these minerals are concentrated in eastern DRC. The mineral trade has partially funded a decade-long conflict in eastern DRC, which has led to the displacement, murder and rape of civilians. Armed groups control territory and mines which allows them to finance conflict and the purchase of weapons through the sale of rare minerals. The 3Ts are sourced from small-scale, non-industrial, community mines which are easy for militias to exploit without intervention.
International legislation aims to prevent conflict minerals from entering the global market. However, resources are smuggled and can enter global supply chains, ending up in electronic products. Due to a lack of transparency, it is difficult for consumers to determine if their products are sourced from conflict minerals. Some of the world’s most well-known brands and tech companies have come under scrutiny to address their role in this trade. Tainted tungsten, tin, tantalum, as well as gold, enter the supply chains of tech firms. American companies rely on ‘bag-and-tag’ systems to ensure minerals they source from DRC are conflict-free, however, minerals are often fraudulently tagged.
As a result, even with legislation in place, minerals sourced from conflict areas are still exported or smuggled across Congo’s insecure borders. Minerals are often fraudulently packaged and tagged as ‘conflict free’ and sold to exporters. The Congolese government has attempted to target smuggling and illegally tagged minerals, however, their anti-fraud office is underfunded and understaffed. The government also lacks adequate resources to effectively monitor ‘négociants‘, which are middlemen who purchase minerals from community mines to sell to exporters in cities. And government monitoring officers who sometimes participate in the illegal activities of the mining industry further exacerbate monitoring problems. Furthermore, existing legislation does not account for the trade of conflict minerals outside of DRC, despite the ‘extreme risk’ that tin, tungsten, tantalum and gold mined in Colombia, Peru and Myanmar present in relation to human rights violations.
In the case of gold, it can be mined, refined and smuggled with ease, therefore it is an easy target for armed groups. An ongoing civil war in CAR has created political instability, which has facilitated the illegal smuggling of the mineral. Today, many claim the mineral trade is linked to government corruption and political instability in the Central African Republic (CAR), from which an estimated two tonnes of gold is smuggled each year.
Several companies are overlooking risks and human rights violations posed by 3T minerals which occur outside of the DRC. This was reiterated by Stefan Sabo-Walsh, Director of Commodities Research at Verisk Maplecroft, saying that “US supply chain legislation on mandatory reporting and traceability has focused on 3TG minerals from the Great Lakes. This can leave tech firms focused on one region despite the myriad of risks occurring elsewhere in their supply chains.”
Conflict-free mining legislation has failed to address human rights violations in the war-torn, underdeveloped region of eastern DRC. Since the Dodd Frank Act was implemented, militias have proliferated and gained more control over territories, making it difficult to monitor mining sites. As well, miners continue to work in poor conditions due to the lack of investment in tools and infrastructure. There have been no real improvements due to legislation. It is unable to prevent minerals from mines controlled by militias from infiltrating the global market.
The intention of the DRC legislation was to improve mining standards and the lives of local populations. It has been largely unfulfilled. When the law was enacted, the main focus was on increasing investment to fulfill legal duties, and appealing to consumers, rather than improving the lives of people in eastern Congo. The monitoring of minerals has been utilized as a simple solution for more complex, unmanageable issues such as poor governance, but also the world’s growing appetite for minerals. It was a solution heavily invested by the tech industry and the US government; their incentive is to continue the flow of minerals into the market.
The UN Guiding Principles for Business and Human Rights (UNGPs) recommends due diligence as an effective way for companies to assure the responsible supply chain management of minerals. Businesses need to act by responsibly sourcing minerals for their products to avoid funding conflict and human rights abuses. Companies must review their supply chains to ensure the prevention of conflict minerals from entering the global market. It is necessary to conduct ‘risk-based due diligence’ which requires assessing supply chains for any potential harmful risks that may be funded through their activities.
Companies must commit to due diligence by publicly reporting risks and mitigation to show consumers, communities and investors that they are willing to source responsibly and in a sustainable way. This will then lead to improved transparency and accountability. It is also worth noting that most due diligence conducted occurs externally in factories that extract minerals from the mined ore. As such, a more credible approach would involve working directly at mining sites to improve conditions.
Due to due diligence, companies and advocacy organizations must consult with Congolese and other mining communities to develop a policy agenda which considers the needs of local people and grants them decision making power. An improved advocacy approach should focus on alleviating labour and human rights issues, rather than ensuring products are conflict free. Responsible sourcing of minerals should not mean imposing trade bans; it needs to ensure companies are not perpetuating violence and human rights violations.
On the other hand, mineral wealth needs to be utilized to fund the development and benefit people in affected nations instead of funding conflict. Natural resource trade can provide a source of development and improve the precarious livelihoods of vulnerable populations. This importance of community investment has been emphasized by Peter Nicholls, CEO of Walk Free’s Global Business Authentication, when he said that “companies together commit to due diligence, by sharing information and ideas… creates new business opportunities in many of the regions that need sustainable and responsible investment the most.”
Similarly, the goals and issues facing multinational corporations and ethical consumers are not identical to those faced by underdeveloped, war-torn countries. As a result, it is difficult for companies to navigate the unstable political and human rights landscapes of Central African nations. For example, last year Apple pledged to end its reliance on mined materials. In the future, they hope to only produce products made from renewable or recycled resources.