Nº 7 2012 > Conflict minerals in the ICT supply chain
Conflict minerals in the ICT supply chain
Environmental due diligence needed in the African Great Lakes region
To produce a glittering array of high-tech devices — from smartphones to laptops — the information and communication technology (ICT) industry needs minerals. Tin, tantalum, tungsten and gold are among those used in many ICT products, with the ICT industry consuming 50 to 60 per cent of the world’s tantalum, close to 26 per cent of its tin, and 9 per cent of the gold mined each year. One of the large sources of these minerals (particularly tin, tantalum and tungsten) is the Great Lakes region of Africa and, in particular, the Democratic Republic of the Congo. Both artisanal and industrial mining of these minerals is taking place in the heart of two important ecosystems: the Congo Basin and the Albertine Rift.
“Mineral resources are at the beginning of the ICT supply chain, and much of the current output of tin, tantalum, tungsten and gold comes from artisanal and small-scale mining. A thriving and sustainable supply chain for these minerals can provide livelihoods for many local people. But if existing regulations are not enforced, and production, transport and trade of the minerals are mismanaged, then the result can be socio-economic and environmental instability,” explains Ruediger Kuehr of the United Nations University (UNU).
Mining prospectors and investors of all kinds compete for these minerals. The ICT supply chain for tin, tantalum, tungsten and gold is complex because minerals change hands as many as seven times as they are processed into metals and then ICT products. In some areas of the African Great Lakes region, these minerals are mined with informal or no methods of traceability, making it a challenge to determine their source. This has led to the origin of all minerals from this region being considered suspect, and to the media and non-governmental organizations referring to tin, tantalum, tungsten and gold from the African Great Lakes region as “conflict minerals”.
Early campaigning by non-governmental organizations raised concerns about the devastating effects that artisanal and small-scale mining was having on critical ecosystems and irreplaceable flora and fauna. Today, the conflict minerals narrative focuses on human rights concerns. It would, however, be short sighted to overlook safeguards to protect ecological resilience when creating and expanding supply chains to meet the needs of the ICT industry.
A new report “Greening ICT supply chains — Survey on conflict minerals due diligence initiatives”, by a team of authors led by Estelle Levin (Estelle Levin Ltd) and comprising Cristina Villegas and Ruby Weinberg (Estelle Levin Ltd), Cristina Bueti (ITU), John Smiciklas (MJRD Assessment Inc.) and Ruediger Kuehr of UNU, reviews the various due diligence initiatives relating to conflict minerals, and looks at the way the ICT industry is managing its supply chain in that context. They see the need for leadership to ensure that the environmental dimension of sustainability is not neglected in the ICT supply chain.
Due diligence initiatives by governments
The International Conference on the Great Lakes Region is an intergovernmental organization made up of the signatory States belonging to the Great Lakes region of Central Africa, including the Democratic Republic of the Congo, Rwanda, Burundi, Uganda, Tanzania, Sudan, Republic of Congo, Central African Republic, Zambia, Kenya and Angola. The group was formed in 2000 and originally focused on preventing illegal cross-border smuggling of minerals, timber and other natural resources. In 2006, the Heads of State of the member countries agreed to combat the illegal exploitation of natural resources, with each State agreeing to specific actions it would take to that effect. Four years later, the Heads of State met again and, in signing the Lusaka Declaration, agreed to develop six tools to deal specifically with the illegal exploitation of natural resources. These tools are: a regional certification mechanism for conflict minerals; harmonization of national legislation in and across member States; a regional database on mineral flows; formalization of artisanal and small-scale mining; promotion of the Extractive Industries Transparency Initiative within the region; and a whistle-blowing mechanism. The regional certification mechanism currently incorporates the monitoring of environmental management. It is expected that the monitoring data collected will eventually be used to bring to book economic actors guilty of environmental mismanagement.
Apart from the regional certification mechanism agreed on by the International Conference on the Great Lakes Region, there are at present only two international initiatives that focus on managing environmental concerns: a standard for artisanal and small-scale mining of gold and other precious metals, set by the Alliance for Responsible Mining and Fairtrade International, and the Code of Practices and Chain-of-Custody Standard established by the Responsible Jewellery Council.
Many ICT companies have disengaged from the mining sector in the Democratic Republic of the Congo to avoid the risk of conflict minerals entering their supply chains and triggering negative consumer or government reactions. In response, the central and provincial authorities of the Democratic Republic of the Congo are pushing hard to create the conditions for a legal minerals trade, in order to encourage international buyers to re-engage in the sector. These efforts include the creation of new legislation, policies and coordinating bodies.
An effort by the United Kingdom Department for International Development, the World Bank and the Government of the Democratic Republic of the Congo, known as the Growth with Governance in the Mineral Sector (PROMINES) project, is the only project that deals directly with the environment.
The European Union is assisting the Government of the Democratic Republic of the Congo through an international task force, established in 2009. Support from the United States through USAID includes the Public-Private Alliance for Responsible Minerals Trade. The European Commission has revised its Transparency and Accounting Directives, and Canada has introduced a bill aimed at stemming the conflict minerals trade in the Democratic Republic of the Congo. But none of these initiatives focus on the environment.
ICT industry response
Individual ICT company responses to the growing public and regulatory awareness of the problems with supply chains in the Democratic Republic of the Congo have varied. Some companies are working to improve transparency in their supply chains, with certain companies acting as leaders on conflict minerals for the industry. Others are resorting to the defensive, but less sustainable response of disengagement. Of these, many are simply boycotting the African Great Lakes region as the simplest way to be able to report that their minerals are conflict-free.
ICT companies are progressively improving their supply chains in various ways. For example Dell, Cisco, Ericsson, Hewlett-Packard, Philips, Intel, Motorola and Nokia are visiting smelters. Companies such as Hitachi are working with suppliers to improve transparency. Hewlett-Packard and Intel, among others, publish lists of their suppliers.
The Enough Project has reported that some companies are taking extra steps. For example, Intel has “demonstrated leadership on supply chain investigations”, Microsoft is “pioneering an internal audit system on conflict minerals”, Nokia has required “suppliers to map their supply chains”, and Acer “requires its suppliers to trace minerals back to their origin”.
An ethical and sustainable mining industry in the Democratic Republic of the Congo would benefit large segments of the population. This is something that Motorola Solutions is attempting to show through its Solutions for Hope project for a closed supply chain of responsibly sourced minerals. For the pilot project, Motorola Solutions shortened its supply chain for tantalum to include only the mine operator (a mining cooperative), a smelter, a components manufacturer (AVX) and the company itself. In this way, Motorola Solutions is creating an opportunity for market differentiation as an ethical brand offering consumers a conflict-free option. In March 2012, AVX published a press release saying that it had “delivered its first conflict-free capacitors to Motorola”.
While admitting that it cannot verify the origin of all the minerals in its products, Intel is progressively implementing controls focused on driving accountability and ownership within its supply chain through smelter reviews and validation audits. The company states that it has completed “on-site reviews of over 40 smelters in many countries, representing all four conflict minerals”. Intel is working in partnership with various different entities, including AVX and the Solutions for Hope project.
Opportunity for environmental leadership
Current international concern in regard to supply chains originating from the African Great Lakes region is focused on conflict and human rights aspects, rather than environmental impact. Similarly, ICT companies are not, in general, looking at the environmental dimension of sustainability. This opens up an opportunity for ITU, together with its partners in the United Nations system, to provide leadership in closing this gap.
The report outlines many initiatives that are aimed at providing the ICT sector with guidance and monitoring tools to conduct due diligence on their supply chains to ensure that their sourcing of tin, tantalum, tungsten and gold does not contribute to conflict and human rights violations. Some of these initiatives are operational; some are still in development. But their treatment of the environment is weak.
“Should the ICT sector wish to expand the due diligence imperative to cover environmental sustainability issues in the artisanal and small-scale mining sector, then existing initiatives — as they are currently operating — are inadequate in terms of geographical coverage and sustainability performance levels and support to those that are willing to expand their scope is called for,” underline Estelle Levin, Cristina Villegas and Ruby Weinberg (Estelle Levin Ltd). But first, the following questions will need to be answered. Is it feasible to integrate the environmental sustainability dimension into existing protection? And will stakeholders and the conflict mineral initiatives support such an action?
Study Group 5 of the ITU Telecommunication Standardization Sector (ITU–T) deals with “Environment and Climate Change”. It is addressing the specific question of “Environmental protection and recycling of ICT equipment/facilities” (Question 21/5). As part of that work, ITU–T Study Group 5 is considering the development of due diligence guidelines for metals supply. And as part of its mandate, this study group will identify current work on due diligence requirements around conflict minerals, and the other forums in which that topic is being debated. It will investigate how the output produced by these actors could be standardized. It will also identify all stakeholders, and see how those stakeholders not currently involved in due diligence work or forums (in particular, developing countries) can be brought into the process. The study will need to understand the complexity of metals supply chains and the management of environmental risks. Among the areas of focus will be the supply chain, extraction, site restoration, administrative interventions (taxes and royalties), media and publicity, and mitigation of fraud and conflicts.