Implications for the electronics industry of human rights violations in the Democratic Republic of the Congo
The road from Kinshasa International Airport to the capital was as sluggish as an artery before a quadruple bypass.
As the hours passed and the taxi inched slowly along the fifteen-mile journey to our hotel, we started to ponder whether it might actually have been faster to walk.
Like the journey from the airport that day in May, progress on the issue of conflict minerals in the Democratic Republic of the Congo (DRC) has taken a long time to travel a short way.
As supply chains go increasingly global, we rarely stop to ask the human costs of producing a smart-phone or other advanced electronic device. In the DRC, the use of coltan, a contraction of columbite and tantalite, and its derivative tantalum, to make capacitors for electronic goods becomes a problem when its sale funds a civil war and the social impact on the local population includes death, violence, rape, poor labor conditions and the breakdown of family units.
The battles have been raging for almost twenty years and are funded, in large part, by the militias’ control of mineral deposits, whether directly, or through taxing and exploiting artisanal miners and local populations.
Artisanal mining is best described as basic. Small teams with primitive tools clear some jungle, dig into the soil and extract whatever minerals they find close to the surface. Through an informal market, minerals are then sold on to middlemen and make their way along precarious routes, through multiple palms greased with taxes and bribes.
In January this year, the UN Group of Experts published its final report on the DRC. It found that, while initiatives by the OECD and the International Conference on the Great Lakes Region have advanced mining sites’ validation and improved adherence to conflict-free and international human rights standards, armed groups continue to control many mining sites and to profit from the minerals trade.
The UN Experts’ Final Report found that tantalum (along with tin and tungsten) continues to be smuggled from eastern DRC through neighboring countries, undermining confidence in international certification and traceability mechanisms.
Baudouin K. Hamuli is the National Coordinator for the International Conference on the Great Lakes Region¬ (ICGLR). In this role, he chairs the committee of national experts that advises the Government on peace in the Eastern part of the country. Hamuli says “Coltan is part of the economy of war in Eastern DRC. The way coltan has been exploited to date shows very little respect for human rights”.
In Eastern DRC, at least five million people have died in the recent conflicts, of whom it is estimated around 40 percent were women and children. Recruitment of children as soldiers has been systematic, along with widespread sexual violence as a weapon of war. The warfare is complex and ever changing, with an intricate web of rebel and government-backed militias in combat with each other.
The United States Congress has recognized that the “exploitation and trade of conflict minerals originating in the [DRC] is helping to finance conflict characterized by extreme levels of violence in the Eastern [DRC], particularly sexual and gender-based violence”.
In an attempt to address these severe human rights violations, in 2010 Congress enacted section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It requires regulated entities to disclose to the Securities and Exchange Commission (SEC) whether any of their products contain conflict minerals originating from the DRC.
Where products do contain DRC conflict minerals, public companies must submit a report to the SEC disclosing the source and chain of custody of the minerals. [The Dodd-Frank Act defines conflict minerals as the ores columbite-tantalite (coltan), cassiterite, and wolframite from which, respectively, tantalum, tin, and tungsten are derived. Gold is also defined as a conflict mineral].
The first disclosure reports under the Dodd-Frank provisions were due on 2 June 2014 and coincided with our trip to Kinshasa.
According to Oren Ben-Zeev, a consultant with PricewaterhouseCoopers who assists companies to comply with the disclosure process, the chain of custody of conflict minerals is difficult to establish.
Ben-Zeev states, “identifying the 'chain of custody' between the origin of the minerals and the finished products into which they are incorporated, compounds in difficulty for every supplier tier between the smelter and the reporting company. At the end of the day, companies that are far downstream cannot conclusively determine the smelters in their supply chain."
These difficulties are borne out by a number of U.S. Government Accountability Office (GAO) reports. Under section 1502 of the Dodd-Frank Act, the Department of Commerce was required to compile a list of all known conflict-processing facilities worldwide by January 2013. According to most experts, smelters and refiners are the main “choke point” of the conflict mineral supply chain. Thus, an accurate list of smelters would be extremely useful in determining conflict mineral sourcing.
However, Commerce has had many issues in creating a consolidated list. For example, out of 278 conflict mineral smelters identified, 82 were located in China, so data on these smelters are largely inaccessible to the U.S. government. Also, conflict mineral smelting operations are highly mobile, and often in remote and unsafe areas. Commerce has stated that a consolidated list will be created by September 1, 2014.
Though the Commerce smelter list has been delayed, headway has been made to create independently verified conflict-free supply chains. For example, many major tech firms including Apple, Hewlett-Packard, and Intel are members of the industry-led Conflict Free Smelter Program. This program identifies smelters that are conflict free according to the concepts of the Organization for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and Section 1502 of Dodd-Frank. Over 85 smelters have been identified as conflict free as of April 2014.
Only five months after the DoddFrank provisions were signed into federal law by President Obama in July 2010, the International Conference for the Great Lakes Region in the DRC introduced its own conflict minerals certification scheme for the great lakes region. This means that all coltan and other conflict minerals that leave the DRC must now be accompanied by a certificate that recognizes their bona-fides.
The first certificate was issued to a mine in Rwanda in November 2013. However, the DRC has been slow to certify its mines and harmonization of laws across countries in the region has been another hurdle to overcome. The remoteness of Eastern DRC and the sheer number of mines (estimated at over 2,000) makes it difficult for DRC mine officials to ensure that mines have not been overrun by armed groups. Lack of infrastructure prevents the development of proper economies of scale and impedes transparency.
But, despite these significant obstacles, Mr Hamuli remains steadfast in his commitment to the task. “Formalization of the artisanal sector will bring miners into the economy, thus unlocking financial opportunities for people to improve their lives. Currently, lack of regulation of artisanal mining is causing misery,” he said.
Conflict minerals are essential components in all advanced electronic devices. There is little we, as consumers, can do to change this. But we can vote with our wallets to support those tech companies that demonstrate their commitment to implementing comprehensive due diligences processes in their supply chains.
The Fairphone initiative, based in Amsterdam, offers the first conflict mineral free smart phone, and Intel now manufactures a conflict mineral free microprocessor. Raise Hope for Congo, a campaign of NGO the Enough Project, ranks electronics companies based on their actions to contribute to a clean minerals trade in the DRC.
Next time you reach for your smart phone or tablet, perhaps it’s worth considering what your response will be.
Alex Newton is an Adjunct Lecturer in Business and Human Rights at the Australian National University; Jude Soundar is a Major in the United States Army Reserve and a Fellow in the Truman National Security Project.Conflict minerals Demoncratic Republic of Congo mobile devices mobile phones traceability