Conflict minerals
Conflict minerals refer to raw materials sourced from regions experiencing armed conflict, often financing violent groups while perpetuating human rights abuses. Predominantly found in the Democratic Republic of the Congo (DRC), key conflict minerals include gold, tin, tantalum, and tungsten, collectively known as the "three Ts." These minerals are crucial for the production of electronic devices, making their supply chains complex and challenging to monitor. In recent years, international organizations, governments, and industry stakeholders have made efforts to promote transparency in the sourcing of these minerals.
The establishment of due diligence guidelines aimed to ensure that companies could verify that their mineral supplies did not contribute to ongoing conflicts in the DRC. In the United States, legislation has mandated that publicly traded companies report the sources of their minerals, particularly if derived from conflict-prone areas. While some businesses have successfully adapted to these regulations, concerns remain about the potential withdrawal of foreign investment from the DRC, which could exacerbate instability. Despite initiatives to improve accountability and working conditions, issues such as smuggling and fraudulent tagging persist, highlighting the ongoing challenges in addressing the conflict mineral situation.
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Conflict minerals
Conflict minerals are raw minerals that derive from areas of armed conflict and financially support parties to those conflicts, often in developing nations. In the early twenty-first century, concerns arose regarding the potential use of conflict minerals such as tungsten and tantalum in electronics, as demand for computers and handheld devices soared in industrialized nations. In the opening decades of the twenty-first century, the United Nations, governments of some industrialized nations, nongovernmental organizations, and industry leaders undertook efforts to institute and enforce transparency in the supply chains for these minerals.
Overview
In the early 2000s, the primary conflict minerals are gold and the relatively rare metals tin, tantalum, and tungsten, or the “three Ts.” The three Ts in particular are necessary for the manufacture of batteries and capacitors used in electronic devices. Gold and three-T precursors—cassiterite, columbite-tantalite (or “coltan”), and wolframite—are naturally abundant in the Democratic Republic of the Congo (DRC), where mining and mineral distribution is often controlled by and helps to fund paramilitary and corrupt military groups, which have been implicated in widespread killings and rape as a weapon of war since the late 1990s. Much of the mineral extraction there is believed to be performed by children or enslaved workers.
Supply chains for modern technological equipment are quite complex. Suppliers are chosen independently at each level. Major technology companies do not deal directly with the miners but rather buy from components manufacturers, who source their metals after the extraction and refining have been done. Refiners and smelters typically aggregate and melt down metal supplies mined from numerous sources, complicating efforts to determine which metals came from which mines and whether those mines were controlled by armed groups. Such groups exploit the opacity of the process, often smuggling raw materials through neighboring countries in order to circumvent the rudimentary tagging system currently used by smelters to identify the minerals’ origins.
Between 2009 and 2011, the United Nations (UN) Security Council, Organisation for Economic Co-operation and Development (OECD), and International Conference on the Great Lakes Region worked with multinational corporations and industry associations to craft due diligence guidelines for sourcing minerals from areas of armed conflict.
In the United States, Congress incorporated the proposed Conflict Minerals Trade Act into the Dodd-Frank Wall Street Reform and Consumer Protect Act of 2010. Under that provision, publicly traded US companies must verify and report on the sources of the minerals used in their products to the Securities and Exchange Commission (SEC). If a company’s mineral supplies originate from one of ten designated Central African countries, the company must perform “due diligence” to ensure that the extraction sites and chain of custody are “DRC conflict free”—that is, not connected to the chronic state of conflict in the Democratic Republic of the Congo. In 2012 the SEC endorsed the finalized OECD guidelines as its standard for due diligence. As of 2013, Canada and the European Commission were both considering conflict-free legislation of their own.
Reaction to the SEC rule was mixed. While some hailed the measure as a positive if limited step, critics within the technology industry warned that the implementation costs were too great and that the convoluted supply chains and the shifting DRC political situation made accurate auditing exceedingly difficult. Humanitarian activists expressed concern that American businesses would withdraw from the DRC completely, rather than seek out conflict-free mining operations, which would increase instability within the DRC. National industry groups such as the US Chamber of Commerce challenged the law, but in July 2013 a federal district court upheld the SEC rule.
Although some companies did switch to suppliers in other countries, many have worked to comply with the new rule and multinational guidelines. From mid-2011 through 2012, more than one hundred companies participated in an OECD-led pilot program for due diligence in sourcing three-T minerals from the DRC. In May 2013, the OECD launched a similar program for the gold trade. Industry-led initiatives such as Solutions for Hope, which established a closed-pipe supply line, and the Conflict-Free Tin Initiative, which created a vertically integrated system, appear to be making progress toward making supply chains traceable and accountable, improving working conditions for miners, and stabilizing the DCR’s economy. Nonetheless, UN reports indicate that problems such as smuggling and tagging fraud continue.
Bibliography
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