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Anti-conflict mineral initiatives and the green-washing phenomenon

Anti-conflict mineral initiatives and the green-washing phenomenon

January 16, 2014, by Yolande Kyngdon-McKay

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In March 2013, I spent several weeks working at the headquarters of Not For Sale, a California-based NGO that seeks to combat modern slavery around the world. According to the U.S. Department of State, the term modern slavery covers practices including forced and bonded labour, debt bondage and forced child labour. These abuses occur in many different industries, including apparel, electronics, jewellery and food. I was the lead author of Not For Sale’s Electronics Report [i], which examined the supply chains of 29 of the world’s leading electronics brands to assess their efforts to protect the labour and human rights of upstream workers. It’s Not For Sale’s belief that brands that are proactive in the protection of such workers’ rights are less likely to sell products that are tainted by modern slavery.

The electronics industry is a large consumer of extractives; for example, in 2011 it was the end-user of 9% of the world’s (primary and secondary produced) aluminum, 23% of its copper, 24% of its silver, and 5% of its gold. In researching the Electronics Report with my team, I was particularly interested in what electronics brands were doing to explore their supply chains at the raw material and processing levels, namely mining, and smelting and refining. Extractives supply chains are often highly complex, and the amalgamation of materials from multiple locations in the smelting process makes tracing (and tracking) specific materials problematic. The opacity that often surrounds the extractives sector, particularly the commodities with a notable informal artisanal and small-scale mining (ASM) component, is also well documented. At the outset we assumed that electronics brands that sought to trace and assess their suppliers at the raw material and processing levels would be outliers in the industry, given these challenges.

What our research uncovered though was that more than half of the analysed electronics brands were involved in initiatives that aimed to trace suppliers to the stage of extraction, or smelting and refining. These initiatives were, however, focused exclusively on uncovering the use of conflict minerals by these suppliers. Conflict minerals originate from regions in which a recognized conflict is occurring. At the time of writing, the most prominent source of conflict minerals is the eastern region of the Democratic Republic of Congo (DRC), which has been home to the nation’s second civil war for over 15 years. The minerals known to be funding this war include gold, tungsten, tin and tantalum (known as 3TG). They are all frequently used in the electronics industry: gold is a non-corrosive conductor used in electrical wiring; tin is often used in soldering; tungsten is a key component of circuitry; and tantalum is common in electronic capacitors.

The anti-conflict mineral program used most often by the analysed electronics brands was the Conflict-Free Sourcing Initiative, created by the Electronics Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI). The Conflict-Free Sourcing Initiative (CFSI) provides a range of tools and resources to companies seeking to make informed choices about conflict minerals in their supply chains, including the Conflict-Free Smelter Program and the Conflict Minerals Reporting Template. The Conflict-Free Smelter Program examines participating mineral smelters and refiners to determine if they can be classified as ‘conflict free’. This classification is based on third party audits that evaluate the measures being taken by mineral smelters and refiners to ensure they do not buy or process minerals that originate in recognised conflict regions (namely, the abovementioned DRC and adjoining countries). Companies that wish to avoid minerals that contribute to conflict can buy from smelters and refiners that have been validated as conflict-free under the terms of the CFSP audit. The Conflict Minerals Reporting Template is a survey that companies can ask their suppliers to complete to determine whether they take suitable precautions to avoid using conflict minerals. It is designed to foster greater intra-firm awareness of supply chains, which assists firms with their own due diligence regarding conflict minerals.

This focus on conflict minerals in the raw materials and processing levels of the electronics supply chains is both positive and negative. The problem of conflict minerals is real for any industry that relies on extractives, including electronics. The role of minerals in fuelling and prolonging bloody and protracted conflicts is evidenced throughout recent history, including in the abovementioned DRC and in the diamond-fuelled civil wars of Angola and Sierra Leone in the 1990s and early 2000s. The existence of initiatives that seek to limit the trade of conflict minerals is therefore important. (The harm that can be caused to innocent members of the ASM sector by such initiatives must also be recognized, however this topic is beyond the scope of this discussion and is deserved of its own separate analysis).[ii] Nonetheless, the failure of any of the analysed electronics brands to go beyond investigating suppliers’ use of conflict minerals at these levels of their supply chains is notable.

Several questions emerge: Are companies, both within the electronics industry and without, overly invested in the issue of conflict minerals at the cost of other problems in their supply chains, such as labour rights abuses and environmental degradation, which are particularly prevalent in the ASM sector? Why could this be so? Furthermore, considering the (relative) prevalence of anti-conflict mineral initiatives and the (comparative) ease with which they are adopted, is there an argument to be made that hopping onto the anti-conflict mineral bandwagon is an easy way for brands to ‘green-wash’ their supply chains?

I’m not going to attempt to definitively answer these questions in this blog, as I don’t assume to have all of the answers and I certainly don’t have the required word limit. However, they are questions that deserve a little fleshing out.

In relation to the first question, the findings made by my Not For Sale research team and I suggest that the biggest concern of many brands in the electronics industry is their suppliers’ association with conflict minerals (at the raw material and processing levels). Other important issues, such as the use of child labour by suppliers, are not commonly investigated by brands this far upstream (although child labour is an issue that the OECD expects companies to do due diligence on and manage in their ‘conflict minerals’ supply chains).[iii] It’s also important to note that supply chains in the electronics industry are highly complex, with many brands using tens of thousands of suppliers. While we found that several electronics brands expected their suppliers to abide by codes of conduct that prohibit labour rights abuses, these codes typically extended only to component and final product manufacturers with whom the brands have closer relationships. This suggests that the relative proximity of such suppliers is relevant to brands’ capacity to demand code of conduct compliance.

Such an overriding focus on conflict minerals is not unique to the electronics industry. Another clear example is the diamond industry, whose widely adopted Kimberley Process Certification Scheme is strictly limited to combatting the trade of conflict diamonds. This palpably narrow mandate has recently seen its governing body, the Kimberley Process (KP), heavily criticized by various stakeholders for its refusal to consider human rights abuses when certifying diamond-producing states, such as Zimbabwe. That reports have repeatedly demonstrated how members of Zimbabwe’s ASM sector have been murdered or abused by government agents has done nothing to alter the KP’s position that its role is to prevent civil conflict only, and other types of conflict and violence are outside of its scope.[iv]

What is undoubtedly a contributing factor to the focus on conflict minerals is the inclusion of anti-conflict mineral legislation in the Security and Exchange Commission’s (SEC) recently introduced Dodd-Frank Reform Act (Section 1502). This requires companies that use tin, tungsten, tantalum and gold (3TG) to take reasonable measures to ensure they have not originated in recognised conflict areas, which is defined by the SEC as the DRC and adjoining countries. If a company finds that its supply chain is tainted by conflict minerals, it is legally required to inform the SEC. This legal imperative brings to mind the old adage ‘that which gets measured gets done’.

The findings of Not For Sale’s Electronics Report suggest that when companies focus primarily on the conflict mineral issue, other concerns in the raw materials and processing levels of their supply chains are neglected. Besides the associated legal requirements, why does the conflict mineral issue receive so much attention relative to other problems in the extractives sector? There’s unlikely to be a single reason for this.

While there are initiatives and certification schemes that either directly or indirectly condemn human and labour rights abuses in the extractives sector, such as the abovementioned OECD supply chain policies, and the codes of conduct of the EICC and the Responsible Jewellery Council (schemes which are both voluntary), they have nowhere near the penetration rate of anti-conflict mineral programs in the relevant industries, nor have they attracted the same legal imperatives to their adoption and observation. Moreover, signing an industry standard that discourages or prohibits such violations in your supply chain is one thing, however actually tracing and investigating your supply chain to determine if these practices are occurring is an entirely different kettle of fish; the former can be purely symbolic, if adopted cynically, while the latter requires a proactive approach to uncovering and disincentivising these abuses in your supply chain.

The current corporate interest in avoiding conflict minerals could also be traced back to the groundbreaking anti-conflict diamond campaigns launched by Human Rights Watch and Global Witness in the mid-to-late 1990s. These campaigns showed the world for the first time that De Beers, then the world’s largest diamond mining, marketing and exploration company, was knowingly helping to fund the brutal civil war in Angola by buying the conflict diamonds emanating out of the state. The subsequent public backlash was significant, emulating the Nike sweatshop and Nestle baby formula protests of the same era. It could be argued that the repercussions experienced by the diamond industry, and De Beers’ enduring inability to divorce itself from its past wrongdoings, have encouraged companies nowadays to demonstrate a proactive avoidance of conflict minerals. This argument is supported by the reality that there is yet to be a comparable campaign that shocks the world into railing in a similar fashion against other serious problems in the extractives industry, including forced and child labour, indentured servitude and environmental degradation.

In terms of the significance of general awareness about conflict minerals versus other problems in the extractives sector, stories about conflict minerals tend to receive the most media coverage. This is particularly the case when celebrities such as Naomi Campbell and Leonardo DiCaprio enter the narrative. When these issues are widely reported, social media can quickly educate and mobilise vast numbers of people, which can eventually force governments and industries to take note of society’s resultant protests.[v] If other issues don’t receive the same kind of media coverage, it’s less likely that they will inspire comparable campaigns. Another possible reason for the focus on conflict minerals is their possession of relatively tangible parameters. Recognised conflicts occur in specific locations. This, in theory, makes rendering a supply chain ‘conflict-free’ a far simpler undertaking than making it child labour or slavery free, which are practices that occur in many different locations around the world, and at many different stages of a typical supply chain.

This brings me to my third question: Do anti-conflict mineral initiatives offer a ‘easy’ way for brands to ‘green-wash’ their supply chains, despite the myriad of different problems therein? The term ‘green-washing’ typically refers to brands’ efforts to make their products appear more environmentally friendly when they actually are not. The term can also encapsulate brands’ efforts to make their supply chains appear more ‘ethical’, which is the manner in which I’m using the term. I’m not arguing that avoiding conflict minerals does not make a supply chain more ethical. However, it may be true that engagement in anti-conflict mineral initiatives provides a convenient ‘halo effect’ for brands with a multitude of different problems in their supply chains.

This may come down to convenience. The Conflict-Free Sourcing Initiative provides straightforward mechanisms for scrutinising the presence of conflict minerals in supply chains. There are no comparable initiatives that provide the same, easily accessible tools for investigating labor rights violations in supply chains. Moreover, the abovementioned challenges associated with combatting labour rights abuses in complex supply chains, and the unparalleled media coverage surrounding conflict minerals undoubtedly play a role in brands’ preference for dealing with conflict minerals. It is also undeniable that anti-conflict mineral initiatives are good PR exercises, demonstrating brands’ interest in addressing a morally loaded issue. But whether or not companies intentionally subscribe to anti-conflict mineral initiatives in an effort to ‘green-wash’ their supply chains and distract from the other, perhaps more complicated problems therein is impossible to say, and ultimately, attempting to answer this question would do little to address the current gap in corporate responses to these issues.

The question that really needs to be asked is how can we ensure that companies dependent on extractives take a greater interest in the other (non-conflict mineral) problems that are present in their supply chains? Some of the answers to this can likely be found in the reasons behind the relative success of anti-conflict mineral campaigns.

 

Yolande Kyngdon-McKay picture
Yolande Kyngdon-McKay has more than 10 years experience working in and analysing multiple aspects of the diamond and jewellery industries. Her academic and market research, field work and professional experience have ranged across a wide area, including fair trade diamonds, conflict minerals, the ASM sector, labour issues, consumer education, online surveying, supply chain ethics and sustainability, certification, competition policy and downstream sourcing in jewellery manufacturing.

Yolande is also a Senior Fellow at the anti-human trafficking NGO, Not For Sale. She is the lead author of Not For Sale’s forthcoming Electronics Report, which analyses data on the supply chains of 29 major companies in that sector. She is also Features Editor at E-International Relations the online political science journal.  

Yolande has just submitted her PhD thesis (International Studies, University of New South Wales, Sydney), and has a BA (International Studies) with First Class Honours. Yolande speaks basic German and is currently studying Indonesian. She is based in Sydney, Australia.

 


[i] The Not For Sale Electronics Report is due to be published in 2014.

[ii] See Matthysen, Ken; Montejano, Andres Zaragoza (2013), ‘Conflict Minerals’ initiatives in DR Congo: Perceptions of local mining communities. International Peace Information Services (IPIS), Antwerp, Belgium. Retrieved 18/11/2013.

[iii] See Organization for Economic Cooperation and Development (2012), OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (2nd edition). Organization for Economic Cooperation and Development, Paris, France. Retrieved 18/11/2013.

[iv] See Partnership Africa Canada (2009), Zimbabwe, Diamonds and the Wrong Side of History. Partnership Africa Canada (PAC), Ontario, Canada. Retrieved 18/11/2013.

[v] See Reardon, Sara (2012), Will we ever be able to buy a fair-trade smartphone? New Scientist, Volume 214, Issue 2860, page 18. Retrieved 20/12/2013; and KPMG (2013), Courting Young Shoppers? Boost Sales by Touting Sustainability and Social Issues. Retrieved 15/12/2013.

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