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Feature Article: Conflict Minerals in the Supply Chain

When one sees the word "minerals" in the context of sustainability, it's easy to assume that the concern is environmental. But there is a special subset of minerals - so called "Conflict Minerals" - that are of concern because of the human rights issues associated with their mining. One group of these minerals, "The Three T's and One G" (tin, tungsten,  tantalum and gold), is often sourced from areas in the central African Democratic Republic of the Congo (the "DRC"), where undeclared civil war between various rebel groups has exacted significant tolls on the human rights of members of the local communities. Here's a quick look at the problem. Read "Ideas You Can Use Now" for some solutions.   

How is the sourcing of the minerals in the DRC tied to human rights abuses? A good portion of the far-upstream supply chain for these minerals (mines, smelters) is under the de facto control of armed militias. The militia are well-known to be ruthless and have little or no regard for basic human rights. Procurement of minerals from these sources can result in payments that are often siphoned off to rebel groups, funding the militias engaged in the conflict. 

What human rights abuses are associated with the DRC conflict? Armed militias are reported to be present at over 50% of the mines in this area. The militias are known to extort, tax and brutally coerce locals into working in the mines under slavery-like conditions. There have been numerous reports of rape and violence perpetrated by members of these militias.

How do you know for sure whether the minerals you are buying came from conflict-associated areas? Basically, you don't ... and that's a large part of the problem. These minerals are fungible and smelters obtain raw material through brokers who source from many mines, some of which are conflict-associated and some of which are conflict-free.

How can you avoid purchasing Conflict Minerals if you can't tell minerals from one another? Fortunately, companies in industries that purchase large amounts of these minerals (for example, the electronics industry) have banded together to try to create a system whereby you can be relatively assured that "your" minerals are conflict-free. It's still a work in progress, relying on stringent third-arty audits of smelters that result in "conflict free" designations. If you can get confirmation that your purchases come only from designated "conflict-free smelters," then you can feel fairly confident that you are not funding the militias and thereby perpetuating the associated human rights abuses.  

Besides possibly funding the atrocities, what are the other concerns associated with the conflict minerals issues? The other primary concern has now become regulatory compliance. The OECD has issued detailed guidance on the due diligence required to address this issue (OECD Guidelines). U.S. federal and state regulators, in particular, have issued rules requiring companies to investigate their supply chains for the presence of conflict minerals and report on their efforts to eradicate them from their purchases. Recently, the U.S. Securities and Exchange Commission (the "SEC") issued final rules on this subject that affect publicly-held companies, including retailers that are often far downstream from the minerals sourcing (SEC Rule).