Intel In the Line of Fire Over Use of Conflict Minerals Part Three

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This is the third post in a three part series. You can read the first post here and the second post here.

Before we get into Intel’s strategies for handling conflict minerals, I’d like to mention a lesson I once learned in my consulting years you can’t just point out a problem without creating a solution.We’ll come back to this in a moment.

According to Intel’s own CSR blog site, the company does support the legislation but claims to have, “a different view about what will work best and have the most impact. Intel claims it is not about cost and that the company is, “genuinely working to find ways to move things forward and help improve supply chain responsibility around the sourcing of these minerals. Maybe we can buy their arguments, maybe we can’t but here are the specific actions Intel has taken:

  • Posted our Conflict-Free Statement about metals on our Supplier Site.
  • Requested that our suppliers verify the sources of metals used in the products they sell us.
  • Increased the level of internal management review and oversight, as well as our transparency and disclosure on this topic in this report.
  • Engaged with leading NGOs and other stakeholders to seek their input and recommendations.
  • Hosted an industry working session at our offices in Chandler, Arizona in September 2009 with more than 30 representatives from mining companies, traders, smelters, purchasers, and users of tantalum to address the issue of conflict minerals from the DRC.
  • Co-sponsored a multi-industry “call to action meeting on extractives in San Francisco, California, with industry partners and Business for Social Responsibility in October 2009.
  • Funded a study with EICC members on defining metals used in the supply chain, and are working on a similar project to increase supply chain transparency for cobalt, tantalum, and tin.
  • Intel currently co-chairs the EICC’s extractives working group and was the first company in the electronics supply chain to conduct on-site smelter reviews. Through these reviews, which take place at locations around the globe, Intel is determining if smelters can verify the mines of origin for the ores they process.

Now perhaps like us, you may not feel these measures go far enough. Funding a study to define the metals involved, seeking the input of NGO’s or posting a statement on a corporate website hardly represent compelling activities in the eyes of probably many.   Instead, Intel ought to support the legislation in its current form.

We’d go further though to suggest two additional initiatives Intel may wish to explore. The first initiative involves investing in systems and technologies that would allow internal management to better review and oversee the activities of its suppliers. (It might also help from a PR perspective to publicly declare the amount of funding Intel will dedicate toward identifying solutions) Technologies from firms such as Aravo, Xcitec, CVM Solutions, and Rollstream would be a start. Part traceability is not a new field of supply chain management. Aerospace supply chains as well as pharmaceutical supply chains have well developed processes, systems and technologies to support product traceability. Intel could study these industries more closely.

A second strategy Intel ought to consider involves partnering with mining firms such as Commerce Resources, based in Canada that do have potentially viable tantalum deposits. Joint collaboration to help bring “conflict-free minerals to market seems like an obvious strategy. Other companies in other industries are leading the way there (e.g. Toyota with Pan American Lithium and Posco also with PAL). In general, whether we as a nation are concerned about creating supply dependency upon countries like China (who continuously manipulate various industrial metal exports) or wish to source materials from conflict-free zones we need to expand our global supply options and that includes creating greater collaboration amongst OEM’s and junior mining firms as well as support for domestic and North American early stage mining projects.

We refer to the wise words of Ben Franklin, “For surely if we don’t hang together, we’ll all hang separately. Let’s hope that as an outcome of this debate we’ll see some lasting collaborative efforts toward developing new supply options.

–Lisa Reisman

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