The Enough! Project Declares a Victory in the Congolese Conflict Minerals Issue

by on

Last week, tucked away in the Financial Reform bill that passed both Houses of Congress (and now awaits President Obama’s signature), there appears a key provision that will create a significant supply chain regulatory compliance challenge for any company sourcing materials that contain tin, tungsten, tantalum and yes, gold! In short, these OEM’s (think Apple, HP, Intel pretty much any company that manufactures electronics, etc.) will need to state whether they source “conflict minerals from both Congo and neighboring countries and “report on steps taken to exclude conflict sources from their supply chains, backed by independent audits, according to The Enough! Project. The Securities and Exchange Commission will serve as the regulatory body and they will have nine months to create the regulations to implement this provision of the bill.

Getting past the fact that the SEC serves as a rather strange federal oversight group for a purely supply chain function (think FDA for food compliance issues, FAA for the aviation industry, etc.), we can’t help but wonder if there is anyone in the SEC with any knowledge at all of global supply chain management! Hopefully, the manufacturing industry will take an active role in helping shape the final regulations (maybe we can send Andy Grove in to assist?) to ensure we don’t see another Sarbanes-Oxley overly complex regulatory nightmare!

In a previous article on the subject, we talked about how DC advocacy group The Enough! Project presented a clear case in their report geared towards exposing the use of conflict minerals from the Congo in American electronics. Their argument called for a long-term plan focused on supply chain transparency and gradually implementing audits and regulatory practices that would eventually expose exactly where conflict metals were entering the supply chain, so that companies could progressively find alternate sources. Another crucial part of their suggested solution also called for action within the Congo and abroad to relegate the corrupt political system that currently controls the minerals to distribute the profits in a constructive way.

In some ways, they’ve come across a great victory in their campaign. A letter was recently released from John Prendergast, co-founder of the Enough! Project, that reads:

“Congress passed the Wall Street reform bill with the inclusion of a key provision on conflict minerals which will require companies to disclose whether they source conflict minerals from Congo or neighboring countries, and require companies to report on steps taken to exclude conflict sources from their supply chains, backed by independent audits.

We have to ask, though — is the Enough! Project claiming this a complete victory? While we fully support their mission, we support the version they present in their original report, the one that involves deep research into not only the supply chain, but also the Congolese governmental system and processes so that Congo can eventually function on their own as a viable economic power. Therefore this “victory to us seems a little hollow — more regulations for US businesses to comply with and really no solution aimed at policies to assist the Congolese, who need to rebuild their economic system literally from the ground up. But perhaps it is a start.

“We will be coming back to you with ideas of how you can continue to be involved in shaping the actions our government takes and the practices our electronics companies utilize in sourcing the minerals that power all of our electronics products. Peace in Congo is possible, Prendergast’s letter ends. We agree — calling attention to this issue is vitally important. But let’s hope the Enough! Project doesn’t stop here.

We’re catching fish for the Congo instead of teaching them to fish — and that could have far worse implications than even today’s horribly corrupt situation.

— Sheena Moore & Lisa Reisman

Comments (6)

  1. I think you have missed a little in your last line of the article. You mention that “We’re catching fish for the Congo instead of teaching them to fish — and that could have far worse implications than even today’s horribly corrupt situation.”

    The is incorrect. There are a number of measures in the Congo being implemented to help the people of the Congo, but these measures are being severely undermined by the violence being financially supported by the sale of conflict minerals. You can teach someone to fish, but if they are raped or killed when going to the fishing hole, your efforts are all for not.

    This is why the Wall Street reform bill is significant as it puts companies who are financing of this violence (implicitly or explicitly) that things have to change.

    Please also remember, the industry had a years and years to address this problem internally such as when this issue first arose in 1999. They chose not to.

    Even now, the inability of groups such as the EICC to come up with any real progress has forced ‘Big Brother’ to take charge.

    The electronics industry has made their bed. Now they must….

    Also, this situation does not have to be a win/lose scenario, there still exists many examples of how companies could embrace these changes and make it a win/win. Let’s hope it is a positive change for all involved.

    No Blood Minerals
    http://www.facebook.com/NoBloodMinerals
    http://www.twitter.com/NoBloodMinerals

  2. Sheena Moore says:

    I want to be explicitly clear in stating that we are in no way, shape, or form criticizing or attempting to undermine the mission or actions of The Enough! Project — the fact that they are able to call attention to and bring advocacy towards situations such as this is really unparalleled.

    In terms of the supply chain, however, there was simply no viable traceability technology in 1999, and we’re not sure there even is today. I’m sure that the electronics industry isn’t sitting around celebrating the use of conflict minerals, they’d like to see the use of them in today’s consumer electronics eradicated just as much as anybody else. The problem lies in that consumers still want their computers, cell phones, and other gadgets — so until alternate sourcing options are available and practicable tracing technologies are in place, electronics companies will trace as best they can to meet their demands.

    I guess my ultimate response to The Enough! Project on these grounds is that you can’t make comments like “Let’s hope it is a positive change for all involved” and then turn around and make electronics corporations the villain — unless The Enough! Project wants to throw away the computers and cell phones they’re using to propagate their messages (see the above Facebook and Twitter links). The real villain in all of this is the corrupt practices in the Congo, and that, I think we can all agree upon, is a villain worth fighting against.

  3. Rob Matthews says:

    “so until alternate sourcing options are available and practicable tracing technologies are in place, electronics companies will trace as best they can to meet their demands.”

    Talking of the tantalum

    Tracing technologies have already been developed and alternate sources of tantalum can also be developed.

    Federal Institute for Geosciences and Natural Resources (BGR) have developed methods and have a library of samples from across the world if you are worried about the technology.

    Mind you talking about technology is a bit of a “red herring ” if we are talking about fish. Other none technological ways of weeding out the tantalum could be developed.

    New sources of tantalum of none DRC could be developed with more backing. Prime example is Gippsland Abu Dabbab deposit that could be developed up to a million lbs a year. Other candidates in the tantalum area as well though not as big.

    “I’m sure that the electronics industry isn’t sitting around celebrating the use of conflict minerals, they’d like to see the use of them in today’s consumer electronics eradicated just as much as anybody else. ”
    Simply not true this problem could have been tackled a decade ago if the electronic industry really cared and most of the industry have fought the new laws, that have just been signed by Obama, behind the scenes.

    Other sources of tin,tungsten and gold and other deposits that can be developed for these sources.

    “The real villain in all of this is the corrupt practices in the Congo, and that, I think we can all agree upon, is a villain worth fighting against.”

    Well the message that it is all the Congolese fault is a message that the Electronic companies would like us to believe as it gets them of the hook.

    Hope Metal miner is not going to swallow this hook line and sinker!

    Robert

  4. admin says:

    Robert, To clarify our post and points, we aren’t for a minute disagreeing with the legislation or saying “OEM’s are innocent in where they source these materials.” Our point is more along the lines of, “it’s not a simple thing to call for tracing.” That doesn’t mean it shouldn’t be called for. I have asked our sister site, Spend Matters (www.spendmatters.com) to do a post on the state of the technology and processes available for product tracing. We know the aerospace industry has done it (successfully) as has the food industry (for the most part, less the China contaminated food items – where traceability was not deployed and I see no legislation has passed on that). In this case however, OEM’s have typically never traced up to 5 layers or more in their supply chains (for example, I’m not sure anyone at Intel could actually name a mine that their metals actually come from). Apple probably doesn’t know the smelter who made the ingots for their mac book extruded aluminum casing, but I could be wrong. That’s the point we are making….it’s complicated, which isn’t to say it shouldn’t be done. To your other point on tantalum sources – “alternate sources can be developed” well, yes that’s true and the time cycle to do so is a minimum of 7 years. So it’s not like you can turn off this mine and flip to another, but that’s precisely what all of these OEM’s are now doing while companies like Commerce Resources (who have tantalum reserves) are not yet operational. Sourcing something like aluminum provides a far greater number of options than sourcing things like tantalum. Our point: there are two sides to every story. I personally reject the “evil villain OEM portrayal” that is so stereotypical of advocacy organizations. A little understanding and open dialog on both sides is what we are after….LAR

  5. Rob Matthews says:

    Apologies in advance if it seems i am picking on Metal miner as i see plenty of comments like the ones here elsewhere. In fact a lot worse articles and comments.

    Admin tired of reading that no one knew what is going on in the electronic industry. Sounds like those tired old tales that no one in Germany apart from a few concentration camp guards knew about the Holocaust.

    I come across plenty of adverts from Chinese companies selling tantalum that do not even bother to disguise that their “coltan” is fresh in from the DRC. In fact they see it is a good selling point as it is so cheap.

    All these companies crying that there is no alternative to the DRC tantalum at the same time as saying of course we do not know where our tantalum comes from is a insult to basic logic.

    “alternate sources can be developed” well, yes that’s true and the time cycle to do so is a minimum of 7 years.”
    Only if you start from now if Gipplsand had the money could be as little as two years.
    http://www.gippslandltd.com.au/
    http://www.commerceresources.com/s/Home.asp

    Commerce also say two years though i expect that is to optimistic.

    Other companies would not have to start from scratch either.

    “evil villain OEM portrayal” Would say there is plenty of blame to go around you have everyone from Apple, to the Chinese, to the North Koreans profiteering from the situation and companies from my home country Britain.

    “A little understanding and open dialog on both sides is what we are after” Agree with you there. Not a member of any advocacy organizations but now they are having successes guess others will be ready to talk.

    Robert

  6. For those watching the supply chains, there has been an interesting development in the UK. GlobalWitness has just launched a lawsuit against the UK government for their inaction to refer companies in the UK to the United Nations for sanctions. They are specifically directing their attention on those trading in conflict minerals.

    London-based AMC Group comes to mind immediately. Is that who they are thinking?

    I think we are seeing how serious the issue of conflict minerals is. It continues to heat up and the supply chains of the affected minerals could go for a ride.

    For those not aware, GlobalWitness is the same group that brought the Kimberly Process to the forefront.

    No Blood Minerals
    http://www.facebook.com/NoBloodMinerals
    http://www.twitter.com/NoBloodMinerals

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.