In unsafe mines deep underground in eastern Congo, children are working to extract minerals essential for the electronics industry. The profits from the minerals finance the bloodiest conflict since the second world war; the war has lasted nearly 20 years and has recently flared up again.
In that same 20-year period, the concept of corporate social responsibility in the west has evolved from companies giving employees a gym and having some photo opportunities for the chief executive, to addressing human rights throughout the supply chain, yet ICT companies such as Nokia, Samsung, HTC and Apple still cannot guarantee there will be no child labour used in the manufacturing of their products. There is now an increased focus on the supply chain as a crucial element if a company wants to call itself socially responsible.
For the last 15 years, the Democratic Republic of the Congo has been a major source of natural resources for the mobile phone industry. This special relationship has caused incalculable damage.
I have never experienced anything like what I saw the first time I entered the mines of Bisie. Armed groups had made a simple gate of sticks, and everybody going in or out had to pay them money. Around 15-25,000 people were trapped inside this village made of mud and plastic bags.
It was like stepping into the front yard of hell. Women everywhere were calling out their offers of sexual services to bypassers as if they were selling vegetables. Boys as young as 12 stared at us with layers of dried mud on their still-childish cheeks, shy of the bright light after days underground digging out valuable minerals. Everything brought into the village is taxed at the gate; a bottle of water cost several dollars, a kilo of meat cost $12. But because it is more expensive to leave, people stay inside just to get a meal.
There is still hope
It doesn’t have to be this way. Fortunately, there are some very powerful tools business can use to help change this. If the will is there, plenty can be done to improve things.
Due diligence must come first. When the electronics industry cannot guarantee that there are no blood minerals in their products, it is because they often do not know who they subcontract to. A guarantee requires that one actually knows one’s supply chains. Companies must appoint in-house representatives to get out of their offices and be agents who travel down the supply chain. They should be able to tell the truth about the circumstances when they return – preferably with cameras. Video can be a powerful tool when it comes to understanding the need for policies.
If there are too many weapons in circulation, and it is not safe for an issued agent to investigate whether a mine uses child labour, that is likely to be a very good indicator that one should not source from that particular area.
Transparency is a fantastic tool if one wants to be socially responsible. Warlords finance large-scale killing of civilians with minerals that get melted in Malaysia and then disappear into the undergrowth of subcontractors. Transparency is absolutely crucial when you want to track them down. These supply chains must be published.
It is time that the electronics industries got together to take real action. There is even an industry body set up to help: the Global e-Sustainability Initiative works for responsible ICT-enabled transformation to a sustainable world.
The Democratic Republic of the Congo has been associated with the electronics industry’s intoxicating cash flows since the middle of the 1990s; the industry has claimed the lives of more than 5 million people. The case of this country is special, but natural resources becoming a curse for developing countries is far from rare.
We need transparency in business to spot the grim truth. Some things have not changed very much since colonial times, but instead of theft sanctioned by empires, it’s now controlled by markets. Especially in Africa, companies operate with super-cynical exploitation of natural resources. Value simply disappears out of the continent without benefiting the local people.
The funding needed for a boost of the developing world lies within the countries themselves, but the power lies with businesses who are willing to pay a fair price for the natural resources they import. For every euro the international community spends on development and humanitarian aid in Africa, 10 euros are going the other way in the form of natural resources. That is certainly not corporate social responsibility.
Frank Piasecki Poulsen is a Danish filmmaker. His most recent work, Blood in the Mobile, addresses the issue of conflict minerals in telecommunications
Blood on Your Handset
If you are reading this on a smartphone, then you are probably holding in your palm the conflict minerals that have sent the biggest manufacturing trade group in the U.S. into a court battle with the Securities and Exchange Commission. At stake in this battle between the National Association of Manufacturers and the government is whether consumers will know the potentially blood-soaked origins of the products they use every day and who gets to craft rules for multinational corporations—Congress or the business itself.
The Dodd-Frank Act, passed in 2010, is primarily known as the law that tries to tighten regulation of the financial services industry and improve aspects of corporate governance. It also requires companies to track and report the conflict minerals used in their products. These minerals are tantalum (used in cellphones, DVD players, laptops, hard drives, and gaming devices), tungsten, tin, and gold, if they are mined in the Democratic Republic of Congo and surrounding countries including Rwanda, where the mineral trade has fueled bloody conflicts.
The rule requiring disclosure of conflict minerals will go into effect in 2014. Congress included it in Dodd-Frank out of concern for what is known as the “resource curse”—the phenomenon wherein poor counties with the greatest natural resources end up with the most corrupt and repressive governments. The money earned from selling the natural resources props up these harsh regimes and funds violence against their citizens and neighbors. According to the New York Times, Rep. Jim McDermott, who supported the requirement to disclose conflict minerals, visited a group of rape victims in Congo and traced much of the suffering in the country “to rebel soldiers who sold tantalum and other minerals to finance their war.” As the Dodd-Frank legislation puts it, “the exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo is helping to finance conflict characterized by extreme levels of violence in the eastern Democratic Republic of the Congo, particularly sexual- and gender-based violence, and contributing to an emergency humanitarian situation therein.”
In August 2012, the SEC, which implements parts of Dodd-Frank, issued a rulerequiring that companies disclose whether their products contain conflict minerals that are “necessary to the functionality or production” of their products. Companies are also expected to detail which mine or location the conflict minerals came from, the efforts the companies made to figure this out, lists of the smelters or refineries used to process the minerals, and a description of any products that are not “conflict free.” They must post information on conflict minerals on their website.
Two months after the SEC acted, the NAM, along with the U.S. Chamber of Commerce and the Business Roundtable, sued to try to stop the rule from taking effect. The trade groups argued that complying with the rule would be costly, that it is unclear whether Congolese people would benefit, and that the rule violates companies’ First Amendment rights by compelling them to speak. (Some big companies, including Microsoft, General Electric, and Motorola Solutions, have publicly opposed the business groups’ stance on the conflict minerals rule.)
In July, Judge Robert L. Wilkins upheld the SEC’s rule. He said that Congress could pass the disclosure rule as “a reasonable step to shed some light on this literally life-and-death issue,” and to “encourage companies using these minerals to source them responsibly.” Wilkins obliterated NAM’s argument about cost and uncertain benefit, finding that the SEC had no obligation “to evaluate the humanitarian impact and social benefits of the Conflict Minerals Rule.” Finally, the court rejected the claim that the disclosure rule compels speech.
As the battle advances to the U.S. Court of Appeals for the District of Columbia Circuit, the manufacturers’ group has submitted a brief repeating many of the arguments that they offered to the lower court. They’re still weak. The First Amendment argument that the rule “compels” speech is particularly silly. All SEC disclosure regulations make a company speak, whether it is about environmental liabilities or its own financial health.
As the court case looms, the underlying conflict in Africa escalates. In late August, the U.S. State Department issued a statement saying it is “alarmed” by the growing violence in Congo. What happens in the appeals court this fall will determine whether American industries can use conflict minerals without telling consumers and investors what’s in the circuit board of the next cool cellphone. In our interconnected global village, the appeals court’s ruling will also matter half a world away for the Congolese miners, the militants who sell tantalum to fund their violence, and the innocent people caught in the battle zone.