A disturbing article this week in the FT reports how cassiterite sourced through the use of child and slave labour has made it into the supply chains of global electronic goods manufacturers. Cassiterite is a derivative of tin ore necessarily used in circuitry and its use has, ironically, enabled devices to become more eco friendly. But at what cost?
Prices for tin ore have soared on the London Metal Exchange from around $5,000 per tonne in 2003 to more than $19,000 today driven by the demand for consumer electronics. War torn Democratic Republic of Congo (DRC) is home to a huge concentration of tin mines and now a renegade army division has moved in to take control of some of the mines with disastrous results. I spoke with Nicholas Garrett and my former colleague, Harrison Mitchell who penned this report for the FT and they elaborated more on their investigation. According to Nicholas who visited the mines in the Walikale region of DRC:
The manner in which the artisanal miners in Bisie - some as young as twelve years old - are forced to work is a human rights disaster. Under the watch of the 85th brigade some are forced to spend up to 72 hours in narrow tunnels, some of which do not exceed 70cm in diameter. The general safety conditions are appalling, with regular accidents occurring on site.
I highly recommend checking out Mark Craemer's site to view an extensive collection of moving images from his investigative mission to the DRC tin mines to get an idea of the plight of the artisanal miners at the sharp end of this trade. (Mark kindly gave permission to use the picture displayed here.)
To be fair, managing commodities sourced unethically out of the supply chain is exceedingly difficult. Nicholas and Harrison described the labyrinthine supply chain process in the FT piece:
Cassiterite from Bisie is bought by middlemen linked to exporters and international traders who sell the ore on to smelters that purchase on the open market. At the smelters, the tin from North Kivu is mixed with other tin, refined and sold either directly to solder manufacturers, or through international metal exchanges. Finally, tin solder is sold to manufacturers for use in the production of electronic gadgets.
Microsoft's response on this issue was quoted in the FT article:
we don’t have visibility into the activities of commodity suppliers participating at the beginning of the hardware supply chain
will review levels of compliance amongst its primary suppliers with these guidelines and ensure that business practice standards are met by all companies operating within the supply chain
Samsung said that it had now requested that its component providers investigate their suppliers of tin and stated that it is working closely with the Electronics Industry Code of Conduct Extractive Work Group to find the best solution to the problems of sourcing from countries such as Congo
takes any alleged breach of the code of conduct seriously and will investigate further
I reached out to the joint industry initiatives looking at this issue GESI (Global E Sustainability Initiative) and the EICC (Electronic Industry Code of Conduct) and clearly this is an issue of concern now under detailed and considered review. A study of the social and environmental responsibilities for industry sourcing from the extractive sector is underway and will report next month. The group has recently consulted with human rights NGOs, trade unions and others on the best way to tackle this issue and I am told the group is making good progress:
Our research is expected to be complete at the end of April but we have seen enough data that we're hoping to begin to determine our next steps
The easy thing here would be for the industry run away from the problem and source elsewhere. But actually, the economic might of the global IT industry could make a real difference through exertion of collective downward pressure on the supply chain. I spoke to others involved in the reform process in DRC for a view on this and according to Peter Eigen, Chairman of the Extractive Industries Transparency Initiative (EITI), a global initiative advocating transparent revenue flows in producer countries:
Pulling out of DRCongo would be the wrong approach. Instead, the global electronics industry has to acknowledge its responsibility, and start to conduct proper due diligence when sourcing their mineral inputs as well as proactively to support the general reform process in the DRCongo.
So there you have it - inextricable proof that we live in a truly connected economy both for better and for worse and when it come to sustainability, environmental issues are nearly always closely linked to human rights. Cassiterite is an issue of industry concern that will continue to be on the radar screen for some time with the ethical supply chain risk rising proportionately with international tin ore prices.
(Disclosure: I am employed by SAP and SAP together with the German government has offered technical assistance towards supporting enablement of the EITI process)