Corporate accountability: Conflict minerals in DRC
NewsNotes, March-April 2010
Vol. 35 No. 2
Over 60 faith-based institutional investors and other socially responsible investors have sent a letter to automotive, aerospace, medical device companies, as well as electronics companies and mining companies with operations in the Democratic Republic of the Congo (DRC), calling on them “to do their part to stop the continuing violence” in that country.
Signatories to the letter include the Maryknoll Sisters, Adrian Dominican Sisters, Catholic Health East, Catholic Healthcare West, Missionary Oblates of Mary Immaculate, Tri-State Coalition for Responsible Investment, As You Sow Foundation, Boston Common Asset Management, Domini Social Investments, Pax World Funds, and the Interfaith Center on Corporate Responsibility (ICCR).
This conflict, which claims approximately 45,000 lives each month, is fuelled by various militias who reap their profits by controlling the DRC’s vast natural resources. Since the conflict began, more than 5.4 million have lost their lives.
The investor letter states: “The DRC is one of the most mineral-rich countries in the world, with sizeable deposits of gold, tantalum, tin and tungsten. According to the United Nations, over 50 percent of the mines in eastern Congo are controlled by warring armed groups, who demand ‘taxes,’ bribes or other payments for the minerals being extracted out of the mines. The majority of the minerals are smuggled to neighboring countries where they are sold to smelters, and ultimately find their way into finished consumer products. This practice directly hinders repatriation and disarmament efforts, as it provides armed groups with a robust funding source.”
According to a 2009 report by Global Witness, Rwanda is one of the main conduits for illicit minerals leaving the Congo.
“These DRC minerals enter a complex supply chain and subsequently make their way into products such as cell phones, laptops, and video game systems, as well as components for automobiles, airplane engines, medical devices, and other products.” The investors are “initiating dialogue with companies that use these minerals, seeking efforts to ensure they are not inadvertently supporting one of the world’s longest-lasting and deadliest conflicts.
“Since 2001, some electronic companies have taken initial steps to address sourcing minerals from the DRC, including verbal assurances from their suppliers not to purchase conflict minerals.”
One of these corporate initiatives is the Global E-Sustainability Initiative, a consortium of companies in the information and communications technology sector whose Supply Chain Initiative released a report in June 2008 on minerals extraction that concluded that electronics companies, as well as companies in other industries, could influence socioeconomic conditions relating to their purchased materials by developing a better source of tracking the minerals that enter their supply chains.
Such an effort has been undertaken by RESOLVE, a nonprofit whose Supply Chain Mapping Project is investigating the supply chains for tin, tantalum, and cobalt, in order to assess suppliers’ codes of conduct addressing social, environmental, health, and labor issues.
However, the investors state, “[w]e believe additional individual company action is urgently needed to achieve concrete change in the DRC.” They call for companies to take the following actions:
- Make a public statement condemning the use of mineral revenue that fuels the ongoing conflict in the DRC and explain the steps the company is taking to address the issue;
- Develop policies and procedures to identify where the raw materials in their products originate and ensure conflict mineral are not entering into their supply chain;
- Work with suppliers throughout their entire supply chain to ensure internal policies on sourcing conflict minerals are being adhered to;
- Work with non-governmental organizations (NGOs), industry associations, investors and other stakeholders to support various diplomatic, political and economic strategies that will help end the root causes of the ongoing conflict.
The letter concludes: “There is a moral imperative for both investors and companies alike to ensure they are not inadvertently complicit in the systemic rape, torture and killing of innocent civilians in the Congo. The disclosure of sourcing policies and practices by companies throughout their entire supply chains is essential to allow investors to evaluate the social, environmental and moral impacts associated with a company and to inform investors’ decision-making practices.”