Can 'naming and shaming' bring an end to Congo's conflict mineral mining?
Guest blogger Laura Seay expresses doubts about the potential for 'naming and shaming' to convince companies to eliminate Congo's conflict minerals from their supply chain.
Just before the holidays, the Enough Project released its first rankings of electronics companies based on their "progress they are making toward conflict-free supply chains and a conflict-free mining sector in Congo." You can look at the quick guide to their rankings here or read the full report here.Skip to next paragraph
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As longtime readers of this blog know, I'm cynical about the effects that any effort to engage in supply chain monitoring in the DRC will have on the conflict there. This is because the conflicts there are not only about or fueled by the mineral trade and also because local institutions are not strong enough to prevent smuggling, mislabeling, and the many, many, many other ways of getting around a monitoring and tracing regime. I'm of the view that this exercise is mostly a waste of time and effort, but if companies want to do it, then so be it. The "name-and-shame" approach that Enough is using here is standard advocacy practice. Whether consumers will pay any attention remains to be seen.
What I'm interested in here, however, is the report's authors' methodology in determining whether a company is making a good-faith effort at tracing and ending the use of Congolese conflict minerals in their products. The report outlines 18 indicators they used to make this judgment:
- Tracing: Has the company traced its suppliers of tin, tantalum, tungsten, and gold (3TG)? (four questions)
- Auditing: Does the company have audits conducted of its suppliers of the 3TG minerals to determine mine of origin and chain of custody? (six questions)
- Certification: Has the company taken concrete steps to develop an international certification regime for the 3TG minerals? (three questions)
- Stakeholder engagement: Has the company had regular engagement with the NGO coalition, led by Enough, on the conflict minerals issue? (two questions)
- Support for legislation: Has the company supported the legislation on conflict minerals? (three questions)
As you can see from the rankings, Enough believes it has sufficient information for most companies to answer all of the above questions. I'm curious, though, as to how they've verified that companies have undertaken these actions. It's virtually impossible to fully trace suppliers, determine mine of origin, and to determine the chain of custody for the 3T's and, in particular, gold in the eastern DRC. On what basis is Enough gauging these activities? As Jason Stearns points out, it's pretty easy under the newly-released draft SEC framework (the development of which was required by the Dodd-Frank legislation) for a company to engage in due diligence, find nothing, and yet still be using minerals the sale of which is funding violence. As he notes in another post, the lack of an oversight mechanism plus the secretive nature of mineral sales in the Kivus will make it very, very difficult for companies' auditors to actually verify what they claim to be verifying.