Boundaries of Responsibility

You’ve heard about conflict diamonds. Now get ready for “conflict coltan.” Coltan is an ore mined in several countries including the war-torn Democratic Republic of Congo (DRC). Processed coltan yields valuable tantalum, a component in electric capacitors found in cell phones, laptops, DVD players and game consoles.
But tantalum doesn’t come cheap. The U.N. Security Council has published a series of reports since 2001 on the illegal exploitation of natural resources in the DRC, singling out the coltan trade as subject to “highly organized and systemic exploitation.” All parties in the ongoing civil war, which has claimed four million lives, have benefited from the mining and sale of coltan. Compounding the devastating humanitarian crisis is the equally miserable toll on the Congo’s national parks, home of the endangered mountain gorilla.
At the turn of this century, a spike in demand for coltan for electronics strained supply, sending coltan prices skyrocketing. Opportunistic farmers and gold miners turned to coltan mining. In what’s been best described as the Klondike-style rush, forced laborers and prisoners were sent to national parks. There they cleared protected parkland and feasted on gorilla ‘bushmeat,’ wreaking havoc on an already fragile population of mountain gorillas. According to the U.K.-based Fauna & Flora International, gorilla hunters decimated the eastern lowland gorilla in the Lahuzi-Biega National Park, a World Heritage site and biodiversity sanctuary in eastern Congo. Coltan became the currency of choice in the bloody conflicts in the Congo and neighboring Rwanda and Uganda. According to the International Rescue Committee, the resulting chaos claims 1,500 lives every day in a crisis barely reported by the Western media.
Metal production has shifted from developed to developing countries, bringing greater risks due to weaker social and environmental conditions for metals manufacturers, end users and investors.  Electronic manufacturers are beginning to feel the pressure to account for their supply chains. The makeITFair campaign coordinated by Netherlands-based Center for Research of Multinational Corporations and supporting initiatives launched by the Electronics Industry Citizenship Coalition ( EICC) & The Global e-Sustainability Inititiative (GeSI), are pressing electronics companies to understand the risks in their supply chain and take action to extend supplier standards deeper in their operations.
In July, makeITfair released the results of a 23-company survey that confirmed an important shift in in tech companies’ attitudes.  In survey responses, most companies expressed concern about poor conditions a willingness to explore collaborative relationships with stakeholder groups. (Hewlett Packardstood out for having studied its own metals supply chain.) The EICC/ GeSI report also released this summer made recommendations on how member organizations can effectively influence the social and environmental impacts of mining in their supply chain.
U.S. Senator Sam Brownback has called on the U.S. to do its part to end the conflict in Congo.  Brownback wants to require certification of the origin of coltan for all U.S.-based companies that use tantalum in manufacturing.
Concerned investors can complement the ethical arguments advanced by these efforts by using our position as investors to remind companies that supply chain issues can materially impact share price as well. To that end, Trillium Asset Management Corporation will be writing several electronic companies, including  Nokia, AT&T, Intel, Apple, Dell andLogitech, asking them to report on plans to implement the EICC/ GeSI recommendations.  The recommendations press companies to work with stakeholders, and partner with other IT companies, to strengthen efforts and reduce proliferation of overlapping initiatives to end labor, human rights and environmental violations.  A second major recommendation asks companies to better identify the metal content in cellphones, laptops and other electronics to facilitate better tracking of materials, and higher recycling rates.