Intel Announces Commitment to Conflict-Free Microprocessors
Intel (NASDAQ: INTC), has announced that it is now manufacturing and shipping its first-ever conflict-free electronics product, a microprocessor.
Speaking at the 2014 Consumer Electronic Show, Intel’s CEO, Brian Kranich said, “We felt an obligation to implement changes in our supply chain to ensure that our business and our products were not inadvertently funding human atrocities.”
Intel, which is the world’s largest manufacturer of microprocessors, also called on others in the electronics industry to join them in a mission to create conflict-free products.
The extraction and transport of “conflict minerals” – tin, tungsten, tantalum and gold – has helped rebel forces amass vast wealth which they use to militarize mines and wage devastating violence and human rights abuses against civilians in the Democratic Republic of Congo.
Citing the extreme humanitarian crisis in the region Congress added conflict mineral provisions to the 2010 Dodd/Frank Financial Reform Act requiring companies to disclose if minerals used in their products originated in the conflict zones. Senator Dick Durbin (D-IL) and Representative Jim McDermott (D-WA), in writing the provisions believed that transparency and accountability is needed in an area of the market not well documented, and the eventual rule would give consumers and investors much needed source information about products.
In 2011, Trillium Asset Management joined a diverse range of stakeholders including investors, human rights activists and industry representatives, convened by Responsible Sourcing Network, to provide recommendations to the U.S. Securities and Exchange Commission (SEC), the federal agency charged with the rulemaking. Intel, an industry leader in the multi-stakeholder group, set the bar for transparency by publishing a white paper Intel’s Efforts to Achieve a “Conflict-Free” Supply Chain. The SEC finalized the rules in August, 2012 and companies are due to report on their use of conflict minerals beginning in May 2014.
Opposition has followed the rule-making process since the passage of Dodd-Frank.
In 2013, the Conflict Mineral Rule survived a legal challenge mounted by the US Chamber of Commerce and is now before an appellate panel. The US Chamber of Commerce, Business Roundtable and National Association of Manufacturers, arguing against the rule, contend that compelling a company to be more transparent about its business is a violation of the First Amendment.
Despite the lawsuit, Intel remains committed to a fully conflict-free microchip. Hewlett Packard, Phillips, SanDisk, AMD, Acer, Dell, Apple, Microsoft Motorola Mobility, Nokia and Panasonic have also made notable progress towards conflict-free products according the Enough Project, as has General Electric.
“Intel made responsible sourcing in war- torn Congo a priority before the SEC finalized the conflict mineral rules,” says Susan Baker of Trillium Asset Management. “We applaud Intel for being an early mover and clearly demonstrating that traceability, auditing and certification to reduce human rights risk in mineral supply chains can be done. Intel’s announcement is good for business, its shareholders and the communities in the DRC and surrounding regions.”
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