Why Every Manufacturer Should Care About Conflict Minerals

July 27, 2016 12:10 pm
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posted within Supply Chain Development

Conflict Minerals

The tragic stories of human rights violations and corruption throughout the Congo region of Africa are gut-wrenching. The term “conflict mineral” refers to the mineral ores that are in high demand such as tantalum, tungsten, tin, and gold; commonly called 3TG.

The 3TG minerals can be found in the Congo region and are typically under the control of armed groups.  The groups use slaves that they capture in the region to mine the minerals.  Then, sell the 3TG around the world for massive profits. One 2008 report estimates that the armed groups earned $185 million from the mineral trade.  Meanwhile, the workers are forced to barely survive in deplorable conditions.

Demand is high for the conflict minerals because they are used in many every day products, such as cell phones and cars.  The 3TG minerals can be found in most electronics, cans, batteries, glass, drill bits, light bulbs, as well as, many types of manufacturing and industrial cutting equipment.

Over the last several years, many organizations have initiated strategic efforts to reduce the minerals that are purchased from the militia groups.

In 2010, the U.S. congress passed an addition to the Dodd-Frank Act, adding a requirement for companies “contracting to manufacture” to disclose their use of conflict minerals.  It also mandates that the companies provide their 3TG purchasing information on their public website.

In a recent press release, the European Union (EU) disclosed an agreement to deploy a mandatory reporting scheme for all companies that import the 3TG. The EU legislation will extend to all conflict minerals no matter the sourced location, not just those coming from the Congo region.

Manufacturers will need to do their due diligence to understand the regulations and to ensure that they, and all of their suppliers, are in compliance.  Not knowing every step in the supply chain could lead to fines and embarrassing news articles that could destroy a brand or business.

4 Ways to Help Ensure Compliance:

  1. Traceability Audits

The purchase of conflict minerals requires an independent third-party supply chain traceability audit.  It also requires that the audit findings be made available to the public and to the U.S. Securities and Exchange Commission (SEC).  It is smart business to mandate that all materials used in your production process are known and that the country of origin has been fully documented.

  1. Supply Chain Review

Identify any of your suppliers who utilize the 3TG minerals in their processed and production. Determine the country of origin for any minerals being used. Ensure that every supplier is in compliance with all of the relevant regulations.

  1. Share Your Thoughts

Contact suppliers and let them know that you do not want your purchases supporting the violent groups in the Congo region and encourage the purchase of minerals from other sources.

  1. Support Ethical Suppliers

Purchase supplies from companies who are able to prove the origin of their materials.   Support only those businesses who are making purchasing choices that you agree with.