An earlier version of this article, including in the print edition of The Washington Post, incorrectly said that Kay Nimmo of the tin-industry group ITRI called an April regulatory deadline "rash, too strict and completely impossible." Nimmo used those terms to describe the deadline, but she used them separately, not as quoted. This version has been corrected.
Earlier versions of this article incorrectly said that tantalum is a mineral. It is a metal that occurs in minerals. This version has been corrected.
Minerals that fuel digital items also finance war
Tuesday, December 14, 2010
As you arm yourself with electronic gifts over the next few weeks, you probably won't think about the minerals your new cellphone, laptop or digital camera runs on. But no matter which company made the gadget, it's likely to be powered using tin, tantalum, tungsten or gold, all of which are mined in Eastern Congo, where profits contribute to financing the country's bloody war.
Rebel groups and the national army control many of Eastern Congo's mines. Over the past decade, more than 5 million people have died, and hundreds of thousands of women have been raped in the struggle for power, according to the Raise Hope for Congo campaign. While the Congolese government has expressed interest in tackling the multimillion-dollar trade in minerals, the involvement of its own troops has led critics to question their efforts.
The West has long been aware of this problem, though hard facts are difficult to establish: A 2008 U.S. Geological Survey report found that less than 10 percent of tantalum (the metal that occurs in minerals that is used to make capacitors in most cellphones and iPods) imported to the United States is from Congo. But one human rights group, the Enough Project, estimates that Congolese armed groups make $8 million per year trading in that mineral alone.
Electronics companies argue that the supply chain is nearly impossible to track: There are thousands of companies, they say, that leave little or no paperwork. Manufacturers use Congolese minerals, which cost only one-half or one-third the price of those mined in other countries - due to large quantitites of minerals close to the surface, lack of regulation and cheap labor - leaving the American consumer with no way of knowing whether their purchases are subsidizing warfare half a world away.
The Wall Street Reform and Consumer Protection Act, passed in July, seeks to change that, by requiring manufacturers to identify so-called conflict minerals and eliminate them from their supply chains.
In addition, the Securities and Exchange Commission has announced that it will come out with proposed rules on conflict minerals on Wednesday and final guidelines in April 2011. Electronics companies are scrambling to make their supply chain clean before then.
ITRI, a tin-industry group, isn't happy. Kay Nimmo, manager of sustainability and regulatory affairs for the organization, calls the deadline "rash," "too strict and completely impossible."
"The requirements could force electronics companies into an embargo of the Congo's minerals if they cannot comply in time," Nimmo says.
And no one wants an embargo - not Congo, electronics companies, human rights groups or nongovernmental organizations. It would be bad for American business and also leave many Congolese miners unemployed. So industry and NGOs have begun developing initiatives to improve transparency.
One such initiative is a "bagging and tagging" scheme, in which minerals are placed in a bag with a seal and security-tagged at the mine so that the mineral can be traced from mine site to exporter.
ITRI, which is running the initiative, estimates that since the pilot program started in June, 8,000 tags have gone on more than 300 tons of minerals. But NGOs say initiatives of this kind are an ineffective seal of approval, possibly worse than having no approval system at all.
"Bagging and tagging systems don't address extortion along transport routes: Illegal taxes can be levied without interfering with tagging, and conflict minerals can reach trading centers looking clean," says Annie Dunnebacke of Global Witness, an NGO that works to prevent natural-resource-related conflict and corruption.
Enough Project consultant Sasha Leshnev estimates that there are more than 20 ways to get a conflict mineral around the bagging and tagging scheme.
Electronics companies protest that there are always ways to go around a system. Michael Loch, director of supplier corporate responsibility at Motorola, says, "No matter what auditing scheme, there's going to be noncompliance. It can never be completely bulletproof."
The same is true, critics say, for other initiatives, such as a "smelter validation scheme." Leshnev argues that because electronics companies are approving their own auditor for the smelter scheme, it's not a system of independent monitoring.
"They are not giving us details of how and what they were doing, citing 'commercial confidentiality.' How can you say you have commercial confidentiality in a war zone?" says Leshnev. "This can't just be an industry process."
The Enough Project is set to release a report Tuesday ranking companies on their progress on conflict minerals, in the hope of shaming them into action before the SEC's April guidelines. Criteria included tracing, auditing and support for legislation. HP, Intel and Motorola rank at the top of the heap, while some other companies show no progress.
Until bigger changes are made, the Enough Project estimates that armed groups will take in some $185 million annually trading in these minerals, while, according to World Bank figures, miners will make $5 a day mining them. And American holiday shoppers will pay as much as $500 for a new cellphone, with little or no knowledge of what went into making it.