To stop conflict minerals, make European firms establish origin of supply chain - expert

To stop conflict minerals, make European firms establish origin of supply chain - expert

10/05/2016

European companies should be required by law to establish the origin of the minerals they use in their products to put an end to the trade in gold, tin and other minerals mined in conflict zones, a leading expert said on Tuesday.

Campaigners have long raised concerns that proceeds from mining many of the minerals used in electronics are used to finance warring parties and prolong conflict in Democratic Republic of Congo (DRC) and elsewhere.

To encourage companies to responsibly source minerals they use, the Organisation for Economic Co-operation and Development (OECD) issued guidance in 2010 for responsible mineral supply chains, however its implementation by firms is voluntary.

"If you make it mandatory that firms tackle the problem then we could get rid of the conflict minerals issue," said Constantin Blome, a professor specialising in conflict minerals and supply chains at Britain's University of Sussex.

"(If the OECD guidance was enforced) I think it would change the situation a lot," Blome told the Thomson Reuters Foundation by telephone from Paris which is hosting a two-day conference on conflict minerals.

He said collaboration between firms, data sharing and pressure from the consumers were key to ending the trade in conflict minerals.

In 2010, the United States passed legislation that requires manufacturers to determine whether any tin, tungsten, tantalum or gold in their products came from DRC. The region is known for using the proceeds from mining to fund rebel groups who kill and rape civilians.

To comply with the legislation, manufacturers must conduct a country of origin inquiry, file a public report for investors and carry out due diligence on their supply chains.

"Something of this kind or similar should be mandatory and it's actually not a too big burden for the firms," Blome said.

A report by the University of Sussex, for which Blome was the lead author, said that the average cost of implementing the OECD guidance for 29 European companies analysed in the study was 0.0002 percent of their annual sales.

He said sharing databases of certified suppliers was essential to stopping the trade in conflict minerals but many companies were unwilling to share trade information with others.

"You don't want to share (suppliers' list) because that's kind of how you do business so there is no real interest to share it," said Blome.

"The willing companies, and those who understand that this is a material issue, they will do that, but the majority won't (and) would only do that if they are kind of enforced to do so." (Reporting by Magdalena Mis; Editing by Katie Nguyen; Please credit Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, corruption and climate change. Visit news.trust.org)

By Magdalena Mis

Reuters