Conflict minerals in the supply chain influence procurement. 

Why the name Conflict Minerals?

Deep in the heart of the African continent, there was a vast land rich in minerals and natural resources. Unfortunately, this abundance would eventually become a curse for its people, as the region’s resources would become the source of one of the deadliest conflicts in modern history.

The history of conflict materials can be traced back to the late 19th century when the Belgian King Leopold II exploited the region for rubber and ivory. The exploitation and mistreatment of the local population became known as the Congo Free State, where millions were killed or forced into slavery.

The conflict materials story continued in the 20th century when the region’s mineral deposits, including tin, tantalum, tungsten, and gold, were discovered. These minerals are critical components in the manufacturing of electronics, including cell phones, computers, and other consumer goods.

In the early 1990s, violent clashes broke out in the Democratic Republic of Congo (DRC), fueled by rebel groups, corrupt government officials, and foreign armies seeking control of the region’s mineral resources. The situation escalated into a full-blown war, which has claimed over five million lives to date, making it the deadliest conflict since World War II.

Rebel groups and military forces have used the proceeds from the sale of conflict minerals to fund their operations, buy weapons, and perpetuate violence in the region. The exploitation of the minerals has also led to human rights abuses, including forced labor, child labor, and sexual violence.

The Dodd-Frank Wall Street Reform and Consumer Protection Act

International efforts to address the conflict minerals issue gained momentum in the late 2000s, with the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act in the United States. The law requires companies to disclose the use of conflict minerals in their products and to trace their supply chains to ensure they are not supporting human rights abuses or armed groups.

While progress has been made, the conflict minerals issue is far from resolved. The DRC and neighboring countries continue to face instability and violence, and the exploitation of minerals remains a key driver of conflict.

The story of conflict materials is a tragic one, a tale of exploitation, greed, and human suffering. However, with continued efforts and international cooperation, there is hope that a brighter future can be created for the people of the region, where their natural resources can be used to benefit all, rather than fueling conflict and violence.

How to assure Conflict Minerals are considered in the supply chain.

Assuring that conflict minerals are avoided in the supply chain is a critical aspect of responsible sourcing and procurement. Here’s an outline of how a procurement professional can address this concern with a customer:

• Understanding Conflict Minerals: Conflict minerals, typically referred to as tin, tungsten, tantalum, and gold (3TG), originate from regions where their extraction and sale finance armed conflict and human rights abuses. The most noted area is the Democratic Republic of Congo (DRC) and its adjoining countries.
• Supplier Code of Conduct: Ensure all our suppliers adhere to a strict Code of Conduct that emphasizes ethical sourcing practices. This Code of Conduct explicitly prohibits the use of conflict minerals sourced from conflict zones. Suppliers are required to commit to this code before entering into any business relationship.
• Due Diligence Process: Implement a comprehensive due diligence process in line with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. This process includes assessing the source and chain of custody of these minerals to ensure they are conflict-free.
• Supplier Audits and Assessments: Regular audits and assessments of suppliers are conducted to verify compliance with our ethical sourcing policies. These audits are carried out by internal teams or third-party auditors with expertise in tracing and verifying the origin of minerals.
• Smelter and Refiner Verification: Utilize the Conflict-Free Smelter Program (CFSP) or similar programs to validate that smelters and refiners in our supply chain adhere to international standards for conflict-free sourcing.
• Transparency and Reporting: Commit to transparency in your supply chain practices. Provide annual reports detailing our efforts and progress in ensuring a conflict-free supply chain. These reports are available to your customers and the public.
• Stakeholder Engagement: Engaging with NGOs, industry groups, and other stakeholders is an integral part of your strategy. This collaboration helps us stay informed about best practices and emerging issues related to conflict minerals.
• Continuous Improvement: Recognizing that ensuring a conflict-free supply chain is an ongoing process, you are committed to continuously improving our policies, practices, and due diligence efforts.
• Employee and Supplier Training: Provide regular training to your employees and suppliers on responsible sourcing of minerals. This training includes information on identifying and mitigating risks associated with conflict minerals.
• Customer Assurance: Provide documentation and assurance to customers, upon request, about your efforts to avoid conflict minerals in our supply chain. This might include copies of our due diligence reports, supplier compliance certificates, and details of our auditing processes.

By implementing these measures, aiming to assure our customers that you are actively working to avoid the use of conflict minerals in our supply chain and are committed to upholding high ethical standards in your procurement practices.

Learn More about conflict minerals in the supply chain

Learn more about how conflict minerals in the supply chain influence procurement in the online course about Conflict Minerals for the Tactical buyer role. (15-20 minutes reading course). In the course you will learn more about the US and EU legislation, get examples of wording in a Supplier Code of Conduct and recommendations for further reading if you want to dive deeper in the topic and avoiding conflict minerals in the supply chain.

About Learn How to Source

Learn How to Source (LHTS) is an online platform based in Sweden, offering a range of procurement courses accessible globally. It serves as a community where procurement experts share their knowledge through online courses, designed for various experience levels from introductory to expert. Courses are concise, about 30 minutes each, and cover different aspects of procurement, tailored for different buyer roles. The courses focus on practical knowledge, presented by seasoned professionals, and includes quizzes and certificates. They can be accessed from any device, emphasizing micro learning for flexibility and efficiency. Hope you have enjoyed the blogpost Conflict minerals in the supply chain influence procurement.

Note: Illustration to the blogpost “Conflict minerals in the supply chain influence procurement” is created by CHAT GPT on February 27, 2024.

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