Q&A: How well do technology companies know their supply chains?

In "Conflicted: The Fight Over Congo’s Minerals," Fault Lines asks if a law lobbied for by Western consumers and advocacy groups brought peace to miners in eastern Congo—or if it instead caused more problems for people in the region. The film airs on Sunday, Nov. 15, at 9 p.m. Eastern time/6 p.m. Pacific on Al Jazeera America. | Click here to find Al Jazeera in your area.

Twenty-four trillion dollars worth of minerals lie beneath the surface of the Democratic Republic of the Congo, the country that comes in at number 186 out of 187 countries in the United Nations Human Development Index.

That rank is partly the result of a five-year war, lasting from 1998 to 2003, that is believed to be the most violent since World War II. Armed groups are still a presence in Congo, and about a decade ago, humanitarian aid organizations in the West realized that militias were presiding over many of the mineral mines, threatening workers, taxing output, forcing children to work and committing various human rights atrocities.

A sustained campaign took hold on the Internet and on college campuses around the U.S. to push for Congo’s minerals—especially the so-called 3Ts, tantalum, tin and tungsten, which often end up in electronics made by companies like Apple, Intel and Motorola—to be certified conflict-free.

In 2010, a resolution known as 1502 was added to the Dodd-Frank Wall Street Reform and Consumer Protection Act. It called for companies relying on minerals from Congo to ensure that they were mined free from the presence of armed groups. Over the past five years, 160 mines in the eastern region of the country have been certified conflict-free, and their wares carry tags with numeric codes to signal that they meet the new standards.

"Fault Lines" recently traveled to Congo and found that while the presence of armed groups seems to be down, miners are losing work and money as a result of the new regulations. Also, smuggling appears to be rampant, as minerals from uncertified mines are still able to make it out of Congo and onto the international market.

Sophia Pickles is a senior campaigner with Global Witness, a London-based non-profit that advocates for full transparency in the mining, logging, oil and gas sectors. She has herself documented fraud and illegal activity within the supply chain in Congo, but holds firm that the legislation was a crucial step toward pushing U.S. companies to pay attention to the impact of their sourcing on mining communities. 

"Fault Lines" spoke to Pickles about some of the challenges involved in implementing Dodd-Frank Section 1502 in Congo. An edited version of that conversation follows:

How did you feel when the law was passed and what did you hope it would achieve?

When the law was passed, it was the first piece of legislation to require U.S. listed companies to look along their supply chains and ensure that they weren't funding harm with the metals or minerals that they used or traded. And so for us, it was really a hopeful step that would mean for Congolese people who live in very, very rich mining areas, where we work a lot of the time, there might be an opportunity to help break some of those links between the armed groups that are in some of those communities and the influx of supply chains. So as a first step, it was a very important step towards reform.

What's the feeling now that it's been almost five years since the law was passed?

It's a very complicated picture, and there are a lot of push and pull factors going on. In particular, we’re still seeing a problem with impunity amongst the army. So at mine sites quite often diggers will tell me, or miners will tell me, that there are still members of the Congolese Armed Forces who are taxing mines or who are taxing trading routes or who turn up on a periodic basis and demand money from the diggers.

The Congolese government has a really, really important responsibility here to make sure that the members of its own army are not behaving with impunity. This impunity has to stop. Otherwise, not only does it jeopardize all of these international efforts to reform the mineral supply chains, but it also poses a really serious threat to longer term stability in the region.

What we have seen on the positive side is that Section 1502 has really created momentum behind the Congolese government introducing its own laws that require companies to behave responsibly when resourcing minerals.

So we were just in eastern Congo, and one thing we heard a lot from miners and people across the board was there's a sense of frustration about this de facto embargo that came into place after Dodd-Frank Section 1502 was passed. They say they're still recovering from its impact. What are your thoughts on this?

I think it’s unfortunate when Section 1502 was passed that many companies took the decision that the easy way out was to stop sourcing from the region. Section 1502 is not an embargo. It doesn't tell companies to avoid Congo. It asks companies to look at their supply chains and ensure that they're being responsible.

So what we want to see is responsible sourcing. That means you stay engaged in high risk areas, but it means that you do it responsibly. And by responsibly, I don't just mean avoiding conflict or human rights abuses. I mean the whole thing. I mean making sure that the people that you're buying from are treating diggers fairly. I mean ensuring that you're not also engaged in environmental abuses. So really Section 1502 has been the starting point for companies getting to know their supply chains much better and also having to face up to a lot of the realities that previously they haven't had to.

Can you talk about how the law was written versus how it was interpreted? Was tagging part of the law?

So some companies have adopted an over-stringent interpretation of the law and have said that they will only buy material from the 10 countries that are covered by Section 1502 if they have got a tag affixed to the minerals. And that's not what the law actually requires. The law requires companies to do what is known as “due diligence,” which is a series of supply chain checks.

So the tagging is effectively a safeguard for some companies. Some companies feel that it brings an extra level of comfort. Some companies interpret the tagging as being able to eliminate risk from their supply chain. And I think that's a really important thing because when you're working in a conflict-affected or a high risk area like Congo or like many other places in the world, eliminating risk is really not a possibility.

So the message we're trying to send to companies is that they need to become comfortable with being responsible about their own supply chain. That doesn't mean that you can 100 percent eliminate all of the risk, but it means that when you find a risk, first, you identify it, then you address it. And you have to be realistic about how you deal with it. In some cases, you will be able to mitigate the risk. In other cases you will find that you've met with something that's so egregious that you have to not source from that particular mine site. But it's really about the level of detail and the level of responsibility that companies are willing to take.

Another criticism we heard from miners and exporters about the tagging system is that it’s very expensive and that the price gets passed down to the miners.

The prices from what I've been told by diggers appear to change from mine site to mine site and also seem to fluctuate with the price on the international market. What we want to create is a system where the artisanal diggers are benefiting from the minerals, and so that shouldn't mean an over-burdensome scheme. It should mean, if there's going to be a scheme in place, it's one that should work for the diggers as well as work for international companies.

And so really what we'd like to see is those benefits from Congo's vast, vast mineral wealth being shared more equitably along the supply chain. In order to have a responsible supply chain, we also have to factor into that how the diggers are being treated. And that's what responsible sourcing should really be about. Of course it's about breaking the links between minerals and conflict, but it's bigger than that. It's much more holistic than that. And that's what we would like to see companies working towards.

Those mining communities are amongst the poorest places that I've ever been to. People who don't have any water, certainly don't have any electricity, barely have a bed. They work seven days a week in very, very difficult conditions, and I think it's really time that they got something back.

The smelters and the refiners, the metal processors, are often referred to as “choke points” in the supply chain. What is the conflict-free smelting initiative?

All of the minerals that come from any mine, whether you're in Colombia or Afghanistan or Congo, go through a metal processor. So they come in huge containers of tons and tons at a time and then they are melted down and refined and turned into metal that industry can use for manufacturing for products.

So the conflict-free smelter program is a program which is attempting to draw together smelters and to understand what they are doing to manage their own supply chains and to certify them as conflict-free or not. It’s an industry program and it's a way of helping companies, smelters and refiners do their due diligence. But the bottom line remains that under the current conflict-free smelter program initiative, the smelters and refiners themselves do not appear to be really getting a handle on their own supply chains. 

The next step must be for those smelters and refiners to publish what they've done. It has to be made transparent, and we need to be able to see it and scrutinize it. Otherwise how can we know if they are really checking what's happening along their supply chain or not?