Tantalum and Section 1052: these two very obscure terms are getting a lot of attention from over 6,000 U.S. and global companies these days, especially from those in the electronics sector. Section 1052 is the clause of the Dodd-Frank Act that requires the SEC to issue disclosure and audit requirements for publicly traded companies that manufacture products containing conflict minerals. Under the new rules, companies must disclose whether tantalum, tin, tungsten, and gold mined in the Democratic Republic of Congo or an adjoining country are necessary to the functionality or production of the products they manufacture. Tantalum, along with gold, tin, and tungsten, is a metal essential to electronics. It has properties of corrosion resistance and conductivity that make it perfect for very small, very light, but very high-powered capacitors that power our laptops, tablets, and smartphones, our cars and medical devices.
There’s one big problem with tantalum: an increasing amount of its sourcing comes from the Democratic Republic of Congo. That links the metal to the worst documented conflict since World War II, a civil war that has resulted in over five million deaths since 1998. This compromised sourcing complicates the already difficult job of building a sustainable supply chain. Those issues include the global scope of manufacturing, the fragmentation of suppliers through multiple layers of subcontracting, corruption private and governmental, the costs involved, and an overall lack of transparency.
Sustainalytics, a responsible investment research firm that specializes in sustainable analysis, reports that the IT industry is well positioned to take the lead in addressing the problem of sustainable sourcing of conflict minerals, The evidence is compelling: companies like HP, Apple, Intel, Microsoft, Cisco, and Dell have introduced new, aggressive sustainability strategies to ensure compliance with the new SEC rules, and to underline their commitment to ethical sourcing practices. A common connection among them is participation in the Electronics Industry Citizenship Coalition and the Global e-Sustainability Initiative. GeSI has established the Conflict-Free Smelter program, a process for suppliers to become certified.
HP has just published a list of its supply chain’s 195 smelters who turn ore into metal, and that smelter identification process has been independently reviewed. Apple has identified 211 smelters and refiners from which its suppliers source tantalum, tin, tungsten, and gold. The company has also joined the Public-Private Alliance for Responsible Minerals Trade, a joint initiative among governments, companies, and civil society to support supply chain solutions to conflict minerals in the DRC. Intel has manufactured a microprocessor that is conflict-free for tantalum, and is working to manufacture the world’s first microprocessor validated as conflict-free for the four principal metals by the end of this year. The company has mapped 90% of its microprocessor supply chain, identifying 140 smelters. Besides the EICC and the GeSI, Intel also participates in the Conflict-Free Tin Initiative.
Cisco is active in the EICC and is requiring its suppliers to certify according to the CFS Compliant Smelter List. Dell is also engaged with the EICC and its CFS program. The company has hosted an international multi-stakeholder event on conflict minerals that convened leaders from the IT industry, NGOs and the Organization for Economic Cooperation and Development to encourage other industries to take action on responsible sourcing. And this year, Microsoft will include a summary of Environmental Social and Governmental information from its vendors in its annual Citizenship Report. The company is asking its suppliers to use Global Reporting Initiative guidelines in their sustainability reporting to ensure rigorous benchmarking of its supply chain.
We’re used to getting cutting edge products from the electronics industry. Now, they’re also delivering pioneering models of global CSR and sustainability strategies.
Article by John Howell, appearing courtesy 3BL Media.