Responsible sourcing of metals: certification approaches for conflict minerals and conflict-free metals

Business enterprises involved in the exploitation of mineral resources originating from conflict zones are at risk of financing armed activities and fuelling systematic violations of international law and human rights abuses. This article first analyses the initiatives developed by the UN and OECD aimed at encouraging companies to respect human rights and avoid contributing to conflict by adopting “supply chain due diligence” practices. Second, it focuses on a recent Regulation adopted by the EU to tackle trade in certain minerals sourced from conflict-affected and high-risk areas in order to highlight its main positive aspects and challenges and, at the same time, to ascertain whether and to what extent this new legislation is consistent with the UN/OECD international standards on responsible sourcing.

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Transparency in extractive industry commodities trading

10.35188/unu-wider/2020/929-7 ◽

2020 ◽

Author(s):

Olle Östensson

Keyword(s):

Financial Management ◽

Extractive Industry ◽

Market Participants ◽

Conflict Minerals ◽

Public Financial Management ◽

Almost All ◽

The Cost ◽

Positive Effect ◽

Responsible Sourcing

The paper reviews the debate about transparency in extractive industry commodities trade. It examines the obstacles to improved transparency. A critical review of the experience with estimating losses from a lack of transparency concludes that many of the published estimates of losses from transfer mispricing and misinvoicing suffer from methodological deficiencies and appear to be exaggerations. The role of finance in extractive commodities trade is briefly discussed and it is noted that lending to companies owned by the state may affect the government’s standing with donors and investors. The most important transparency and responsible sourcing initiatives are reviewed. The initiatives appear to have had some positive effect on public financial management, investment climate, and economic growth. The experience of government-initiated responsible sourcing, including for conflict minerals, concludes that initiatives must include all or almost all market participants and that the cost of due diligence be equitably shared. Finally, a number of recommendations are made.

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Conflict minerals and battery materials supply chains: A mapping review of responsible sourcing initiatives

The Extractive Industries and Society ◽

10.1016/j.exis.2021.100935 ◽

2021 ◽

pp. 100935

Author(s):

Raphael Deberdt ◽

Philippe Le Billon

Keyword(s):

Supply Chains ◽

Battery Materials ◽

Conflict Minerals ◽

Mapping Review ◽

Responsible Sourcing

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International Trade in Conflict Minerals: Solutions for the EU Regulatory Framework

Studia commercialia Bratislavensia ◽

10.2478/stcb-2014-0059 ◽

2015 ◽

Vol 7 (28) ◽

pp. 620-629

Author(s):

Zuzana Silná ◽

Zuzana Kittová

Keyword(s):

International Trade ◽

High Risk ◽

External Action ◽

Wall Street ◽

Conflict Minerals ◽

The Us ◽

Legislative Proposal ◽

Risk Areas ◽

The Eu ◽

Responsible Sourcing

Abstract International trade in minerals, particularly tin, tungsten, wolfram, and gold, from conflict- affected or high-risk areas can have significant implications on intensifying and perpetuating the conflicts. It occurs that illegal mines are run by armed groups. As a result, minerals acquired from such sources provide financial means to armed movements and support the conflict. In this respect, several international and national regulatory frameworks for responsible sourcing have been established. The most important international initiative is the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, which provides importers with voluntary guidelines for responsible sourcing policy. In addition, the US passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. Section 1502 of the Dodd-Frank Act lays down the rules for responsible sourcing that are compulsory for any company listed on the US stock exchanges. Following to these initiatives and further public consultations, the European Commission and the European External Action Service introduced a proposal for a comprehensive EU policy focused on responsible sourcing of conflict minerals. The package consists of a legislative proposal laying down rules for self-certification of responsible importers, as well as of additional measures providing for support for SMEs and incentives for importers of conflict materials. The aim of this paper is to analyse the legislative proposal and discuss its possible implications given the fact that the EU legislation should be compatible with standing frameworks.

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Jumping the Chain: How Downstream Manufacturers Engage with Deep Suppliers of Conflict Minerals

Resources ◽

10.3390/resources8010026 ◽

2019 ◽

Vol 8 (1) ◽

pp. 26 ◽

Cited By ~ 6

Author(s):

Steven Young ◽

Shannon Fernandes ◽

Michael Wood

Keyword(s):

Supply Chain ◽

Supply Chains ◽

Cultural Distance ◽

Raw Materials ◽

Line Of Sight ◽

Due Diligence ◽

Descriptive Data ◽

Conflict Minerals ◽

Critical Raw Materials ◽

Responsible Sourcing

Global manufacturing firms are engaging distant suppliers of critical raw materials to participate in responsible sourcing. Downstream firms are concerned about risks in mineral supply chains of violent conflict, human rights violations, and poor governance, but they are limited in seeing their suppliers. Descriptive data on 323 smelters and refiners of tantalum, tin, tungsten, and gold (the “conflict minerals”) were complemented by interviews with downstream firms in the electronics industry. Results provided a narrative of supplier engagement, describing tactics used to identify “deep suppliers” at chokepoints in metals supply and to persuade producers into joining due diligence programs. Top-tier firms collaborate through a standards program to overcame barriers of geography and cultural distance in supply chain management beyond the visible horizon. Curiously, manufacturers do not need line-of-sight transparency to lower-tier suppliers. Rather, top-tier firms are “jumping the chain” to engage directly with “deep suppliers” who may—or may not—be their own actual physical suppliers. The research contributes empirical evidence to understanding multi-tier supply chains, examines how power is exercised by top-tier firms managing suppliers, and provides insights on supply chain transparency. Responsible sourcing, based on due diligence guidance and standards, is becoming expected of companies that are involved in supply chains of raw materials.

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