Media outlets are abuzz following a joint investigation report released by Amnesty International and African Resource Watch (Afrewatch) on January 18th titled “This is What We Die For: Human Rights Abuses in the Democratic Republic of Congo Power the Global Trade in Cobalt”. The report investigated human rights violations in the cobalt supply chain and rebuked several big brands, like Apple and Samsung, for failing to ensure that their products do not contain cobalt extracted by children in the DRC. In this post, we discuss the regulation of cobalt (or lack thereof), examine the report’s findings and discuss the potential supply chain brand risks associated with DRC-originated cobalt.
Confronting the ethical and humanitarian issues that could be hiding in the shady nooks of your end-to-end supply chain is neither easy nor enjoyable to think about. Yet, for the sake of your business’s brand and operations, it’s a necessary inspection. Due to a lack of supply chain visibility, some businesses are caught off guard when accused of using conflict minerals from unverified sources or utilizing slave labor at some stage of production – activities which may have transpired at a sub-tier level despite the company’s efforts to prevent them. With a greater public focus on corporate social responsibility, the widespread use of social media, and the advent of better technology for mapping sub-tier supplier visibility, businesses need to take a deeper look at the inner-workings of their supply chains to avoid the wrong attention.
In this post, we explore three modern supply chain brand risks that could be sabotaging your supply chain without your knowledge: counterfeit materials and products, slave labor and human trafficking, and conflict minerals.
Intel Corp. earlier this year introduced its first conflict-free microprocessors, and promised to extend its conflict-free program to its entire supply chain and all its product lines. And, a few weeks ago, news reports coming out of England and papers such as The Guardian announced the availability of Fairphone, a crowd-funded conflict-free smartphone that was designed to meet stringent ethical and environmental standards and is being dubbed by some as “the most ethical mobile handset on the market.”and conflict minerals compliance bar inches higher.
We expect to see more announcements like these in the coming quarters as companies look to carve out competitive advantages from their latest corporate social responsibility program.
You may have noticed the phrase “conflict minerals” constantly popping up in the business-world
vernacular lately. But are you still scratching your head trying to understand what all the noise is about and what it means to you?
Welcome to the club.
Now that the first round of reports tracing conflict minerals has been filed, companies want to know where to go next. They are looking for ways to improve their ongoing monitoring process, get better data from more suppliers and improve their overall compliance status.
The U.S. Commerce Department's list of smelters may help companies track 3TG, but perhaps not as much as expected.
The U.S. Department of Commerce recently published its much-awaited list of all know smelters and refiners known to process tantalum, tin, tungsten or gold, the so-called conflict minerals.
By now, most people working in the supply chain industry know all too well about the Dodd-Frank Wall Street Reform and Consumer Protection Act and the U.S. Security and Exchange Commission’s provision requiring tracking and tracing conflict minerals.
But, even the most knowledgeable people working day-in and day-out with the regulation and its related compliance issues are still confused and frustrated by the whole thing, especially those in the high-tech and automotive sectors who have been most directly affected.
This was apparent at the recent IPC Conflict Minerals Conference held in Santa Clara, California. Industry executives, well-versed lawyers and compliance-solution providers openly voiced their concerns, doubts and worries about the scope of the law, its inherent complexity, ongoing compliance issues and program maintenance.
It was the headache most supply chain professionals expected it to be. The first year of conflict minerals reporting required by U.S. Security and Exchange Commission (SEC) brought with it frustration, confusion and varying levels of compliance.
We’ve seen first hand and heard anecdotally about all sorts of challenges related to regulatory compliance, legal interpretations (or misinterpretations), source of origin identification, and tracking the red-flag 3TG minerals of tin, tantalum, tungsten and gold coming from or around the Democratic Republic of the Congo (DRC).
It’s been a roller-coaster year, and very few companies have been able to achieve full compliance with year one conflict minerals reporting. In fact, a majority of report filings did not even satisfy the SEC’s instructions, according to an analysis by global professional services firm Resources Global Professionals, something Kevin Deely, RGP’s senior practice director for supply chain risk and compliance, will discuss in more detail during our upcoming webcast.
When you have more than 20,000 customers worldwide, your supply chain can’t fail. Juniper Networks Inc. knows this all too well. In the high-tech industry, operational excellence and superior supply chain performance are basic calling cards to success.