Hewlett Packard (HP) requires its suppliers to conduct their worldwide operations in a manner that respects labour standards and human rights, including sourcing minerals that do not directly or indirectly finance armed groups. HP’s approach to addressing conflict minerals within its supply chain is based on four key components: - “Tracing the metal to the source”: Active participation in the Electronics Industry Citizenship Coalition (EICC) – Global e-Sustainability Initiative (GeSI) Extractives Work Group and the development of an industry-wide supplier survey tool to identify smelters within supply chains to identify the mines from which these smelters source their minerals - “Developing a conflict-free smelter validation program”: Collaboration with the EICC-GeSI Extractives Work Group to develop audit protocols for smelters and to improve understanding of how smelters operate - “Establishing an in-region mineral certification system”: Financial support for the International Tin Research Institute (ITRI) Tin Supply Chain Initiative (iTSCi), which is developing a certification scheme to trace cassiterite from the mines to smelters. HP is also engaging with a range of stakeholders to identify enhancements to the certification scheme and support a market driven mineral development programme in the Great Lakes Region - “Influencing policy and legislation”: Support for the development and implementation of US legislation (including the Dodd-Frank Wall Street Reform and Consumer Protection Act) to address conflict minerals. HP has also contributed to the Organisation for Economic Co-operation and Development’s (OECD) Due Diligence Guidance

www.hp.com

Japan-based Senju Metal Industry Co. (SMIC), which makes products for the electronics and machinery sectors, supports Electronics Industry Citizenship Coalition (EICC) efforts to address conflict minerals within supply chains. This includes third-party auditing as required by the EICC, the provision of the names of its base metal smelters and information on the traceability of its “tin base metal”. Senju Metal has confirmed with “all of its tin (Sn) base metal sourcing companies and its smelters” that their minerals are conflict-free. Senju Metal has also conducted on-site audits of tin sourcing companies and smelters. These verified that none of the raw materials used by Senju Metal have originated in DR Congo or “its surrounding conflict regions”. The company notes that it will discontinue the purchase of any raw materials found to have originated from this area.

www.senju-m.co.jp

Calvert Investments has supported “public policy initiatives and direct engagement efforts” to promote transparency within supply chains and ensure companies are not fuelling conflict in DR Congo. This includes, for example, helping draft an investor response to the Securities and Exchange Commission (SEC)’s proposed implementing rules for those provisions of the Dodd-Frank Act relating to conflict minerals. This emphasises the need for “investors to be provided with valuable and consistent disclosure that is necessary to make informed investment decisions”. Calvert has also stated its support for Californian legislation prohibiting state contracts with companies that fail to comply with federal reporting requirements on conflict minerals. In addition, Calvert has worked with other ethical investors, NGOs and companies to “leverage our collective influence” in addressing human rights and labour abuses in DR Congo. This includes research and development of relevant best practices policies and procedures. Although Calvert’s initial efforts were focused on the electronic industry, it has expanded its focus to include the medical device, aerospace and defence, and automotive sectors.

www.calvert.com

US-based technology company Dell states that it is a violation for suppliers to purchase minerals from known conflict zones in the DR Congo. The company requires its suppliers and sub-suppliers to uphold the code of ethical conduct put forth by the Electronics Industry Citizenship Coalition (EICC). According to its website, Dell carries out “dozens” of audits each year – through its internal audit programme and the EICC joint audit programme – to make sure the code is upheld. Nonetheless, the company notes that it cannot currently guarantee that their components are free of conflict mineral. This is due to the difficulty of tracing minerals through the many layers between original source mines and the final products. In addition, the smelting of minerals together – as well as the recycling of materials – likewise makes it difficult to identify the original source of the minerals they use. Despite this, the company is taking proactive steps towards ensuring a conflict-free supply chain. Actions include: - Engagement of competitors in 2009 on the issue of conflict diamonds – and the subsequent joint-establishment of a cross-industry working group aimed at finding market-based solutions to the issue - Participation in the extractives working group of the Electronics Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI) – as well as support for two pilot programs in DR Congo (one for tin and one for tantalum) aimed at certifying exploitation-free metal supplies - Commissioning (via the working group) of a traceability study of the electronics supply chain by US non-profit organisation RESOLVE - Participation in a working group led by As You Sow, a corporate-accountability non-profit organisation. This aims to pull together all current efforts to address conflict minerals to promote best practice - Public support of legislative efforts in the US to address conflict minerals

www.content.dell.com

Intel expects its employees and suppliers to comply with the Electronics Industry Citizenship Coalition (EICC) Code. Intel also expects its suppliers to ensure that their suppliers abide by the EICC Code. The EICC Code includes performance, compliance, management system, and reporting guidelines, as well as assessment and audit procedures, across key areas of social responsibility. In 2010, Intel took a number of actions to address conflict minerals within its supply chain. Key actions include: - Completion of on-site reviews of 25 smelters in eight countries (including Bolivia, Canada, China, Indonesia, Malaysia, Peru, Thailand and the US). Although other companies have since joined in these visits, Intel was the first company in the electronics supply chain to conduct on-site smelter reviews. These smelter reviews helped lay the ground for the Electronics Industry Citizenship Coalition (EICC) to develop and implement a process for independent third-party smelter audits - Direct engagement with stakeholders in DR Congo, including engagement with local groups and work to understand local challenges relating to traceability. The company has also communicated its relevant requirements through a survey on conflict minerals sent to all suppliers in 2009 – and its engagement with NGOs on the issue is ongoing - Collaboration in multipartite efforts to address conflict minerals, including the EICC and the Global e-Sustainability Initiative (GeSI) Working Group on extractives (including help in the development of a tantalum audit protocol). Intel also hosted and co-chaired “the first industry-wide meeting with the tin supply chain, and financially supported the tin industry’s efforts to create a traceability system of metals coming from the region” - Implementation of the Conflict-Free Gold Sourcing Summit in March 2011 with members of the World Gold Council and the Responsible Jewelry Council (to share its experience from the EICC smelter audit program) - Sharing of experience and knowledge “to inform government efforts, both directly and through industry collaborations”

www.intel.com

Motorola notes that it requires “high labor and environmental standards in our own operations, and make concerted efforts to drive improvements. We expect our suppliers to do the same, as reflected in our supplier code of conduct”. Motorola is collaborating with others in the sector to address challenges around conflict minerals (including traceability and tracking) through the Electronics Industry Citizenship Coalition (EICC) and Global e-Sustainability Initiative (GeSI). Recent progress achieved by the company includes the implementation of a rigorous material declaration process to help it “better understand the applications of many different types of metals, including metals associated with the conflict in the DRC”. It has also been active in raising awareness about the issue within the electronics and beyond – including through participation in industry groups and supply chain meetings – and in integrating conflict-free sourcing requirements into its supplier agreements. Motorola has had co-leadership of the GeSI and EICC extractives Working Group – which laid the ground for the Conflict-Free Smelter Program. The company has, through the Motorola Foundation, provided a US$30,000 grant to support traceability work at the International Tin Research Institute (ITRI) via its Tin Supply Chain Initiative (iTSCi). In addition, Motorola participated in an iTSCi fact-finding mission to DR Congo and Rwanda to improve understanding of on-the-ground conditions there. The company has also been active in engaging stakeholders. For example, in 2010 this included workshops around the tantalum and tin smelter validation processes, participation in the development of the OECD’s due diligence guidelines, support for conflict minerals legislation in the US, co-sponsorship of multi-industry sessions involving, for example, the jewellery and automotive sectors, and engagement with NGOs. The company expressly recognises that “Tens of thousands of people in the [Great Lakes] region depend on legitimate artisanal mining and their livelihoods and the economic stability of the region would be threatened if the ICT industry stopped buying components that contain minerals from the region”. As a result, it is continuing to: - Participate in the Conflict-Free Smelter Programme - Support the iTSCi’s implementation of the In-Region Sourcing program - Develop a due diligence process for the sourcing of metals in collaboration with our industry partners

http://responsibility.motorola.com

All De Beers diamonds are certified to be conflict-free. The De Beers Family of Companies worldwide compliance with the Kimberley Process – as well as the supporting System of Warranties developed by the diamond industry – is third party audited. This excludes Element Six, Hindustan Diamond Company and De Beers Diamond Jewellers (DBDJ), which were independently reviewed. The Kimberley Process and System of Warranties form part of De Beers own Best Practice Principles (BPPs) – a mandatory code of business conduct adhered to by its joint venture partners, contractors and Sightholders (i.e. purchasers). The BPPs requires the recording of all Kimberley Process certificates and System of Warranties invoices received and issued when buying or selling diamonds. There were no material breaches relating to the Kimberley Process identified for the De Beers Family of Companies or its Sightholders in the 2010 BPP assurance cycle.

www.debeersgroup.com

South African mining company Gold Fields has made it clear that it intends to build on the Chain of Custody and Conflict-Free Gold Standards (the two existing components of the World Gold Council’s Responsible Gold initiative) through the development of relevant internal policies and management systems. The success of the initiative will be contingent on close cooperation between gold producers and refineries due to the need to assure the entire chain of custody. Because of this, Gold Fields 34.9%-holding in South Africa’s Rand Refinery means it is well positioned to play a key role in the success of the initiative. The Rand Refinery processes 75% of all the gold produced in Africa –. Like Gold Fields, the Rand Refinery has pledged its support for the Responsible Gold initiative. Under the initial application of the standards, gold producers are requested to include a warranty on all waybills and pro-forma invoices to warrant that their gold has been produced in a responsible manner. Gold Fields has already started this process, authorising its first waybill in compliance with the standards in January 2011 for nine bullion bars processed through the Rand Refinery.

http://overendstudio.co.za

The International Tin Research Institute has worked with leading tin smelting companies to implement the first phase of a comprehensive due diligence programme for application to minerals from DR Congo. The ITRI Tin Supply Chain Initiative (iTSCi) scheme aims to improve transparency in the supply chain and complement relevant national and international government initiatives. It was developed by a working group that includes Thailand Smelting & Refining Co Ltd and Malaysia Smelting Corporation Berhad. In turn, they have a number of suppliers participating in the programme, including BEB Investment, Comptoir Panju, CR Central Africa, Metmar, Minerals Supply Africa, Refractory Metals Mining, Tengen Metals, Trademet, Traxys and T.T.T. Mining. The initial phase of the scheme is focused on the relationships between exporters from DR Congo to the smelter – introducing due diligence procedures to ensure the legitimacy of suppliers and their minerals. In the second phase (initiated in 2010) focus is being placed on “collating upstream supply chain information from mine to exporter/comptoir”. This includes the tracking of minerals and the provision of verifiable provenance information from individual mine sites in eastern DR Congo –something that has hitherto not been possible. The third phase will focus on “supply chain performance standards and ratings that will allow both qualitative and quantitative assessment of a range of factors at each level of the supply chain”.

www.itri.co.uk

In its 2012 Conflict Minerals Company Rankings, humanitarian NGO ‘Enough!’ described Nokia as ‘exercising leadership’ in its industry-wide efforts to eradicate the use of conflict minerals in electronics products. As part of its policy, Nokia, among other things, demands due diligence from direct suppliers, requires suppliers to map out their supply chains, and engages in training and awareness campaigns with suppliers. The aim of these initiatives is to achieve maximum traceability to at least the smelting level. In addition, Nokia also reserves the right to demand evidence of compliance down to mine level if necessary and supplier traceability data must be kept for five years and be available upon request. In order to engage in similar industry-wide efforts, Nokia is also party to the Global e-Sustainability Initiative (GeSI) and the Electronics Industry Citizenship Coalition (EICC) (and their joint Extractive Work Group), the due diligence guidelines of the Organisation for Economic Co-operation and Development (OECD), and the US State Department’s Public-Private Alliance for Responsible Minerals Trade.

http://www.nokia.com

http://www.nokia.com

Electronics company Philips, as well as being party to the Electronic Industry Citizenship Coalition (EICC), and its joint Extractive Work Group with the Global e-Sustainability Initiative (GeSI), participates in the ‘bagging and tagging’ programme of the ITRI Tin Supply Chain Initiative (iTSCi), by which minerals can be traced from mine to smelter. In addition, in 2010, Philips joined forces with others from the tin and tantalum industry, to finance “a pilot to track minerals and provide verifiable provenance information from individual mine site in eastern DRC”.

http://www.philips.com

According to the 2012 Conflict Minerals Company Rankings, published by humanitarian NGO ‘Enough!’, data storage company SanDisk has become a top-tier ranking electronics company in its effort to use conflict-free minerals. Initiatives which helped it achieve this status include a supply chain conflict mineral tracing survey (which received a 100% response rate on several disclosure levels), supplier auditing, an enhanced supplier selection process, active involvement with the Electronic Industry Citizenship Coalition (EICC), and its joint Extractive Work Group with the Global e-Sustainability Initiative (GeSI), and the publishing of the names of smelters in its supply chain, the first company to do this.

http://www.sandisk.com

In April 2013, HP published a list of all 195 “tantalum, tin, tungsten, and gold smelters/refiners” within its supply chain. It is the first information technology company to publish such a list – which has been independently reviewed. HP says that the move is indicative of its efforts to encourage suppliers “to become conflict-free smelter (CFS) certified” and for the entire industry to make greater use of conflict-free smelters and refiners.

HP is believed to have one of the most extensive supply chains in the industry, made up of more than 1,000 production suppliers and “tens of thousands” of non-production suppliers – all of which span “more than 45 countries and territories”. Sasha Lezhnev, senior policy analyst at the Enough Project, is reported as saying: “Just a year ago, companies were afraid of publishing lists of smelters, but this added layer of transparency can help get our consumer products to be conflict free."

http://www8.hp.com

In 2011, Motorola Solutions and AVX Corporation (a leading producer of tantalum capacitors) launched the ‘Solutions for Hope Project’ as a pilot initiative to source conflict-free tantalum (which is derived from coltan) from DR Congo. This was with the aim of ensuring that Section 1502 of the US Dodd-Frank Act did not have the unintended consequence of inducing an effective embargo of Congolese metals by US companies keen to avoid contact with conflict minerals – something that could otherwise have potentially serious economic consequences for individuals in the country who rely on legitimate coltan mining for their living.

The initiative uses a fully-defined, ‘closed-pipe’ supply chain – including artisanal cooperatives and mines, smelters, component manufacturers and end users. It is an open initiative, to which other parties can apply to join. Participating companies include Foxconn, HP, Intel, Nokia, Motorola Mobility, Motorola Solutions, Research In Motion, Mining Minerals Resources (MMR), AVX and Coopérative Des Artisanaux Miniers du Congo (CDMC). In January 2012, the pilot initiative was found to be reliable – and it has been transitioned into a sustainable, long-term project.

The pilot process was based on the following steps:

·       Minerals are extracted from concessions in the north of Katanga province owned by Mining Minerals Resources SPRL (MMR), which has contracted Coopérative Des Artisanaux Miniers du Congo (CDMC) to manage artisanal miners at the mines

·       The extracted minerals are weighed and logged as part of the ITRI Tin Supply Chain Initiative and are also logged by local government agents

·       The minerals are transported to an MMR depot, at which point AVX takes ownership – paying global market prices

·       The minerals are transported to the F&X Electro-Materials Limited (F&X) smelter in Guangdong, China

·       The resulting tantalum powder and wire is shipped to an AVX facility in the Czech Republic to be made into tantalum capacitors

·       The capacitors are shipped to end-users, including Motorola Solutions, HP, Intel, Nokia, Foxconn and others, who incorporate them into their products

http://solutions-network.org

Apple has confirmed in its Supplier Responsibility Progress Report 2014 has confirmed that all “active, identified tantalum smelters in our supply chain were verified as conflict-free by third party auditors” – with efforts to achieve similar levels of assurance with respect to their tin, tungsten and gold supply chains. As part of the company’s efforts to “heighten smelter accountability”, the company also published (for the first time) a list of all smelters and refiners in its supply chain – and the respective verification status of each. A total of 64 suppliers of tantalum, gold, tungsten and tin have been designated ‘conflict-free’ – with another 23 agreeing to future audits. This leaves, however, more than 100 suppliers whose status is not clear – including gold and tin suppliers in countries such as China, Indonesia and Russia. Apple is working with a range of stakeholders in its efforts to ensure all of its mineral supplies are conflict-free, including the following:

• Conflict-Free Sourcing Initiative (CFSI)
• Conflict-Free Tin Initiative (CFTI)
• Electronics Industry Citizenship Coalition (EICC)
• ITRI
• Enough Project

http://images.apple.com

In September 2012, Philips and Tata Steel became the first companies to join the Conflict-Free Tin Initiative (CFTI), an auditing programme administered by the Dutch government. The CFTI aims to demonstrate that it is possible for companies to source conflict-free tin from DR Congo, in accordance with the US Dodd-Frank Act, by relying on comprehensive traceability mechanisms. CFTI has implemented a scheme at verified tin ore mines in Sud-Kivu province, where small plastic tags are attached to sealed bags of ore. The tags contain a barcode that corresponds to a certification document, enabling the ore to be legally exported with a conflict-free ‘passport’. CFTI says that the ‘bag and tag’ scheme proves that traceability is possible, even in the most challenging regions such as Sud-Kivu where ethnic and militia violence is widespread. At a time when many multinationals are shying away from DR Congo to avoid legislative risks, companies such as Philips and Tata Steel are able to use CFTI-certified tin in their end products – thereby continuing to contribute to socio-economic development in one of the most deprived regions of the world.

Philips

Reuters

Solutions Network

In February 2014, multinational technology company Apple announced that it was planning to publish a list every quarter with the names of the smelters used by its suppliers for tin, tantalum, tungsten and gold. The move follows the publication one month earlier of the company’s Supplier Responsibility Progress Report 2014 (see case study above). The new list shows where the smelters operate and whether they are compliant with Apple’s ethical sourcing guidelines (and therefore verified by the company as ‘conflict-free’) Apple’s latest Quarterly Smelters List, published in May 2014, found that 75 smelters were compliant. Apple hopes that this increased public scrutiny will encourage its suppliers to avoid smelters that source conflict minerals in their supply chains. Indeed, the number of smelters deemed ‘conflict-free’ was 75 in Apple’s May 2014 list, up from 59 in its February 2014 list. The majority of smelters used by Apple’s suppliers, however, remained non-compliant with the company’s ethical sourcing guidelines. Yet, rather than simply avoiding doing business with companies operating in high-risk countries such as DR Congo, Apple insists that it wants to go further by working with its suppliers that use unverified smelters in order to encourage improvements in their sourcing practices.

Apple

In May 2015, Dutch technology company Philips publicly called for the development of an EU initiative on conflict minerals that places emphasis on both due diligence and risk mitigation. Philips argues that MNCs should continue to be encouraged to carry out supply chain due diligence to understand if and how they might be connected to conflict, and how they can maximize their leverage to do good.

http://www.philips.com