IPC’s Tony Hilvers Comments on Recent Avnet Conflict Metals Editorial

Conflict Metals: Good Intentions Gone Tragically Bad

I am concerned that the article “Avoid Conflict: Comply With Dodd-Frank” by Gerry Fay, Senior Vice President, Supply Chain Solutions, Avnet Electronics Marketing is unduly optimistic about the electronics industry’s ability to immediately solve a long-standing social conflict that has resisted efforts by the International Conference on the Great Lakes Region (ICGLR), the U.S. State Department and the United Nations.

In his article, Fay writes: “The trade in conflict minerals provides rebels and criminal networks within the region with hundreds of millions of dollars a year. The electronics industry is in the unique position to significantly diminish the resources available to these brutal and corrupt forces.”

IPC has been working on this issue for the last two years and initially I thought the same thing. Just don’t buy minerals (metals) from the Democratic Republic of the Congo (DRC) and put the rebel mines out of business. Unfortunately, social responsibility issues are complex no matter how much we like to think or fervently wish there is a simple solution.

Yes, I will address the significant financial toll to the electronics industry on this issue. But here’s the dirty little secret — there’s a human toll to pay in “boycotting” the mines in the DRC. Consider the DRC’s tin mines.

The DRC’s tin mines account for roughly four percent of the global market for tin. And it’s estimated that about two percent of tin from the DRC has been identified as coming from conflict mines. Where does the other two percent of tin come from? The tin comes from many artisanal mines — mom and pop operations — whose wages support tens of thousands of people.

It’s tough, dirty work in these artisanal mines but it does provide a wage. Shut down these artisanal mines and what happens? Tens of thousands of miners in the DRC lose their jobs and most likely their only source of income. Starvation will probably follow. And make no mistake about it; the artisanal mines will be shut down.

There’s also a better than average chance that other countries surrounding the DRC will experience the flight from African minerals by the global business community. And then, these African countries, like Rwanda, will suffer greatly too.

So what’s causing this law of unintended consequences? Dodd-Frank legislation, passed this year as part of the Wall Street Reform and Consumer Protection Act, requires publicly traded companies to report to the U.S. Security and Exchange Commission (SEC) on their source of tantalum, tin, tungsten and gold.

Though the SEC is still working on the rules, even now requirements are flowing down through the entire supply chain and across all U.S. industry segments — from automotive manufacturers to construction equipment to electronics.

The enormity of this supply chain review and audit is breathtaking — significantly larger and more costly in scope than RoHS. While the SEC last year estimated the cost of implementation at $16.5 million, IPC in a survey to its members estimated the cost to the electronic interconnection industry alone to be $279 million in the first year of implementation.

What’s the answer then? Well, the law has been passed and the SEC is writing the rules to address sourcing conflict metals. For artisanal miners, the damage has been done. No OEM in their right mind (or members of their supply chain) will willingly source metals from Africa, let alone the DRC.

And quite candidly, no one will oppose the law. As you can see, this is a complex issue turned into sound bites by well-meaning non-governmental organizations using terms like “blood metals” and “bloodberry phones.” If you oppose the law, then obviously you support rape and murder in the DRC by the rebel miners and criminal networks. It’s a no-win position.

There was — and maybe still is — a responsible solution to the issue of conflict metals. Over the last three years, electronics industry groups and global metals associations have been working to “bag and tag” minerals from artisanal mines in the DRC. The DRC government supports this action as do other countries in the Great Lakes Region of Africa.

It’s not a perfect system, but it can work if it’s given time to be implemented. Unfortunately, the rush to source “conflict free” immediately can only serve to worsen the situation in the DRC. Right now, the only smelters that can be certified as “conflict free” are those that are not sourcing in the DRC or adjacent countries. We need to give these certification systems time to work.

Let’s face it; it seems nothing in the DRC is perfect or easy, even though we keep trying to legislate in order to make it that way.

Tony Hilvers, Vice President of Industry Programs
IPC

One Trackback

  1. […] IPC wishes to make clear that we share the world’s concerns about the human rights atrocities in the Democratic Republic of the Congo and supports efforts to bring peace and stability to the region. Unfortunately, due to the law of unforeseen consequences, we believe that the conflict minerals port… […]

Post a Comment

Required fields are marked *

*
*

%d bloggers like this: