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How Supply Chains Shelter Corporations from Responsibility

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This story on cobalt miners for your phones is deeply disturbing.

The Post traced this cobalt pipeline and, for the first time, showed how cobalt mined in these harsh conditions ends up in popular consumer products. It moves from small-scale Congolese mines to a single Chinese company — Congo DongFang International Mining, part of one of the world’s biggest cobalt producers, Zhejiang Huayou Cobalt — that for years has supplied some of the world’s largest battery makers. They, in turn, have produced the batteries found inside products such as Apple’s iPhones — a finding that calls into question corporate assertions that they are capable of monitoring their supply chains for human rights abuses or child labor.

Apple, in response to questions from The Post, acknowledged that this cobalt has made its way into its batteries. The Cupertino, Calif.-based tech giant said that an estimated 20 percent of the cobalt it uses comes from Huayou Cobalt. Paula Pyers, a senior director at Apple in charge of supply-chain social responsibility, said the company plans to increase scrutiny of how all its cobalt is obtained. Pyers also said Apple is committed to working with Huayou Cobalt to clean up the supply chain and to addressing the underlying issues, such as extreme poverty, that result in harsh work conditions and child labor.

Another Huayou customer, LG Chem, one of the world’s leading battery makers, told The Post it stopped buying Congo-sourced minerals late last year. Samsung SDI, another large battery maker, said that it is conducting an internal investigation but that “to the best of our knowledge,” while the company does use cobalt mined in Congo, it does not come from Huayou.

Few companies regularly track where their cobalt comes from. Following the path from mine to finished product is difficult but possible, The Post discovered. Armed guards block access to many of Congo’s mines. The cobalt then passes through several companies and travels thousands of miles.

Yet 60 percent of the world’s cobalt originates in Congo — a chaotic country rife with corruption and a long history of foreign exploitation of its natural resources. A century ago, companies plundered Congo’s rubber sap and elephant tusks while the country was a Belgian colony. Today, more than five decades after Congo gained its independence, it is minerals that attract foreign companies.

This is just what is basically the abstract of a long report. The whole thing goes deep into the massive exploitation in the rare earth industry. Just a bit from the details:

The diggers are desperate, said Papy Nsenga, a digger and president of a fledgling diggers union.

Pay is based on what they find. No minerals, no money. And the money is meager — the equivalent of $2 to $3 on a good day, Nsenga said.

“We shouldn’t have to live like this,” he said.

And when accidents occur, diggers are on their own.

Last year, after one digger’s leg was crushed and another suffered a head wound in a mine collapse, Nsenga was left to raise the hundreds of dollars for treatment from other diggers. The companies that buy the minerals rarely help, Nsenga and other diggers said.

Deaths happen with regularity, too, diggers said. But only mass casualties seem to filter out to the scant local media, such as the U.N.-funded Radio Okapi. Thirteen cobalt miners were killed in September 2015 when a dirt tunnel collapsed in Mabaya, near the Zambia border. Two years ago, 16 diggers were killed by landslides in Kawama, followed months later by the deaths of 15 diggers in an underground fire in Kolwezi.

In Kolwezi, a provincial mine inspector frustrated by a recent run of accidents agreed to talk to The Post on the condition that he not be identified, because he was not permitted to talk to the media.

He met the journalists in a minibus — jumping in, closing the door and taking a seat in the middle, far from the tinted windows so no one on the street could see him.

That morning, he said, he had helped rescue four artisanal miners nearly overcome by fumes from an underground fire in Kolwezi. The day before, two men had died in a mining tunnel collapse, he said.

He said he had personally pulled 36 bodies from local artisanal mines in the past several years. The Post was not able to independently verify his claims, but they echoed stories from diggers about the frequency of mining accidents.

The inspector blamed companies such as Congo DongFang that buy the artisanal cobalt and ship it overseas.

“They don’t care,” he said. “To them, if you bring them minerals and you’re sick or hurt, they don’t care.”

I’m going to repeat what I’ve said many times: If you want to end these horrors, you hold the companies at the top of the supply chain legally responsible for those supply chains. Let’s say we did that? Would those companies abandon the Congo because of this? No, because they can’t. Two things would happen. One, they would make it in the interests of the Chinese company managing this to make sure basic human dignity is upheld in the mines. Or two, the companies themselves could pool together and start their own investment in the mines to ensure they complied with the law. In this case, there wouldn’t be anything particularly competitive about the issue as they all need the same minerals.

The Post report is correct: There is no reason to think that Apple and the other tech companies will monitor their own supply chains. Whenever corporations can avoid any costs, they will do so. Monitoring these mines to make sure Congolese miners don’t die is an avoidable cost. They will never do it effectively unless we as consumers make them do it. As I call for in Out of Sight, we must fight for what I name a Corporate Accountability Act that ensures essential human rights for workers no matter where they labor if they are working for an American company or in a supply chain for an American economy. This is the ONLY WAY we stop this. In this case, there is only one answer. It’s legal responsibility. If we don’t believe in this, then we also hold personal responsibility for dead Congolese miners.

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  • JonH

    It occurs to me that safer mining conditions might lead to more production (due to having larger, well-reinforced tunnels, lighting, equipment, etc). Which would raise supply and lower the price.

    Electronics manufacturers would like that, but the Chinese mine owners probably would not.

  • Brett

    Would those companies abandon the Congo because of this? No, because they can’t.

    I’d hope that isn’t the case, because if it is, then the companies don’t have the power to force the Chinese company to do anything – said company is the one sitting on access to the resources.

    As is, though, it sounds like they do have options. And the Post does mention that there’s a law in place that requires them to source from militia-free areas for many other minerals, which helps. That means they can make a credible threat to walk away from Congo production of the resources.

    • They definitely have options. It’s just very convenient for them not to explore said options.

    • njorl

      I think part of the problem is that there is significant legitimate cobalt production operation going on in the area. That makes it easy to blend in illegitimate production.
      Also, the legitimate production is very cheap. They refine tailings from copper mining to get the cobalt. That makes them hard to compete with.

      There’s rich deposits of a valuable mineral all around, but you can’t invest in a modern, safe, mining operation because if you do, the huge company up the road can just ramp up production and put you out of business. So you get people scrounging what they can with no fixed costs, and selling it to the people who are precluding economic development of their resource.

  • Judas Peckerwood

    This is why I direct my financial support to bulldog nonprofits like the Rainforest Action Network (whose mission extends far beyond just saving rainforests to embrace protecting human/worker rights and putting the brakes on climate change) that focus on the entire supply chain of multinational corporations.

    Without that kind of comprehensive focus it’s far too easy to fall for corporate greenwashing and supply-chain shell games.

  • ajay

    the companies themselves could pool together and start their own investment in the mines to ensure they complied with the law. In this case, there wouldn’t be anything particularly competitive about the issue as they all need the same minerals.

    Wouldn’t this be illegal? Antitrust law?

  • Gregor Sansa

    It sounds as if you’re on board with focusing on high-profile companies like Apple, even if they’re in no way worse and possibly even inconsequentially better than the average company?

    (I’m not criticizing, just asking how you feel about this.)

    • DrDick

      There are a number of reasons to focus on larger, high profile companies like Apple. First of which is the ubiquity of their products in society, which means this resonates with a large number of people. Secondly, their size also makes them major players in the markets and gives them both greater leverage over suppliers and a larger impact on the markets. This is not to say that we should ignore smaller, less well known companies.

  • Rob in CT

    As I call for in Out of Sight, we must fight for what I name a Corporate Accountability Act that ensures essential human rights for workers no matter where they labor if they are working for an American company or in a supply chain for an American economy.

    Maybe you address this in OoS (I haven’t picked it up yet), but… is there anything like this being considered (say, by the Progressive Caucus), even in the embryonic stage?

    • Not that I know of. To my knowledge no one is really proposing solutions to these issues within the political system.

      • Rob in CT

        Hmm. It would be easier if there was at least a basic sketch of a bill out there.

        Then we could our reps letters/emails referencing the bill to say please get on board.

        Wanted: an ALEC for the Left.

    • personwhoreads

      Forgive my ignorance, but could American companies just expatriate to avoid this sort of law? I don’t know how you define a company as being American versus some other nationality when they all seem to be multinational–as I said, I’m ignorant on the topic so if someone can fill me in I would appreciate it.

      Also, would such a restriction violate international trade agreements?

      • J. Otto Pohl

        I think the idea is that no product produced under certain conditions would be allowed into the US. So the location of the company would not be important. If they want to bring goods into the US for sale they would have to meet certain labor standards.

  • The GOP wants to return US workers to this system. No minimum wage , no health and safety laws, let the little children in the mines , they can squat down lower. No point in pretending that’s not what they plan for our future.

    In Texas , 2 yrs of benefits for a job injury , then on to SS, if you qualify. And BTW, “we” plan to do away w/ that socialist scheme , SS.

    Like they said during the Great Depression “You don’t want a hand-out , do you?” Piling insult onto injury.

    The GOP was better prepared in 2008 and were working frantically to gerrymander themselves in –even when they trashed the country.

    2020 should be the watchword–keep your filthy hands off our Dem seats,

  • DocH

    A perfect exemplar of Tsing’s supplychain-enabled salvage capitalism.

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