Supply Chains, Child Labor, and Accountability
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Sources close to a pilot scheme expected to be launched this year say the aim is eventually to give manufacturers a way of ensuring the cobalt in lithium-ion batteries for products such as iPhones and Teslas has not been mined by children.
Tracking cobalt presents many challenges as scores of informal mine sites would have to be monitored, all players in the supply chain would need to buy into the scheme, and accurate, electronic data would need to be transmitted from remote areas – all in a vast country plagued by lawlessness.
But companies are under growing pressure from consumers and investors to show the cobalt they use has come through supply chains free of rights abuses, just as they have for minerals used in electronics such as tantalum, tin, tungsten and gold.
Businesses in China, the main destination for Congolese cobalt from artisanal mines, have set up a Responsible Cobalt Initiative, which has been joined by tech giants such as Apple and Samsung, to address child labor.
The problem they face is that there are few sure-fire ways of tracing cobalt from the informal mines that produce up to a fifth of the cobalt from Congo, the world’s biggest producer.
“The demand to make cobalt more sustainable is going to continue growing, meaning there is a will to find a solution and blockchain will be part of that,” said a source with the project, who declined to be named because it is not yet public.
Blockchain technology is already used in the diamond industry. Gems are given a digital fingerprint that is then tracked by blockchain as gems are sold, giving a forgery-proof record of where the stones have come from.
The cobalt supply chain is far more complex but the developers of the pilot hope blockchain – a decentralized online database in the form of a distributed ledger – can at least track some of the stages that are a major worry for end users.
OK, but how do you make this work? Ryan Felton worries about it and so do I. In fact, I will say what I always say in these situations–the only way to ensure that production of whatever happens under ethical circumstances is to codify it in law, create systems for ensuring compliance, and then enforcing those rules. In this case, the way to make it work is to hold each stage of the supply chain legally responsible in U.S. courts (if the cobalt ends up in the U.S., either in raw form or processed in commercial products such as batteries) for what happens below it. If you hold Apple accountable for what happens in Congolese cobalt mines, I 100 percent guarantee you that Apple will make sure that children are not mining that cobalt. Short of that, companies will cheat for profit. I wish this obvious statement was central to our conversation about global labor issues, but it really isn’t, largely because applying basically regulatory structures to the global economy seems so remote in an era when we are eliminating or eviscerating these structures and their enforcement in our own nation. But it is the answer.