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Conflict minerals

Smartphones: Blood stains at our fingertips Add to ...

On April 11, 2009, NDP MP Paul Dewar’s plane touched down in what is sometimes referred to as the rape capital of the world: The Democratic Republic of the Congo. He was there to talk about a mining industry that has helped finance a vicious war that has left some seven million people dead since 1998. The voracious international appetite is centered on an obscure mineral, coltan, which many Canadians have never heard of and yet would not be able to live without.

To see the other side of that war, Mr. Dewar could have remained in Canada and taken a trip to the nearest mall. In the next few weeks, millions of electronics will be yanked off store shelves during the busy holiday shopping season – computers, smart phones, electronic book-readers. Almost every single one of the gadgets Canadians purchase will, in turn, help extend Congo’s misery, because inside the circuitry of those gadgets is coltan.

Coltan has become one of the world’s most sought-after materials because it is used to create tantalum, a key ingredient in electronic circuitry. The global tantalum capacitor market is worth about $2-billion (U.S.) annually. You’ll find them in computers, cell phones, home appliances and myriad other electronic goods.

“I’d like to see that when my kid buys an iPhone or an iPod Touch – any of these technologies – that I can and any Canadian can rest assured that they’re rape-free,” says Mr. Dewar, who has just tabled the Trade in Conflict Minerals Act with Liberal Party support. The act would pressure companies to ensure the raw materials they purchase don’t end up putting money in the pockets of warlords. But the proposed law’s future is likely also dependent on Canadian consumers’ willingness to pay a few dollars more for computers that aren’t built using conflict minerals -- something that’s far from certain.

Whereas blood diamonds have shamed many of the world’s biggest miners into more ethical practices, the notion of blood tantalum has so far had no such effect. Not only are most consumers unaware of the mineral or its background, but there are currently no reliable means of ensuring that the tablet computer you just purchased wasn’t made using conflict coltan.

The U.S. government is leading a push to embarrass the world’s biggest coltan purchasers into cleaning up their act. The Dodd-Frank law, a sweeping Wall Street reform act that leverages the might of the Securities Exchange Commission and is expected to take effect in the next few months, contains a clause that would pressure companies to say where they’re buying minerals such as coltan.

About 80 per cent of the world’s coltan is in Africa, and the vast majority of that store resides in war-torn Eastern Congo. With an estimated $25-trillion in potential value, Congo is, in terms of untapped mineral wealth, perhaps the richest country on Earth. However the country’s mineral trade is a complex and violent web. Rebel groups from within the Congo and neighbouring countries have set up shop around the coltan mines, sometimes with the implicit support of the local military – which experts note are sometimes little more than criminal warlords in uniform.

Numerous government and human rights groups have drawn a direct line between coltan mining profits and the ongoing atrocities in the region, including dismemberment and gang-rape.

“This obscure mineral has had the distinction of effectively becoming a kind of blood diamond of the digital age,” professor Jeffery Mantz of George Mason University wrote in a 2008 Social Anthropology article exploring Congolese coltan mining.

As with the diamond trade, there are some potential solutions to the conflict-coltan problem, but their implementation is far from assured. For example, manufacturers could be forced to declare where their raw materials are coming from, or to implement a fair-trade program such as some coffee producers have done. In part, the clauses in the Dodd-Frank act seek to impose some of these solutions on companies – and because, unlike in Canada, there exists a countrywide securities regulator in the U.S. to enforce the law, hardware manufacturers are taking it seriously.

In theory, under the proposed law, suppliers who adhere to ethical practices will be able to market their wares as conflict-free – a potentially effective marketing strategy. But as in the case of fair-trade coffee, such initiatives are limited by the number of companies willing to buy in, and the number of consumers willing to pay extra for the product. However the coltan trade is more difficult to clean up partly because of the lawless nature of mining in the Congo and partly because of the general public’s ignorance of the commodity’s use in most modern technology.

There are other large deposits of the mineral in countries such as Australia. But Australian “conflict-free” coltan comes at a higher price, adding to the final retail cost of a high-end personal computer or cellphone. As such, Australian mines have largely been unable to compete with Congolese operations. In fact, the presence of “conflict-free” coltan has in some ways made the conflict variety more difficult to detect.

“Recent reports state that Rwanda and others are using the war in Congo to continue the exploitation of coltan. Once it is extracted, we are told, it is then sent down to Australia, where it is mixed with Australian coltan – where 20 per cent of the world’s coltan comes from – before being processed into tantalum,” U.S. Senator Sam Brownback said in a 2008 speech on the senate floor. “Unfortunately, it is impossible to say with any certainty that the tantalum supply coming out of Australia is conflict free.”

The U.S. government has moved more aggressively in recent years to combat the use of conflict minerals. The Dodd-Frank act, passed in July, contains a clause that would put intense pressure on U.S. public companies to state the source of certain minerals – including coltan’s derivatives – used in the manufacturing process. Because companies will be forced to report to the U.S. Securities and Exchange Commission, the need to ensure legally sound and accurate compliance is immense.

Mr. Dewar hopes Canada follows that lead. In late September, he introduced Bill C-571, which would create a “due diligence mechanism” to ensure Canadian companies are not purchasing conflict minerals. In Canada, the mining finance capital of the world, such rules would go a long way toward disrupting the conflict coltan trade. However, because Canada has no national securities regulator, Mr. Dewar was unable to lodge responsibility with a financial agency with teeth and has to rely instead on an ombudsman and an annual report he hopes will shame companies that continue to use conflict minerals.

But in the U.S., many manufacturers and retailers, including Wal-Mart and Target, have fought against these new rules, arguing that it is simply too difficult to accurately trace the origin of such raw materials. Some worry the Dodd-Frank act may have the unintended effect of shifting Western corporate money away from an already impoverished Congolese population.

Indeed, it appears few if any major technology firms are able to say with certainty that their devices don’t contain coltan sourced from the mines fuelling Congo’s brutal war.

Rick Goss, as the vice-president of environment and sustainability at the Information Technology Industry Council, has been helping the high-tech industry try to stay ahead of the public relations disaster that befell the “blood” diamond industry. His industry lobby group represents huge interests – RIM, Apple, Microsoft, Dell, Nokia, HP and many others – but Mr. Goss seems earnest as he describes the sector’s voluntary efforts ahead of the deadline for the Dodd-Frank provision to take effect on April 17. The group is test-piloting an audit system for the Chinese and Indonesian smelters that buy shipments from conflict zones, and it has started implementing a “bag-and-tag” process whereby the raw minerals are sealed as they are mined, aggregated through village traders and then sent off abroad in larger shipments.

Goss admits there’s no fool-proof process. In the chaos of the Congo, where even the military is being implicated in atrocities and kick-back schemes, it is simply impossible to ensure armed militias don’t get at least some of the cash, by erecting impromptu road tolls to extract illegal taxes on even legitimate shipments of “conflict free” minerals.

“There’s no paper trail when an illegal tax is applied,” Mr. Goss says. “Can you avoid every leak into the system? It’s never going to happen. No more than the IRS (Internal Revenue Service) here can make sure that no one ever cheats on their taxes.”

For years, hardware manufacturers have essentially relied on the word of their suppliers that minerals such as coltan have been conflict-free. However it appears that more and more people are deciding such assurances aren’t good enough. A campaign is under way to establish “conflict-free campuses” in universities across the U.S., and earlier this year hundreds of people peppered Intel’s Facebook page with queries about where the company gets its raw materials.

Ultimately, however, the movement to end the use of conflict coltan will largely rest on whether consumers come to acknowledge the link between sleek, state-of-the-art electronics and brutal violence in one of the most war-torn nations on Earth – and whether “blood phones” will become as current a phrase as blood diamonds.

In Kinshasa, Congo’s capital, that came into sharp focus when Mr. Dewar asked the Minister of Mines and Natural Resources about the lack of governance that has led to the violence. Couldn’t the government take a more active role in policing the mining sector, to ensure that mineral wealth didn’t flow to murderous thugs, he asked? “I remember the Minister just looking at me and saying flatly, ‘What is your role?’ ”

Iain Marlow is the Telecom Reporter and Omar El Akkad is the Technology Reporter for The Globe and Mail.

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Follow us on Twitter: @iainmarlow, @omarelakkad

 

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