A Court Case in Congo Could Upend Global Conflict Minerals Regulation
A Newly Released Reporting Template Will Help the Industry Prepare
Patient Mukenge Zaluke did not want to change anything in the global supply chain–he just wanted a job. So, last year, he began working at a cobalt mine in Kisanfu, Democratic Republic of Congo (DRC).
Cobalt is mostly produced as a by-product from large-scale copper and nickel mines. The mineral is used in all sorts of high-tech, high-performance products, like advanced aircraft parts, orthopedic implants, and lithium-ion batteries. The rapid growth of electric vehicles is also driving a cobalt boom, as EV batteries require substantial amounts of cobalt.
Unfortunately, 70 percent of the world’s cobalt is found in the Democratic Republic of Congo, one of the poorest countries on earth and the site of countless human rights violations: modern-day slavery, child labor, armed conflict, and worker abuses. This is precisely why conflict minerals regulations in the U.S., EU, and other nations exist. Conflict minerals regulations are intended to leverage the power of the market to incentivize mining operations to stop their worst abuses. However, cobalt is not regulated by any nation. Conflict minerals regulations are focused solely on 3TG: tin, tantalum, tungsten, and gold.
Patience Zaluke is a mechanic. In November 2021, a truck engine fell on his left hand and broke several bones. He was unable to work for three months, but still had medical bills to pay. His employer–a subcontractor for the mine operator–would not pay him for lost time or assist with his medical expenses; neither would the mine operator.
In response, Zaluke did something few Congolese ever do–he sued. Even more shocking: he won. The High Court in Kolwezi, DRC, ruled that his employer must reimburse all his back pay and medical expenses. It was the first major victory of a new workers' rights effort in the Congo, led by local and international lawyers seeking to transform the mining industry and bring global attention to its abuses. The case got headlines around the world and is the latest in a series of news events with the potential to damage the reputations of companies and push governments around the world to declare cobalt a conflict mineral and enforce regulatory compliance.
The Zaluke Case and You: How to Be Prepared For Sudden Change in Supply Chain Risk
While nobody could have predicted the specific details of this case, many companies have been preparing for precisely this kind of event. Cobalt is already considered a mineral of high concern, one likely to be involved in human rights abuses. In the absence of regulation, though, companies have developed their own internal reporting and monitoring processes, seeking to reduce the likelihood of sourcing from a poorly run mine and risking reputational damage or supply chain disruption from a sudden change in regulations.
Cobalt is far from the only mineral of concern. Some major manufacturers and retailers have identified aluminum, nickel, and lithium as minerals that can be associated with conflict, labor violations, and other problems.
Making Concerns Visible: Building an Early-Warning System for Minerals of Concern
The current state of industry concerns about not-yet-regulated minerals is chaotic. While there are templates and processes for gathering data on cobalt and mica via the Extended Minerals Reporting Template (EMRT), there is no standardization for other minerals of concern. Many companies only monitor and report on already-regulated minerals and have no process for identifying and monitoring those of high concern that could cause reputational harm. More proactive companies have robust programs designed to identify and monitor such minerals, but each does this in its own way: compiling its own list, and creating its own monitoring and reporting standards. For suppliers, this lack of standardization is entirely overwhelming.
Fortunately, thanks to a recent initiative from the Responsible Minerals Initiative (RMI)–the leading resource for companies addressing conflict minerals in their supply chains–there is a new solution to help bring transparency to minerals of concern: the Pilot Reporting Template (PRT).
The PRT is a free, standardized template that can be used across industries to gather data on any minerals of concern. During the development of the PRT, RMI surveyed its members to determine which minerals were of the most concern and identified four priority minerals: copper, nickel, aluminum, and lithium. These minerals are listed as recommendations on the PRT, but companies can choose up to any 10 minerals to request data on.
RMI will collect completed PRTs from members to build known smelter lists and establish certification processes for minerals identified as the greatest pinch points within the supply chain. This process will allow RMI to identify the minerals that the world’s leading companies are concerned about, share that information, and build best practices for monitoring and reporting.
The information collected from PRTs will serve as an early-warning alert for the entire supply chain. It will allow companies to know which minerals are already of concern, so they have time to prepare for any change in regulation–sudden or expected.
As an active member of the RMI, Source Intelligence’s team of regulatory experts is working alongside the organization to develop and monitor the progress of the pilot program. This close relationship will help keep Source Intelligence customers informed of changes in the industry so they can prepare for future regulations.