The regulatory environment may take a new twist. U.S. legislators are considering a bill that would require companies to track the origin of raw materials, raising several questions about reporting and enforcement.
Kansas Senator Sam Brownback has drafted a bill that requires companies to report where ore for tin, tantalum and tungsten was mined. The intent is to cut off funding for rebel groups in the Congo, mimicking the ban on so-called blood diamonds.
A similar bill proposed by Washington Congressman Jim McDermott explains why the legislation was written. He cites a 2008 study by the International Rescue Committee which estimated that 5,400,000 people have died due to conflicts in the Democratic Republic of the Congo since 1998. The ongoing rate is as many as 45,000 deaths each month.
The electronics industry will be among the fields that will be encompassed in any legislation that emerges. That's prompting a lot of studies and raising questions about the eventual impact on the supply chain.
The U.S. Senate's proposed Congo Conflict Minerals Act of 2009 requires companies that sell products containing these materials to tell the SEC the country of their origin. If they're from the Democratic Republic of the Congo or the surrounding countries, they need to disclose the mine of origin. If the bill passes, it will require significant changes in materials monitoring.
"While we support the intent of the bill, the challenge is, there's no tracing or tracking mechanism for these materials," said Michael Loch, Chairman of the U.S. Technical Advisory Group that provides environmental input to the International Electrotechnical Commission (IEC).
Once materials get into the supply chain, tracking becomes increasingly difficult. "It's a very challenging issue, it's hard to know where materials come from. There's no chemical way to tell where the ore comes from," said Leann Speta, Social and Environmental Program Manager for Sun Microsystems' Global Supply Chain group. She will provide focus on this topic during the IPC Materials Conference: Engineering for Compliance conference in Irvine, California, November 11, 2009.
She noted that many ore processors dump all incoming materials into what many refer to as a swimming pool, so the origin of the ore is quickly lost. "In many parts of the Eastern Congo, miners and traders will carry the ore for a couple days to other traders who may then take it to companies for export. By the time the material leaves the Congo. it has likely been handled by several people or entities making it quite challenging to know exactly what mine it came from," she said.
That marks a significant change from RoHS, REACH and other regulations that require vendors to keep specific materials out of their products. "It's a lot more difficult to understand the source of material than to know whether your product contains it," said Loch, who's also Director of Supplier Corporate Responsibility at Motorola.
Though it's still uncertain whether Congress will find time to pass a bill this year, the electronics industry is already doing research so corporations can better understand what may happen.
The Global E-Sustainability Initiative (GeSI) is working closely with the Electronic Industry Citizenship Coalition (EICC) to perform research on the issue so member companies can understand the potential impact of regulations surrounding these metals.
Last year, the two groups commissioned a major study, Social and Environmental Responsibility in Metals Supply, to determine the difficulty of tracking materials. Researchers first had to estimate how much of each metal was used by the electronics industry, concluding that there's a "lack of precise tracking of metal use across sectors."
However, they estimated that the electronics industry uses a maximum of 36% of tin, 25% of cobalt, 15% of palladium, 9% of gold, 2% of copper and 1% of aluminum.
How much of that material comes from the Congo is also difficult to ascertain. ITRI, the global tin association, estimated that the DRC represents around 4% of the global tin mine production. Some estimates peg the region's tantalum level at 15 to 20%, while the region mines less than 5% of the world's tungsten.
Another challenge is that the number of material suppliers changes constantly, making it difficult for companies to manage data. Changes occur even more often in the embattled region when control of mines changes.
"There are a lot of issues we need to get our arms around. Now, we don't even know which mines are involved in the conflict," said Loch, who's also the Board Vice Chairman for GeSI.
Government agencies are now determining which mines are contributing funds to rebels. Once they're mapped, it will be easier to find ways to comply with regulations. Sometimes, it's fairly simple to determine when miners are trying to circumvent regulations.
"A lot of materials are smuggled into other countries," Speta said. "If you're buying tantalum from Rwanda, there's a good chance it's from the Congo because there's not a lot of tantalum in Rwanda.
Though there are many challenges, many companies feel that the goals warrant the time and effort needed to reduce ways the warring factions can fund their armies. They note that the electronics industry has proven that it can respond to help in efforts to improve global conditions.
"When RoHS passed, the industry had no real idea how to comply with regulations, but we were able to come up with solution," Speta said. "I'm optimistic that we can do something that can help the region."
Though governments and a number of non-government organizations contend that putting economic pressure on DRC will help bring an end to the conflict, not all groups concur.
A report funded by the British government's Department for International Trade, the London School of Economics and Belgium's Ghent University found that although such measures are well-intentioned, they would be likely to do more harm than good.
The report contends that reducing production in mines would cause severe economic hardship in regions where the mines are often mainstays of the local economy. This disruption could make it more difficult for the government to regain control of areas taken over by rebels, the report stated.
Conflict metals are one of the topics that will be examined at the IPC Materials Conference: Engineering for Compliance at the Irvine, California, Marriott in November. Low halogen and lead-free materials are among the topics that will also be discussed at the conference, which is co-located with another environmental conference, It's Not Easy Being Green: Complying with Changing Global Environmental Laws.
For more information, visit http://www.ipc.org/.
