Martin points out that mining areas of the Eastern DRC are difficult to access and the areas are often controlled or racketeered by armed groups. Illegal taxes are often levied during the transport of minerals to buyers in town, and minerals from various sources can easily be mixed during transport to consolidate loads and/or mask their provenance. Such actions could render materials no longer conflict free. "In such a context, it does not seem possible to provide an absolute guarantee as to the conflict-freeness of minerals." The Dodd-Frank Act requires due diligence and "documented representations" by suppliers will have to be relied upon. At least until a more reliable declaration "system" has been established.
I received an e-mail comment from Martin J. Bauwens, a consultant based in Johannesburg, South Africa. He provides expert consultancy services to African investors, with a focus on the mining industry. He recommends the following articles he prepared:
Based in South Africa (Johannesburg), MJB Consulting provides expert consultancy services to African investors, with a focus on the mining industry.
Based in South Africa (Johannesburg), MJB Consulting provides expert consultancy services to African investors, with a focus on the mining industry.
"While we advise electronics companies to take action as soon as possible, some are waiting until final SEC clarification is provided. What is your company doing?"
I am impressed by the interest in this topic! You ask if US regulators and the electronics industry is really concerned about what happens to the people in the DRC. I certainly hope so. I think the motivations are to help the region. I sincerely hope the SEC takes the potential impact on the DRC region and people into account before finalizing their rules.
You ask what companies are currently doing, and mine in particular as a distributor. Manufacturers will have to rely on smelters. Smelters will need to identify the mine(s) of origin of their raw materials, and provide evidence their source mines are conflict free. If they can’t do that US electronics manufacturers are not likely to buy from them. The real fear is that the SEC rules will not allow enough time for a system to be established for certifying mines and that will cause manufacturers to look for non-DRC region sources.
My company sells electronic components manufactured by others. We are currently unable to provide “conflict minerals” content information on our products. We tell our customers we are monitoring SEC actions and will react as soon as final rules are issued. I am monitoring an Electronics Industry Citizenship Coalition (EICC) and the Global e-Sustainability (GeSI) co-initiative to certify smelters as conflict free (http://www.eicc.info/). I hope an effort like this proves viable for DRC region smelters.
I agree with you that in most cases the industries as a whole are more focused on their sales and profits than what goes on in individual countries. As long as they get their product, many don't care about the after effects. And we are talking about the SEC. They only have governance over the U.S. What about all of these other global companies that still buy conflict minerals? In order to help stop the atrocities in the DRC, there would have to be significant global implications.
Do you really believe the industry is that concerned about what happens to the people of the DRC? This is a business and oftentime the profit motive can trump social responsibility.
How has the industry responded to your encouragement that they should comply immediately with the new law? You mentioned that your company has asked your suppliers to move towards compliance. Did they agree and what has been your experience? I am also curious how distributors can assist in ensuring compliance. Could you please explain further.
Ken--you make a great point that I haven't seen discussed that much--will the Dodd-Frank Act have any impact on the real problem in the DRC? The industry is doing the right thing by getting behind the act, at least in theory, but execution is going to be very difficult. It will be too bad if this is merely a symbloic action that has very little actual effect on human rights.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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