Wednesday, 14 September 2011 08:20
*By Rebekka Madsen
Many people in the world today are aware of the fact that their mobile phones or other electronic devices most likely contain conflict minerals, yet limited initiatives are made to demand transparency in the supply chain of electronic companies.
Different NGOs and civil society groups have attempted to raise awareness of this situation while others have made movies highlighting the issue. An example of this is Frank Poulsen’s documentary “Blood in the Mobile” which takes us to the mineral rich area of Eastern Congo where the mines have funded the conflict through the extraction and illegal export of valuable minerals. Armed groups and military units, according to both the United Nations and the International Peace Information Service, control over half of the total 200 mines in eastern Congo and 12 of the 13 major mines. It is due to their extensive control of the mines that the armed groups earn up to 90 percent of the profits in some areas; money that is spent on financing the conflict rather than on social development. Furthermore, the mining industries are working people under poor and dangerous conditions. On average miners earn between $1-5 per day and the World Bank has also reported that child laborers, between the ages of 10 and 16, are being employed to work in the mines.
Poulsen then travels to Finland where he confronts the billion-dollar profit company Nokia, which is among the companies that use minerals from the DRC in their products. This movie is just one example among many attempts to raise awareness of the fact that we, as consumers, finance the conflict in the DRC and that there is a need for transparency in supply chains.
Recently a law was passed in the US, demanding all manufacturers of user-electronics to declare the materials that they use in their products if they are sold in the US. The law does not ban manufacturers from using minerals from conflict areas, but they must indicate whether they can guarantee the absence of them. This allows consumers to deselect, for example mobile phones, where children or forced labor have been involved in the manufacturing of products or if the product may contain conflict minerals. This law has resulted in Nokia reacting by increasing the control of mines and the smelting works, by demanding certificates of origin for the minerals that they receive from their subcontractors. Though this is a positive step in the right direction, many loopholes still exist allowing conflict minerals to enter the supply chain. However, many more countries could take similar actions to the US, letting consumers know when they are buying a product that possibly contains conflict minerals. At the same time, this allows consumers to apply more pressure on manufacturers to provide not only transparent but socially and environmentally responsible supply chains.
More transparency in general concerning the flow of extracted minerals, and increased corporate social responsibility, would together with the suspension of tax havens result in more profits for the mineral rich countries and thereby more funds to spend on development.
According to research, the amount of money, $160 billion, that developing countries lose in tax revenues per year, due to among other things tax havens and illicit financial flow, is more than 1.5 times the total aid budget. This means that if the multi national companies paid taxes then the developing countries would be able to finance their social spending on areas including education, clean water and the health sector and would no longer be dependent on foreign aid flows. For this to actually happen, initiatives such as the Extractive Industries Transparency Initiative (EITI), Publish What You Pay and Revenue Watch Initiative are paramount to ensure a certain level of transparency forcing governments to be held accountable for their spending of funds from the sale of resources.
*Madsen is a student at Aalborg University in Denmark, studying Development and International Relations. She is currently on internship with the Economic Justice Network and can be contacted on:
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