The World Economic Forum (WEF) just wrapped their annual meeting in Davos, Switzerland. The WEF headline garnering the most media attention was that of climate change, but a relevant and very useful report on supply chain responsibilities and accountabilities was also presented. While the emphasis is not on conflict minerals, it is mentioned.
The report covered a number of topics in the context of a globalized economy and increased public pressures/expectations, concisely summing up the state of affairs as follows:
Despite significant investment from companies and episodic improvements, these efforts have been limited in the face of deeply entrenched human rights challenges.
Building off this fundamental insight, the WEF report continued to elaborate on the theme of “shared responsibilities”. In our view, the most compelling statements from the 24-page report include:
… a distinction needs to be drawn between visibility [into a company’s supply chain] and responsibility.
… consumers and the media assume that global brands have the capacity to know where their products are being produced or obtained.
…visibility does not equal responsibility; companies cannot and should not be held solely responsible for addressing challenges in their supply chains.
These challenges will never be addressed in a meaningful way if we put the burden solely on companies or governments to act alone… governments and other stake-holders should also identify the extent to which human rights issues are primarily related to significant governance gaps, caused by weak or inefficient regulation or corruption… This does not mean that companies should assume governments’ responsibilities to their citizens. Instead, it requires governments, companies and other stakeholders to work together to close governance gaps that are being driven, in part, by globalization and private sector demands.
At the same time, Amnesty International released a report highlighting environmental degradation, child labor and worker safety failures in the DRC related to artisanal mining of cobalt. In alignment with WEF, Amnesty pointed out that government plays a key role in improving conditions in a global supply chain, and in remedying specific failures in governments:
The research in this report exposes a clear gap in relation to the role of home states, such as China, as well as many others, in requiring transparency around cobalt supply chain practices.
Regulation is required to ensure transparency in relation to the points of extraction, the conditions of extraction and trading, and the chain of custody (actors involved) for cobalt. This will help to achieve the greater objective of ensuring that those responsible for the human rights abuses (including the companies who have on-going abuses such as child labour in their supply chains) become part of the solution.
Near the end of the report, Amnesty included three pages of recommendations to governmental entities to improve multiple areas of governance.
Yet the overall tone of the report focuses more on its accusations of corporate failures, which has unfortunately been reflected in the major media outlets. With the exception of The Verge, that coverage has omitted viewpoints on the current reality of supply chain visibility for cobalt.
We think both reports are worth reading.