Our Business, Sustainability

We have no taste for unethical sources of crucial minerals

By Charlie on 15 April 2009

GLOBAL – I recently wrote two articles on Nokia’s environmental activities and e-waste. In one, I proudly mention the company’s strong ethics, which in turn influence our suppliers, such as sourcing Tantalum from the conflict areas in the Democratic Republic of Congo (DRC).

I’m not the only one thinking of Tantalum. Fortune wrote a very good article on the subject of “conflict minerals,” and a European wide group of NGOs have united under a campaign called “Make IT Fair,” calling for electronics corporations to do more to ensure materials are not sourced unethically from regions such as the DRC.

This is a very serious matter. Please read on to learn more about this and what we’ve been doing.

The mineral
Tantalum is a material used in consumer electronics. The mobile phone industry uses about four per cent of the world’s total supply of Tantalum. The DRC is one of the places where Tantalum (or rather Coltan, one of the ores that it comes from) is naturally found and mined. The DRC only accounts for around one per cent of the world’s supply of this material, but it is found in the east of the country where the conflict areas are and this is the problem. This has led to concerns that the Tantalum is being mined under conditions that breach human rights and is being sold to fund warlords and illegal activity.

Tracing sources
We have been looking into these issues for some years, trying to ensure that our supply chain of materials is sourced in legal or ethical ways. It’s a big challenge to trace materials to their original sources. This involves thousands of companies and changes in the mining industry. Also, because of the complexity in the way that metals are produced and sold, sometimes ores from many different sources are combined to make the final materials with no or limited traceability. To make further progress requires industry-level action both amongst electronics companies and the mining industry, and Nokia has been actively participating in this discussion.

In 2001 Nokia became aware of the potential link between the mining of Tantalum and financing of the conflict in the DRC and began requiring our suppliers to confirm they do not source this material from this country. This is checked on an ongoing basis. It helps that the DRC provides such a tiny amount of the world’s source of this material and there are many other countries around the world where it can be mined including Australia and Brazil.

More recently the company has been working with suppliers of other minerals, such as Cobalt and Tin, to improve transparency of the supply chain and understand how standards can be promoted. For example, the DRC supplies 40% of the world supply of Cobalt, a material used in batteries. This substance is found in the south of the country, away from the conflict zones and is mined legally by many large, well established companies.

Going further
Nokia is concerned about poor practices at some mine operations around the world, not just in the DRC. Nokia is in a position to positively influence our supply chain, promoting high environmental and social standards. We have been at the forefront of driving action and awareness of ethical standards with our own suppliers and within the wider electronics industry.

For example, we have rigorous health and safety, environmental and labor standards that all of our suppliers must meet, and we require them to apply the same to their own suppliers. Before agreeing to work with a supplier we ensure that these standards are met, and we visit a number of suppliers on an ongoing basis to review standards. We also work with suppliers on training and support to help them implement and improve standards.

If we find that standards are not being met we do not walk away but work with that supplier to address the issues and in so doing help to raise overall standards.

Global action
We welcome further public debate and action in this area if it helps to drive further improvements.

Significant action is being taken through the Global e-Sustainability Initiative, of which Nokia is a member, and the Electronic Industry Citizenship Coalition. Last year these groups conducted extensive research into the key challenges surrounding the supply of metals, the ability to trace and track the sources of metal used in electronic products and the industry’s ability to influence conditions.

The results were shared with various organizations and NGOs who were consulted on the next steps for the industry. Further action will now be taken to try and trace the supply of three metals, Cobalt, Tin and Tantalum, back to their original source. This will include the mining industry and other experts. The results will help inform further discussions on the obstacles of tracing metals and how this can be improved.

Actions speaking louder than words
In the end, it is a bit disingenuous to suggest that we are not doing enough in this space. We think our actions and activities show clearly what we believe in. That we haven’t stood on a soapbox or flung open our books does not mean that we are any less committed to continued efforts in solving issues around mineral sourcing and local health, safety, environmental, and labor standards.

It goes without saying that we will continue our efforts with the same high level of determination and hope to continue driving the electronics industry in the right direction.

What do you think?

[Celia Peterson and Susan Smith, from Nokia's environment communications team, contributed (heavily) to this article.]

Photo by GlobalVoyager

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Charles Says:
April 15th, 2009 at 5:39 pm

I found your article very educational, informative and provocative. Glad to see that Nokia is taking a stance.

Tim Says:
April 16th, 2009 at 8:11 pm

I am glad that Nokia is clearly taking this issue seriously and has made important steps toward providing transparency in your metals supply chain. I hope that you will consider publicly disclosing the results of your transparency measures.

I was wondering how you ensure that suppliers are complying with your requirements related to coltan, especially given that so much of this metal is smuggled illegally to neighboring countries.

I’m also glad to see that you are expanding your work on coltan to include cobalt and tin as well, since coltan is not the only mineral in the DRC linked to conflict, and labor and human rights abuses. I hope that you will expand transparency to other minerals as well.

Finally, it is good that Nokia is working collaboratively through EICC and GeSI, but I hope you will also continue to undertake your own company-specific projects in addition to the industry ones. I believe Nokia can be a leader in this area and stand out among other electronics companies. Has Nokia considered endorsing the makeITfair list of principles for companies and/or ENOUGH’s Conflict Minerals Pledge?

charlie Reply:
April 19th, 2009 at 7:40 am

@Tim, Thanks Tim for your note. As we explained, we require any of our suppliers using Tantalum to ensure it has not been sourced from DRC. If anywhere in the world, materials are being illegaly smuggled it is of course very hard for any company to idetify or stop this. This is why governments need to ensure they are taking action to stop any illegal activity.

We have been in discussions with both of the groups you mentioned, sharing information on what we are doing and will continue to do so. This is not something that any one electronics company can solve alone. To make a real impact here we need to ensure the whole industry and mining firms takes action. Nokia is playing its part in trying to make this happen.

As for the bad situation in DRC, there has to be a political resolution and will to set things right, otherwise nothing will improve.

R.J.Matthews Says:
April 17th, 2009 at 12:38 am

As you are so concerned i thought i would help you out this is a list of some of the companies involved in getting Coltan from the Congo.

“Among the companies included in the list include U.S. Cabot Corporation, Kemet Electronics, Specialty Metals Company, Inc. and Vishay Sprague Trinitechinternational (Israeli-American), British Afrimex, Amalgamated Metal Corp. and Euromet the Belgian Cogecom, and Sogem Trademet The German HC Starck GmbH & Co GmbH and SLC Germany and China and Ningxia Non-Ferrous Metals Pacific Ores Metals (this based in Hong Kong).”

“Also listed companies in Uganda (Uganda Commet Coltan Trading), Switzerland (Finconcord SA), Malaysia (Malaysian Smelting Cor.) Kazakhstan (NAC Kazatomprom), Rwanda (Eagle Wings Resources) and Saint Kitts in the West (Finmining and Raremet Ltd).”

As for “It helps that the DRC provides such a tiny amount of the world’s source of this material” that is simply inaccurate. With the closure of Talison’s tantalum operation more tantalum comes from Africa and the Congo than anywhere else, probably more tantalum comes out of the Congo than all the other sources put together. Lately even very optimistic sources that have talked about five,then fifteen percent of the world supply of tantalum coming from the Congo are now talking about thirty percent coming from there (still a gross underestimate).

“sometimes ores from many different sources are combined to make the final materials with no or limited traceability.” Already a solution to this problem “Frank Melcher, a scientist at Germany’s Federal Institute for Geosciences and Natural Resources in Hanover, leads a team that has devised a way to identify where ore comes from. Every coltan mine has its own geological history and composition. Melcher’s team has already catalogued 600 unique coltan “fingerprints,” and can tell precisely where ore comes from, even when batches from different locations are mixed together.”

Only two ways the problem “blood” tantalum problem can be cracked either total ban on tantalum or a certification scheme in conjunction with a fairtrade scheme where people pay a little more for “clean” tantalum maybe you should be talking to these people http://www.fairtrade.org.uk/

Mind you before you do anything i suggest you find out more about the subject. I know the whole tantalum situation inside out as i am invested in a tantalum explorer and constantly research it so if you want any help (you certainly need it) contact me.

Robert

@R.J.Matthews, Thanks Robert for pointing this out. The mining and inter-governmental reports we have studied suggest that the Tantalum figure from the DRC is a lot lower than you suggest, so we will be sure to take a look at this and the other points you raise.

Anonymous Says:
April 17th, 2009 at 6:02 pm

This is what a company is suppose to do. I can only hope that other companies will follow Nokia’s footsteps and make a change for the better.

R.J.Matthews Says:
April 19th, 2009 at 3:08 pm

Thank you Charlie for you reply and if you give links to the reports you mention i can point out where they have gone wrong. I would suggest however you take more note of the U N expert reports and agencies that are closer to the ground.

However even if you were to look carefully at governmental reports they show the same thing.
http://minerals.usgs.gov/minerals/pubs/commodity/niobium/tantamcs06.pdf
“Import sources (2001-04) Australia, 70% Canada 13% and other 17%”
http://minerals.usgs.gov/minerals/pubs/commodity/niobium/mcs-2008-tanta.pdf
Import Sources (2003-06): Australia, 19%; Brazil, 19%; China, 12%; Germany, 9%; and other, 41%.
Even that does not tell the whole story as they are not digging up tantalum in Germany ! Also a large proportion of the imports that come from China come from the Congo first as nearly everyone admits.

These reports are still a underestimate of the “dirty” tantalum trade as by its very nature it can be hard to estimate its size. Since then the production from Australia has dropped to nothing with the closure of Talisan’s tantalum side of its business and almost nothing from Cabot with it closing its Tantalum operation at its Tanco mine and its offtake partner Noventa really struggling.

I can see future problems for Nokia as even if it wants tantalum from “clean” sources it will be hard to do so with the steady decline of the “clean” tantalum industry.

The “clean” tantalum industry needs support which is why i suggested the fairtrade route in my previous post.

charlie Reply:
April 20th, 2009 at 12:30 pm

Robert,

Thanks for the links.

Indeed it seems it will be challenging.

Tchau,

Charlie

R.J.Matthews Says:
April 20th, 2009 at 3:05 pm

Charlie,

Challenging but not impossible.

If you ever need any research done on the subject just give me a bell.

Ciao

BG Says:
April 21st, 2009 at 4:54 am

As a supply chain manager for a major consumer of Tantalum, I manage the purchase of chemical raw materials from various sources across the globe. In this position, I follow the Tantalum (and other) mining & raw materials supply chain quite exhaustively, and continuously, and have done so for the last dozen years. I also attend various industry conferences related to the commodities I work with most closely (including Tantalum). I mention this simply to establish my credentials, and nothing more!

I am afraid, Charlie, that I am going to have to differ with several of your opinions and statements, and side with R.J. Matthews. In reading his comments above, I felt that R.J. has been quite factual, and highly accurate. With the recent closure of the Wodgina mine by Talison (see their announcement at http://www.talison.com.au/pdfs/Media Release – Nov 2008 FINAL.pdf), approximately 30%+ of the world’s Tantalum supply went off the market. The reason for the closure given by Talison was that there was low demand for the raw material caused by the economic downturn, and “the long term and increasing trend to reduce material costs in the electronics supply chain, which strongly encourages increased Tantalum supply from Central Africa, and particularly from the Democratic Republic of Congo (DRC)”. They continue on to say – “Our goal is to bring Wodgina back into production when… prices are stronger”. Now, I am personally aware that major consumers of Tantalum capacitors, including mobile handset manufacturers like Nokia, Samsung, Sony Ericson, LG Electronics, etc., as well as computer manufacturers like Dell, HP-Compaq, Sony, Toshiba, Lenovo, etc., apply continuous and increasing pressure on their large Tantalum capacitor manufacturers to reduce their prices, quarter upon quarter. To be fair, this pressure is applied to all electronics suppliers, and not just capacitor manufactures, as a result of the growing consumer expectation that electronics prices will keep dropping all the time… Moore’s Law in action! I should know – I am one of those people who receive, and pass on, the “pain”, and am just as guilty as the average consumer who creates this pressure, or the supply chain executive or manager who needs to meet his/her quarterly or annual “numbers”, which causes the Tantalum capacitor manufacturers (AVX, Kemet, Epcos, Vishay, NEC, etc.) to pass the pain along to their major suppliers (Cabot, Starck, Ningxia, etc.), who in turn pass this “pain” on to their raw materials suppliers, who, when they stop making sustainable margins, close down the business!

Might it just be remotely possible that the pricing pressures applied by major electronics companies caused Talison to close its Tantalum mine? Might it be additionally possible that Nokia, as the world’s leader in mobile handsets, might just count as one of the companies that apply such pressure to their supply base? Might it be further surmised that the disappearance of 30%+ of the worlds Tantalum supply could just cause additional sourcing of Tantalum elsewhere? Finally, is it even possible that one of these sources would include the DRC?

Let’s now talk about identifying the source of Tantalum ore’s. As R. J. Matthew’s comments, Frank Melcher and his colleagues (Torsten Graupner, Maria Sitnikova, and Thomas Oberthur) developed a technique for “finger-printing” Tantalum, which was presented at various conferences. I will be the first to admit that, similar to human fingerprinting, there does exist the possibility that the technique may, sometimes, give false positives. Is this sufficient reason to bypass the use of the technique while we wait for the “silver bullet” solution to fall into our laps? Might it be more appropriate to take a leadership stance in a situation where the United Nations has, in its rather lengthy though very well researched report, accepted that profits from illegal coltan mining is one of the major funding sources fueling the conflict in the Democratic Republic of Congo?

In my humble opinion, the question is whether we want to subscribe to the philosophy of “I am not going to jump into the pool unless I have learnt to swim”, or will we take a leadership position in preventing the funding of rape and murder in the DRC by actively auditing our supply base using existing techniques to ensure our supply chain is clean?

Let our conscience be our guide!

charlie Reply:
April 21st, 2009 at 11:33 am

@BG, Both you and Robert have pointed out a significant change in the market. While I (Charlie) might be a step behind this, I’m pretty sure our sourcing people are getting wind of this.

In any case, I’ve passed on Robert’s and now your notes on this. Just to be sure.

As for leadership, the problems here extend beyond simply business and beyond simply one company, which is why we are working hard with various organizations who bring the combined force of countries and businesses. Our conscience is our guide and we are trying to be effective as possible with the tools and influence we have.

And thank you for urging us to keep doing what we are doing AND to try and do even more. We feel the same way.

R.J.Matthews Says:
April 22nd, 2009 at 6:44 pm

Thank you for your comments as well BG good to get ones view confirmed by a expert. The tantalum from the Wodinga mine had of become increasingly expensive to mine, but H C Starck and Cabot would have paid out more money if they did not have any alternatives to turn to.

Have not much to add as i agree with all your comments it is just a pity the “clean” tantalum industry is in such trouble, cutting down on the choices people and organisation’s like Nokia have.

There are some tantalum explorers and producers outside the Congo but unsurprisingly many are struggling. Just hope more solutions like the tantalum fingerprinting can be found and used.

Sasha Lezhnev Says:
May 5th, 2009 at 5:23 pm

Your comments have all been very useful. Many consumers and activists whom I speak to across the U.S. are very concerned that their cell phones and Ipods may contain conflict tin and tantalum. At the moment, it’s impossible to tell them that that is false.

Let’s do something concrete to help clean up the supply chain. To that end, some colleagues and I have helped come up with a way for electronics companies to provide proof that their products are indeed conflict-free: The Conflict Minerals Pledge. Much like what BG was saying above, tracing and auditing the metals supply chains will go a long way in providing this proof.

Nokia should show leadership and sign the pledge, showing that it wants to indeed go beyond unverifiable commitments from suppliers in cleaning up its supply chain. The Pledge is led by the Enough Project and my organization, the Grassroots Reconciliation Group, which is concerned about the plight of child soldiers in central Africa.