March 13 (Thomson Reuters Foundation) - Intel Corp has spent
more than five years figuring out how to rid its supply chain of
minerals that finance violence in the Democratic Republic of
Congo region, and now it is offering to show other companies how
they can do the same.
Intel's offer to "open source" its methods for verifying
that none of its products contain minerals from armed groups
involved in the DRC conflict could save other companies
significant amounts of money and give them a head start in
meeting new U.S. regulations that require them to certify their
products are conflict free.
"For us, this has always been about doing the right thing,"
Intel CEO Brian Krzanich said at a meeting in the U.S. Senate
offices on Wednesday with DRC officials where he announced the
Its decision to work on stanching a multimillion dollar
mineral trade - used by rebel groups to finance one of the
world's longest running and most brutal conflicts - stands in
contrast to how leading representatives of corporate America
have responded to the tragedy.
The U.S. Chamber of Commerce, Business Roundtable and
National Association of Manufacturers have sued to overturn or
limit the conflict minerals rule, adopted by Congress in 2010.
They argued before the U.S. Court of Appeals in January that it
is impractical, too costly, and would force them to make
political statements about the content of their products, in
violation of their First Amendment freedom of speech rights.
At the heart of their arguments is that business should not
be dragged into fundamentally political issues and that they
should not be held responsible for righting the wrongs of the
world. Strategically their lawsuit is a pushback against the
trend for global corporations to take more responsibility for
labour conditions, environment, corruption and human rights -
issues that traditionally were the realm of the state.
Over the past two decades, transnational corporations have
grown bigger and more powerful than many states where they
operate, and their global supply chains have turned them into
empires affecting broad swathes of people.
With that power have come new responsibilities. At first
corporations embraced voluntary accords to address human rights
concerns, starting with audits of fair labour standards after
child labour scandals in the garment industry in the 1990s. But
the Rana Plaza factory collapse in Bangladesh in April 2013,
which killed more than 1,000 workers, exposed the limitations of
corporate compacts and audits of their supply chain.
Voluntary accords have succeeded in setting a commonly
agreed set of global standards, said Arvind Ganesan, director of
the business and human rights division of Human Rights Watch.
The technology industry has agreed on privacy standards;
security standards have been negotiated.
The United Nations has formed the Global Compact for
business members who sign up to a common framework for human
rights, labour, environment and anti-corruption. The U.N.
Guiding Principles on Business and Human Rights in 2011 lay out
But voluntary accords can only help so much.
"The strain today is that we never intended voluntary
accords to be the only ones. Our thinking was that they would
become law because we rarely see companies or governments adopt
human rights out of enlightened self-interest," Ganesan said.
Enter the legislative mandates. Anti-bribery laws have
spread in many countries over the past decade. The U.S. and the
European Union both require extractives companies to disclose
payments to governments in a bid to counter corruption, and
there is the U.S. conflicts minerals rule.
In the United States, corporate lobbies have challenged both
the extractives disclosure and conflict minerals laws in court,
arguing they overreach and impose too heavy a burden on
Certainly they can carry sizable costs. The Securities and
Exchange Commission estimates that about 6,000 companies are
affected by the conflict minerals rule and it will cost them
between $3 billion and $6 billion to check their supply chain,
with ongoing annual costs of $207 million to $609 million.
This is where Intel comes in. Carolyn Duran, Intel's
director of supply chain, said it took a long time to develop
its system for bagging, tagging and verifying minerals as they
reach the smelter. Now the costs are manageable and other
companies can benefit by learning from its experience.
The benefits are tangible, said Faida Mitifu, the DRC
ambassador to the United States. At first reduced demand caused
hardship in communities dependent on illegal mines, but as
violence has ebbed, it has helped foster peace, she said.
"It has had a significant impact and created a more
responsible chain," Mitifu said. "The government has worked
closely with the mining companies and put in place a system of
certification, and we have noticed very positive progress in
terms of the industry, and inward investment. More and more, we
are exporting clean minerals."
Who would want to oppose that?