Supply chains are the foundation of our society – but you might not even know why they’re important.

Your mobile phone, your car, your clothes. All of these things came from a supply chain. To put it simply: a supply chain is a series of vendors, organisations and people that allow a product to get from the supplier to the consumer. So, your mobile phone might be sitting in your hand, right now, but at some point, Cobalt, Lithium and Tungsten were all mined for its creation. Do you know if they were responsibly mined? Was there child labour involved? Forced labour? Did it fund conflict?

A bit scary, isn’t it?

Supply chains are everywhere, and so are concerns surrounding supply chains, particularly mining ones. Are they ethical? Are they sustainable? Are they using child labour? What is the impact that sourcing is having on local communities?

Supply chains are everywhere

The ethical problems of supply chains have attracted various criticism and responses. For good reasons: in mining supply chains, it is difficult to track mineral sourcing down to every supplier. This is a problem. Minerals like Cobalt, Lithium and 3TG are integral components in our mobile phones and cars. They are central to modern life. Yet frequently, they are sourced unsustainably and unethically, with the use of child labour and modern slavery.

There are three main things that should be considered when sourcing minerals:

  1. Sustainability.
  2. Ethics.
  3. Economic impact.

These all form ‘responsible mining practice’. Not only are the three vital to the protection of our environment, but they are also fundamental in our community and economy. Nobody wants murky supply chains – no, not even companies. They, and we, want insight into supply chains so we know that minerals can be sourced in a responsible way.

Sustainability

So, sustainability. What does that mean, exactly?

The more widespread technologies like smart phones become, the less materials we naturally have. Cobalt, for one, is on the decline. Metals decrease in availability, as they continue to be widely sourced and in demand. The effect of mining on the environment also cannot be ignored. Small-scale gold and silver mining, for example, is a major contributor to mercury pollution.

Yes – ‘sustainability and ‘mining’ haven’t always been the best of friends.

Companies, however, are making active movements to end this. RioTinto’s Smart Mining program is one example. Samsung and Apple have both made movements towards making sure their materials are sourced ethically, and were praised in 2017 by Amnesty International for their transparency. Apple even went as far as to name its suppliers. Companies like Microsoft and Vodafone came under fire in the same survey for no attempt to maintain their supply chain.

In cases like this, where companies do not even adhere to basic responsible guidelines, a problem arises. If a company won’t share its suppliers, then how is it possible to know if our technology is being sourced ethically and sustainably? The simple answer: it isn’t.

Ethical sourcing

This brings us to our second point – ethics.

If we’re talking about Cobalt, ethics are central to its responsible sourcing. Forced and child labour are prominent in the Democratic Republic of Congo (DRC). Workers are subjected to long days in poor conditions, many facing incredible weakness and illness. We talked about mercury pollution earlier. Pollution isn’t the only problem when it comes to mercury. Exposure to mercury in the processing of ores leaves workers vulnerable to poisoning.

Minerals like Cobalt and 3TG (Tungsten, Tantalum and Tin) are called ‘conflict minerals’. This means that they come from war zones, or bad political climates, and serve to further fund the conflict. Gold ore is also a conflict mineral, sourced in the DRC. Another conflict mineral you may be familiar with are diamonds – or, as they are referred to, ‘blood diamonds’. Blood diamonds are generally sourced amidst civil wars.

Essentially, minerals are sourced in war zones to fund further wars, and exploit innocent people and force them to work. This wreaks havoc of their communities.

Economic Impact

Then there’s the economic impact. Companies come to places like the DRC to source their materials. Small-scale and artisanal mining groups often force the existing communities to work, whether they are children or adults. Then, these people become reliant on the economic power of the mines. They provide a source of reliable income.

Many efforts to stop this economic exploit have done more harm than good. When companies stop sourcing in conflict areas, miners lose their jobs and mines close down. This happened in 2012 when the United States government required US companies to stop sourcing conflict minerals. Suddenly, cash flow reduced – and nearly stopped – to the DRC, and miners lost their jobs. Communities plunged into poverty.

So, what can we do?

Economic improvement in these areas is not caused by companies ceasing their sourcing altogether. Instead, better technologies (such as blockchain) and improved employment conditions mean that minerals can still be sourced, but ethically. This way, communities don’t lose their primary source of income, while companies also reduce the risk of exploitation.

Responsible mining can ensure the economic and sustainable future of local communities. Big companies sourcing near small communities can, in fact, benefit them by producing jobs and bringing business to the area. This relies on the fact that workers are engaged in safe, ethical, paid labour. Responsible mining isn’t easy, but it is fundamental for the continuation of the mining industry.

To see for yourself how blockchain can help ensure responsible mining practices, check out our platform STAMP.