Demand the Supply: Ranking Consumer Electronics and Jewelry Retail Companies on their Efforts to Develop Conflict-Free Minerals Supply Chains from Congo

For decades, activists and affected communities in the Democratic Republic of Congo have called attention to the links between their country’s minerals and its protracted armed conflicts. To many communities historically impacted by the violence and lawlessness surrounding Congo’s gold, tin, tungsten, and tantalum mines, the need for change is clear.

As a result of the unique leverage they have over their supply chains, the multinational companies that profit from Congo’s minerals have a central role to play in addressing the links between conflict and mining.

The Enough Project’s 2017 conflict minerals company rankings examine 20 of the largest companies, as defined by market capitalization, in two of the industries which consume the most tin, tungsten, tantalum, and gold: consumer electronics and jewelry retail. Although a range of industries use these minerals—often referred to as conflict minerals or 3TG—Enough chose to rank these two industries in particular because they have demonstrated the potential to be catalytic in the development of new policies and practices regarding responsible sourcing, and they are also particularly attuned to consumer pressure. These latest rankings acknowledge the steady advances that have been made since Enough conducted its first company rankings in 2010 and expose the considerable and urgent need for more action.

Graphic: A higher score indicates the company is making more progress on sourcing conflict-free minerals from Congo, while a lower score indicates little or no progress. The colored backgrounds in the graphic also break up the companies into tiers – ‘green’ being the best grouping ‘yellow’ in the middle, and ‘red’ the worst. Learn more about how companies were scored in the company response annex.

Apple Inc. emerged as the clear leader, scoring 114 out of a possible 120 points, plus an additional eight points in extra credit. Although even a perfect score would not mean a company has no more work to do, Apple’s consistent fulfillment of the rankings criteria indicates the company has committed substantial resources to developing processes for sourcing minerals from mines that benefit Congolese communities. Alphabet Inc., Google LLC’s parent company, ranks second overall, even though the company was not included in Enough’s 2012 rankings because at the time they were not manufacturing consumer products containing 3TG minerals. HP Inc., Microsoft Corp., and Intel Corp. round out the top five companies with scores ranging from 72.5-76 points. After that group, the electronics companies take a steep dive, with the next closest company, Panasonic Corp., only scoring 42.5 points and the lowest ranked electronics company, Toshiba Corp., at nine points. And while Signet Jewelers Limited and Tiffany & Co. lead the pack in the jewelry retail industry with 66.5 and 60 points respectively, companies from this industry generally lag far behind, with the remaining eight jewelry retailers scoring between zero and 20 points.

Companies were ranked based on four core categories of criteria:

Conducting Conflict Minerals Sourcing Due Diligence and Reporting
Developing a Conflict-Free Minerals Trade and Sourcing Conflict-Free Minerals from Congo, Particularly Gold
Supporting and Improving Livelihoods for Artisanal Mining Communities in Eastern Congo
Conflict-Free Minerals Advocacy

The results of these rankings indicate that top-scoring companies are enhancing their efforts with regard to sourcing conflict-free minerals from Congo; and progress in Congo’s mining areas demonstrates tangible impact to which company efforts contribute. Conflict minerals have never been the only source of income or motivation for armed groups. However, the regulation of the minerals trade as a result of pressure from end-user companies and other stakeholders has contributed to a significant decrease in violence and exploitation in mining areas.

At the same time, companies and industries must be held accountable to ensure progress continues, and these rankings serve as a tool for consumers and investors to do that. Violence has not completely disappeared from mining areas in Congo. Even if that were to happen, there would still be a range of issues to address—including support for alternative livelihoods and anti-smuggling mechanisms—before a conflict-free minerals trade in Congo would be able to flourish.

Enough’s 2017 rankings update companies as well as consumers, investors, policymakers, and Congolese communities on the state of play with regard to conflict-free sourcing efforts. It is important to note that the report does not examine or evaluate the ranked companies’ policies or practices with regard to any issues beyond conflict minerals from Congo. In other words, a high score in these rankings does not necessarily correlate with a company being responsible with their labor or environmental practices, or any of the other myriad of important issues that, along with conflict minerals, populate the broad universe of business and human rights standards.

Years of pressure from Congolese civil society and international consumers, student activism, legislative action, multistakeholder and trade association contributions, and corporate leadership have begun to turn the tide in Congo’s 3TG sector, where legal, conflict-free mining is starting to become more prevalent, offering benefits to many miners and mining communities. But major gaps in improvement remain and new challenges have arisen. Corporate transparency broadly, and the U.S. Securities and Exchange Commission Conflict Minerals Rule in particular, are under attack. Congo faces a constitutional crisis which could be further exacerbated by a resurgence of conflict mineral financing for armed groups. In order to maintain positive momentum, companies, civil society, consumers, and policymakers should continue to undermine the profit motives underlying Congo’s violence, and collaborate to support the development of thriving, diverse local economies and transparent global minerals supply chains.

The Enough Project recommends the following to companies in the consumer electronics, jewelry retail, and other industries that consume 3TG minerals, as well as their associated supply chains:

1. Improve and support public reporting on supply chain due diligence. All companies, including publicly traded, privately held, U.S. and foreign companies, using 3TG minerals should conduct supply chain due diligence in accordance with the Organisation for Economic Cooperation and Development (OECD) Due Diligence Guidance, and report publicly on that due diligence through their websites and according to any applicable legal requirements. Companies bound by the Securities and Exchange Commission’s (SEC) Conflict Minerals Rule in particular should continue to file their Conflict Minerals Reports, and improve that reporting by describing their specific supply chain due diligence practices in detail, listing their smelters and/or refiners and highlighting any innovative ways they have gone beyond the bounds of the law to support a conflict-free minerals market.

2. Conduct continuous due diligence, not just annual reporting. Companies should consider due diligence a continuous, year-round endeavor that will become easier and cheaper with time, but will never be complete and should be focused on making steady improvement in areas where risk mitigation remains necessary.

3. Engage in multistakeholder initiatives to design and support progressive initiatives. With the laws mandating conflict minerals reporting continually under threat of being repealed or undermined, it is critical for companies to begin or renew their engagement with multistakeholder initiatives in order to ensure the momentum built up since Dodd-Frank 1502’s passage will continue.

4. Support conflict-free sourcing opportunities and livelihood opportunities in mining communities with financial investment and public support. Conflict-free sourcing initiatives with strong traceability and assurance systems, particularly in the artisanal mining sectors in Congo, need investment. Companies can make an important impact by making financial contributions, improving their awareness of the challenges and opportunities related to developing conflict-free sourcing opportunities and livelihoods, and increasing public awareness of the need for these initiatives.

5. Set the bar higher. With supply chain transparency and in-region engagement improving, opportunities to set the bar higher and fill remaining gaps have emerged. Companies should ensure, for example, that their due diligence and risk assessment includes specific attention to mining in national parks in Congo and the wider region, given the unique proliferation, collateral damage, and rule of law challenges specific to mining and armed group activity in national parks.

Demand the Supply: Ranking Consumer Electronics and Jewelry Retail Companies on their Efforts to Develop Conflict-Free Minerals Supply Chains from Congo