New OECD report challenges assumptions about risks in cobalt and copper sourcing

 

15/11/2019 - A new OECD report examines risks prevalent in cobalt and copper sourcing from the Democratic Republic of the Congo, as well as strategies for building more responsible mineral supply chains. The report “Interconnected Supply Chains” highlights the often-overlooked links in the supply chain, challenging assumptions that industrial and artisanal mining and refining are entirely distinct. It raises concerns about the low level of scrutiny of some risks and calls upon copper and cobalt users to extend due diligence beyond child labour to include corruption and human rights risk associated with security forces.

 

The report recognizes progress on several fronts, which could form a foundation for comprehensive improvements in the copper and cobalt sector. The DRC government has begun reform of its copper and cobalt trading markets, including the construction of new facilities designed to increase transparency in the supply chain. The government has extensive experience in monitoring informal sites in the east of the country and regulating how companies publicly report in line with OECD standards of due diligence. The OECD report recommends extending such systems to cover cobalt and copper in order to strengthen public reporting by companies and increase participation of affected stakeholders in efforts to improve conditions in mining communities.   

 

Civil society and some companies have also launched projects to address child labour and improve working conditions in the sector. The report highlights the need to urgently scale up these efforts, and provides several recommendations which, given the interconnected nature of the supply chain and importance of artisanal mining to the DRC economy, urge a focus on engagement and cooperation between industrial and artisanal miners.  

 

“Global buyers really need to step up their efforts and challenge their assumptions on industrial and artisanal sources of copper and cobalt” said Tyler Gillard, project head at the OECD’s Centre for Responsible Business Conduct. “Nuance matters, and the report shows it’s about more than child labour. The challenges are enormous, but the opportunities for impact investing, to support livelihoods dependent on mining income are just as big.”

 

“The interconnections in the supply chain, between industrial and artisanal mining of cobalt and copper, means human rights risks are diffuse,” said Ben Katz, co-author of the report. “This shows that categorically excluding minerals by type of production or supplier is neither realistic nor responsible; companies should instead be proactive about addressing risks, for example by improving working conditions in artisanal mining or taking action to address corruption in their supply chains.”

 

Background

Cobalt and copper are critical metals to the growing market for rechargeable batteries, particularly in electric vehicles, in addition to long-term established applications for the metals. There are now more than 300 million electric vehicles on the road, including more than 5 million cars. Consistently comprising over 60% of global production of cobalt, and the fifth largest producer of copper in the world, the Democratic Republic of the Congo plays an indispensable role in the upstream supply chain of these metals.  

 

The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (hereinafter “the OECD Guidance”) provides step-by-step recommendations endorsed by governments for global responsible supply chains of minerals in order for companies to respect human rights and avoid contributing to conflict or bribery through their mineral or metal purchasing decisions and practices.

 

Since 2018, the OECD Secretariat has convened a yearly meeting bringing together representatives of companies along the global cobalt supply chain, government and civil society to identify challenges and solutions related to the implementation of the OECD Guidance. The OECD is releasing this report from Kolwezi to coincide with an international stakeholder meeting, bringing together for the first time companies along the supply chain from miners in the DRC to consumer-facing brands, as well as several governments, intergovernmental organisations, and members of civil society.

 

Contacts

Tyler Gillard, Head of Sector Projects, Centre for Responsible Business Conduct (tyler.gillard@oecd.org; +33 6 17 78 52 46)

Benjamin Katz, Policy Adviser, Extractives, Centre for Responsible Business Conduct (benjamin.katz@oecd.org; +33 7 72 10 67 17)

 

Links

OECD Due Diligence Guidance for Responsible Mineral Supply Chains - https://mneguidelines.oecd.org/mining.htm