Critical Intel

Critical Intel
Conflict Minerals and the Game Industry: Progress and Setbacks

Robert Rath | 22 Nov 2012 17:00
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In Nintendo's 2012 Corporate Social Responsibility Report (CSR), President Satoru Iwata defines their corporate policy as: "Putting Smiles on the Faces of Everyone Nintendo Touches." As part of this buoyant statement, Iwata explains that Nintendo does not hire outside auditors to inspect their manufacturing partners, since they would rather have direct communication. "The goal of our on-site inspections is to share the essence of the rules with which we require production partners to comply. Our intention is not to force them to follow our rules, but instead we want them to understand the underlying meaning of each rule and why each rule is necessary so that they are able to realize the importance of CSR and voluntarily apply our rules." A footnote also states that production partners "are required to be involved in CSR and to encourage the promotion of CSR activities throughout the entire supply chain." In other words, Nintendo tells their partners what they think should be done, then turns a blind eye.

The word "smile" crops up a lot through the president's message. Nintendo is "spreading smiles around the world," they have a corporate "Smile-Spreading Project," and their growth depends on whether they can "connect the smiles of all people involved in Nintendo" to form a "Smile Value Chain" that makes everyone happy, from manufacturer to consumer.

There's no indication that Nintendo intends to audit this Smile Value Chain.

Skepticism of Tracking and Auditing
While government and industry have decided on tracking and auditing supply chains as an answer, some suggest that the minerals trade will survive attempts to clamp down on it, or that these measures are ineffective, or even that they may contribute to the instability in Eastern Congo.
One line of argument, for instance, is that the ongoing war in the region, not the minerals, is the driving force behind the illicit trade. After all, the instability predates modern electronics, and many other commodities such as ivory, rubber, diamonds, and cobalt have been the favorite cash-cow of warlords before tungsten and tantalum had much value. It is certainly possible that attempts to regulate conflict minerals, even if successful, may lead to the ascendency of another exploitable commodity; some militias, for example, have reportedly moved on to the bananas trade.

Others, such as the International Crisis Group, have suggested that the DRC's corrupt and inefficient government undermines regulation, both because they cannot enforce their authority on the militia-riddled North and South Kivu provinces and because their own soldiers play an active role in exploiting conflict mines. Any auditing program would necessarily require local stakeholders in order to implement it, and unless those local partners are well-trained and free from corruption any attempted regulation is destined for failure. For example, in September of 2010 President Joseph Kabila banned the production and trade of minerals in the Kivus and Maniema, and ordered the military to flush out the militias. Unfortunately, not only did this make the violence worse, but the DRC's largely unpaid military immediately set up shop on the mines themselves, a fact Kabila should've seen coming, since much of the DRC's army is made up of former militiamen that were integrated into the armed services. Take the case of General Bosco "The Terminator" Ntaganda, for example, who went from being a Rwandan soldier, to a rebel in Congo, to a soldier in the Congolese army and now the leader of the M23 rebel movement. While Ntaganda still worked for the Congolese army, his presence created an uncomfortable situation for UN Peacekeepers, who found themselves working with a man the International Criminal Court had labeled a war criminal. This isn't unusual in the DRC, whose president even led a unit of child soldiers for a time. Because of problems like this, it's an open question whether Congolese authorities are trustworthy enough or have the administrative capacity to take part in an audit program. As the violence and corruption continues, it becomes increasingly clear that major government reforms have to take place if any audit program is to succeed.

There is also a real question as to whether the audit programs have hurt Congo more than they've helped it. Because of the audit programs, smelters are beginning to avoid minerals from the DRC, leading to an unofficial boycott of Congolese minerals and putting thousands of miners out of work. As money dwindles from the minerals trade, it's the small miners who get hurt. Yes, previously they were taxed and oppressed by militias and the military, but at least then some money was coming to them, and the fact that they have no source of income doesn't improve their safety. Ultimately, cutting off legitimate miners will only make the situation more difficult and lead to more unemployed people joining armed groups.

Even among advocates of tracking and auditing, it's clear that simply walking away from the region isn't an option. One suggestion is for companies to take an active hand in the solution by establishing their own conflict-free mines. Motorola, for instance, founded its own mine in Congo in order to source clean tantalum. This arrangement gives Motorola a clean source of Congolese tantalum while improving mining conditions and paying workers a fair wage. Other companies are exploring this option too - the electronics manufacturer Phillips is lining up a project for a tin mine. Ultimately, economic development needs to be part of the equation if we hope to make a lasting impact.

Finally, and complicating this whole process further, recent events have made international groups unsure whether they'll even be dealing with the same government next year. The Terminator and his M23 rebels recently took Goma, the largest city in Eastern Congo, and announced their intention to march on the DRC capital of Kinshasa. M23 has backing from Uganda and Rwanda, and there have been reports that Congolese army defectors are swelling its ranks-in other words, it looks a lot like the rebellion that propelled the Kabila family to the presidency in 1997. If the conflict mine-financed M23 movement gains the leadership of the country, we can kiss a lot of local engagement on minerals sourcing goodbye.

The Future
Whether auditing supply chains proves to be part of the Congolese solution or not, it's clear that somehow we need to develop a lasting framework to deal with conflict minerals. Highly sought-after minerals aren't going away, and even if we never solve the problem, we can at least find ways to mitigate our role in it. In some ways, the DRC may even end up being the international community's training ground for mineral-funded wars of the future. After all, while tungsten, tin, tantalum, and gold are the conflict minerals of the moment, as technology advances there will be need for different metals to feed global industry, some of which will be present in destabilized and violent countries. Rare earth elements will likely play a larger role. Lithium will be the mineral of choice soon because of its use in rechargeable batteries, a need that will increasingly accelerate as we begin to switch to hybrid and electric cars.

You know where there's enormous reserves of lithium? Afghanistan.

Robert Rath is a freelance writer, novelist, and researcher based in Austin, Texas. You can follow his exploits at RobWritesPulp.com or on Twitter at @RobWritesPulp.

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