After almost two years of research and collaboration with a variety of partners, social enterprise Fairphone is pleased to announce it has successfully established the first pilot supply chain for Fairtrade-certified gold for the electronics industry. Fairphone is now the world’s first Fairtrade-licensed consumer electronics manufacturer to support responsible gold mining in Peru with the production of the Fairphone 2.
Sourcing more responsible minerals
Every smartphone contains roughly 40 minerals that originally enter the supply chain from the mining sector — a challenging industry in terms of human rights, as highlighted in a recent Amnesty International report on cobalt mines. Long before Fairphone created its first smartphone, the organization began as a campaign for fairer electronics, starting with a trip to cobalt and copper mines in the Democratic Republic of the Congo (DRC). Today, as the company is delivering the Fairphone 2 to its buyers, its focus on material and minerals sourcing is as sharp as ever.
Throughout the process of creating its smartphones, Fairphone has worked to map its supply chain, trace the materials used in the phone, and identify opportunities for making social and environmental improvements. The social enterprise is instigating interventions in a variety of areas, ranging from worker welfare to e-waste and recycling. From a mining perspective, Fairphone is focused on supporting more responsible sourcing of the four so-called conflict minerals (tin, tantalum, tungsten and gold).
With the development of the first Fairphone, the organization collaborated with (and continues to support) initiatives for sourcing tin and tantalum from conflict-free mines in the DRC. In parallel to developing the Fairphone 2, the organization turned its attention to tungsten and gold.
Because tiny amounts of gold are extremely valuable, this mineral is very prone to smuggling. Even outside of conflict and high-risk regions, gold mining poses a wide variety of social and environmental challenges, such as land disputes, sub-standard wages, unsafe working conditions, child labor, and mercury pollution. However, for many mining communities worldwide, it provides their main source of income and livelihood.
Supplier partnerships essential to Fairtrade gold supply chain
For its latest smartphone, Fairphone invested in a completely new design approach, developing a modular phone from the ground up, not only enhancing the device’s longevity and repairability, but improving Fairphone’s ability to select and build relationships with likeminded (sub)suppliers.
These supplier relationships have been essential for piloting with the gold supply chain in the electronics industry. The successful conclusion of this project is a result of the flexibility and enthusiasm of a variety of parties, including Max Havelaar in the Netherlands, Chinese gold salt manufacturer Zhaojin Kanfort, and AT&S — Fairphone’s printed circuit board supplier.
Fairphone sources the Fairtrade certified gold from MINERA SOTRAMI S.A. (Sociedad de Trabajadores Mineros S.A.), Peru, with assistance from Max Havelaar. MINERA SOTRAMI is a small-scale mining enterprise with 164 shareholders and employs 260 mineworkers as well as five engineers who manage the mine and processing plant. The gold mined here meets the Fairtrade Standard for Gold and Precious Metals, meaning that rigorous social, economic and environmental regulations are followed including child protection policies. In addition, the miners are guaranteed a Fairtrade Minimum Price and Premium that assists in sustainable development for the community. This way, the mine supports 500 families.
From Peru, the gold travels to Valcambi, a major refinery in Switzerland thT is licensed to process Fairtrade gold. After refining, Fairphone purchases a small amount of the Fairtrade-certified gold, which is then shipped to Kanfort’s office in Hong Kong, and transported to Zhaojin Kanfort’s gold salt-processing facility in China to create gold salt used by AT&S to electroplate the PCBs.
On January 25, 2016, the gold arrived safely in Hong Kong before heading to Yantai. There it will be added to the gold salt production process where it is mixed with gold from other sources (referred to as a mass-balance system). Although this means the gold is not traceable to the specific batch of gold salt for AT&S, it is the first time Fairtrade-certified gold can be physically traced to China to produce gold salt in a way that directly supports MINERA SOTRAMI in Peru.
An important step, but challenges remain
Fairphone is understandably proud of this achievement, and is very pleased to be able to connect Fairtrade-certified gold to the sales of its phones. However, the organization cautions that this supply chain is a pilot project and should be seen as a first step — challenges remain to scale up and optimize the supply chain over the long run for the rest of the industry.
By purchasing Fairtrade-certified gold, Fairphone hopes to demonstrate to the consumer electronics industry that by forming the right partnerships, it is possible to open up and map supply chains and influence more responsible sourcing practices. In addition, Fairphone believes that increased awareness for projects such as these will stimulate consumer demand for electronics that contain more responsible minerals — offering yet another reason for the consumer electronics sector to establish scalable and sustainable mineral supply chains.
Pre-orders of the Fairphone 2 continue in full swing through the organization’s online shop. With their purchase, the almost 15,000 Fairphone 2 buyers to date are supporting Fairtrade gold mining in Peru, along with other impact projects the company currently in progress. Orders received in January 2016 are expected to ship in February.