'Powering Down Corruption' in Cobalt Supply Chains a Business Imperative

But the report also highlights the unique opportunity to address the problem now, before demand for cobalt rises even higher in the coming years.

“End-user companies have a critical opportunity to develop and implement robust supply chain practices that actively promote transparency and human rights,” Annie Callaway, Deputy Director of Advocacy for Corporate Engagement at Enough Project and author of the report, told Sustainable Brands.

A big part of the problem is that the main source of cobalt is a single country, the Democratic Republic of the Congo (DRC), which accounts for the lion’s share of global exports (about 60 percent), more than 10 times the second-largest producer, Russia. The DRC has many problems with governance and transparency, leading to widespread abuses in its entire mining industry, not just cobalt.

In 2016, a Washington Post investigation found that an estimated 100,000 cobalt miners in Congo use hand tools to dig hundreds of feet underground with little oversight and few safety measures, and that deaths and injuries are common. Others estimate that up to 10,000 children might be working in cobalt mines. Lax regulations also mean local communities are exposed to high levels of pollution that may be causing birth defects and breathing problems.

Enough Project released this report now because, as cobalt demand is growing rapidly, with prices more than doubling in 2017, cobalt will become an even more important mineral resource in the coming years. One of the key drivers is something the world needs more of: Electric vehicles — or, specifically, the lithium-ion batteries that power them, of which cobalt is a key ingredient; unfortunately, no efficient alternatives exist.

One way that companies can better ensure that their cobalt comes from ethical sources is to be more active in their supply chains, rather than relying on intermediaries — which is exactly what companies such as Apple and Fairphone are doing. Last year, Apple temporarily stopped buying cobalt from the DRC due to some of the same ethical concerns highlighted in Enough Project’s report, and today is working directly with its key supplier to better track its cobalt supply to ensure it comes from ethical sources. And Fairphone, which in 2016 established traceable supply chains for all four conflict minerals (gold, tin, tantalum and tungsten), is leading the charge for ethical sourcing of cobalt, as well, through a series of partnerships aimed at improving conditions in high-risk areas such as the DRC.

“As with conflict minerals, there are some companies that have really risen to the challenge and emerged as leaders in the push to ensure a responsible cobalt supply from Congo,” Callaway said.

Apple’s moves, and others by companies such as LG Chem to cut off purchases from known human rights violators, or Tesla’s efforts to reduce the need for cobalt in its vehicular batteries, are welcome. As cobalt demand grows — some estimate it could quadruple by 2030 — the entire industry needs to ensure that this rising demand does not result in more human rights abuses in the DRC, or elsewhere.

Thankfully, Callaway has seen that some companies are willing to engage on fixing this problem — a good sign, as it will take dedicated, collective work to clean up the cobalt supply chain. Enough Project doesn’t expect companies to achieve this overnight, but urges them to be open and frank about the challenges, and willing to act on the information they already have.

“We understand that the changes we call for will take time in order for them to be done correctly, so we're looking forward to working with companies over the coming months to ensure they understand the scope of our recommendations and can implement them fully,” Callaway said.

Enough Project plans to release an update sometime next year, highlighting companies taking action, giving the entire industry a model to work from. As the world gears up to move towards a renewable energy future, it’s time for all leading companies to take steps to ensure that the batteries that underpin that transition are not causing problems elsewhere in the world.

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