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Posts Tagged ‘Democratic Republic of Congo’

Conflict Minerals

Conflict Minerals

It’s unlikely that you think much about this, but when you press the BOOM!™ Audio Infotainment ON button,  it activates the audio system’s logic board which is soldered together with tin.  The Tantalum helps keep highly conductive materials in check and helps signals pass swiftly through the device.  And the Tantalum Oxide helped engineers create thinner, smaller electronics to reduce the space required on the motorcycle.  And the Gold which is highly conductive and used sparingly, is used in wires and in integrated chip (IC) films when a very pure connection between components is required.

There are numerous components on a Harley-Davidson motorcycle that may contain conflict minerals: brake pads, fuel tanks, on-board electronics, radiators and batteries.  I previously blogged on this HERE back in 2011.

For the uninitiated, conflict minerals — tantalum, tin, tungsten, and gold, or “3TG” — is sourced from or distributed by 10 countries in central Africa, namely the Democratic Republic of Congo (DRC).  The conflict minerals moniker comes from the fact that proceeds from their sale are used to fund armed groups that commit human rights crimes and other atrocities in regional African conflicts.  More people have heard about “Blood Diamonds” than conflict minerals, but the atrocities are similar.

A miner washes tin ore in the Kalimbi mine in the eastern Democratic Republic of Congo.

A miner washes tin ore in the Kalimbi mine in the eastern Democratic Republic of Congo.

And there is always the presence of the militant groups or organized criminal gangs, and the nexus between them which creates an intricate link between terrorism and organized crime.   These armed groups reap more than $100 million a year from the mineral trade in eastern Congo, and regularly slaughter innocents as they jockey to control the region’s most valuable mines and transportation routes.

Harley-Davidson has publically committed to supporting responsible sourcing of its materials from suppliers that share their values around human rights and environmental responsibility. The motor company is committed to complying with the “Conflict Minerals” requirements under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The 2010 law requires companies to publicly disclose whether their products contain conflict minerals.  And Harley-Davidson has until May 31, 2014, to file their first SEC disclosure regarding conflict minerals, with annual disclosures required after that.

Harley has posted and you can read their disclosure HERE.

In Section 4, it highlights that responses to their inquiries from ten suppliers which suggest that 3TG is sourced from Covered Countries, but it’s not clear if it was in the products or directly benefited armed groups.  Harley-Davidson communicated the need for additional information with the relevant suppliers and whether any of the 3TG that these suppliers reported were actually contained in components or parts that the suppliers supplied to H-D.

To be clear, Harley-Davidson did not find any evidence to suggest that any of the 3TG in their supply chain may have originated in a Covered Country or finances any armed groups in the Covered Countries, but did suggest that the quality of information that they obtained from their supply chains needed improvement and they were taking future actions to improve their processes.

So the question of the day is if given a choice, are you more likely to buy a “Conflict Mineral” free motorcycle?

I believe that H-D is a responsible global corporate citizen in all aspects of their business, both internally and externally.  But, wouldn’t it be cool if they pushed hard on this initiative and announced they are proud to manufacture the world’s first commercially available conflict-free motorcycle!

For more information you can track Harley-Davidson updates on this topic HERE.

A good video guide by VICE on the Congo is HERE.  The Conflict-Free Sourcing Initiative is HERE.  Looking to get more involved?  Check out: The Enough Project; The Falling Whistles; The Responsible Sourcing Network; Resolve.

Photos courtesy of Reuters and the Periodic Table.

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"Blood Rocks"

Children in the Democratic Republic of Congo (DRC) are being sent down mines to die so that motorcyclists in Europe and America can ride the freedom of the open road…

Attention getting statement?  Sure.  Does it also carry an overall air of guilt towards Harley-Davidson producing motorcycles with “conflict minerals” and implicate the consumers who are buying them?  Yes.

The phrase conflict minerals (often referred to as “blood rocks”) has quickly become a familiar term as concerned consumers and organizations begin to raise public awareness of the role the mineral trade plays in fuelling the violence raging in the DRC.

I’m talking in particular about tintungsten and tantalum – collectively referred to as the “3Ts” – and speculation on the motorcycle manufacturing supply chain at Harley-Davidson.

The Congo has been home to countless atrocities that afflict the civilian population; atrocities committed by various competing armed groups vying for profits from its rich supply of minerals know as the “3-Ts”.   Some five million people have been killed in the central African state since the start of a 1998-2003 war as the government and U.N. forces struggle to uproot rebel groups who are active in the minerals-rich east, particularly the North and South Kivu areas, which share a porous border with Rwanda, Uganda and Burundi.

Do I believe there is some clandestine attempt on the part of the H-D motor company to bring suffering to the people of the Congo?  No.  I’m sure that H-D management takes very seriously any allegation that metals in their supply chain may be fueling human rights atrocities.  In fact, you can read Harley-Davidson’s corporate governance which highlights environmental responsibilities, however, doesn’t directly address the monitoring of conflict minerals in their supplier chain.  I wanted to highlight the issue as the motorcycle industry is not immune.

First, let’s get a brief background on the minerals:

  1. Tantalum – is a rare, non-radioactive metal and in nature, tantalum (Ta) is almost always found with niobium (also known as columbium) in oxide form. The principal source for tantalum is the mineral columbite-tantalite.  60% of its commercial use is in the field of consumer electronics (cellular phones, DVD players, computers, gaming platforms, specialty electronics (radio), etc.) where it is used for its capacity to store and release electrical charges.
  2. Niobium – is added to steel and stainless steel to create high strength low alloy steel. It doubles the strength and toughness of steel due to grain refining while reducing weight. Therefore ferro-niobium alloy is used in oil and gas pipelines, chemical processing equipment, motorcycle frames, car and truck bodies, architectural steel, tool steels, ships’ hull, railroad tracks, nuclear reactors (helping keep reactors safe) or cutting tools in machining operation are fabricated from niobium carbide (to avoid high temperature deformation).
  3. Tin – is an important commodity and is used in hundreds of industrial processes and products.  An alloy of tin and niobium is used to make superconductive wire. Tin is also used as plating to avoid corrosion of various metals and can be found in items such as food packaging, culinary equipment, electronics, tin chemicals, plumbing solders, engineering alloys, pewter and bronze in music and arts, dental amalgams, anti-corrosion and engineering coatings, wine capsules and fire retardants.
  4. Tungsten – has the highest melting point of all metallic elements and because it is extremely stable at high temperatures, it is used in parts of spacecraft and missiles, high-speed cutting tools or rocket engine nozzles. Combined with carbon in tungsten carbide (WC), it becomes a very hard compound, used for tips of drill bits, high-speed cutting tools or mining machinery.

In the DRC there are thousands of independent artisanal miners working to make a subsistence living.  Clearly achieving responsible sourcing of minerals in the DRC is a complex multi-stakeholder process that must be viewed from a logistical, political and financial standpoint. All the various groups have unique and sometimes competing objectives and priorities, and all are claiming to put the best interests of the victims at the forefront of their initiatives.

I’m of the view that talk is cheap and last year President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act.  It wasn’t just financial reform he signed into law, but in Section 1502, the Conflict Minerals section of the act,  it contains a stipulation that requires public companies to disclose the use of such conflict materials in independent audits filed with their annual financial reports.

Enforcement will be through embarrassment.   If a company uses conflict minerals “necessary to the functionality or production of their products,” the company must disclosed the information. Companies must also detail their due diligence on the source and the chain of custody of the minerals.  If a manufacturer can demonstrate that the metal it uses is not from the DRC, it may state that its metal is “DRC conflict free.”   But if a company cannot determine the source of its mineral after a “reasonable country of origin inquiry” or if the company determines that its metal did originate in the DRC, it must make those disclosures.

Not knowing the source of metal could be problematic for Harley-Davidson, particularly for metal, where such a large percentage is derived from scrap. We don’t fully know the market consequences or the effect on production and metal segregation or on international competitiveness as a result of this law.  It’s possible the law will distort the market and increase costs.

Yet conflict minerals are inevitably getting into the H-D motorcycle manufacturing supply chain and that I, along with you, purchased a motorcycle which contains conflict minerals.  Once we get past the “who’s at fault” mentality we can focus on ideas that will make a difference.  I for one would like to know that my “wind in the face” motorcycle appetite didn’t help fuel human rights atrocities and believe that companies that don’t use conflict materials and can label their products “conflict-free” will discover just how lucrative being conflict-free can be.

Photo courtesy of Engadget.

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