Apple, Microsoft and Huawei must do more for conflict free supply chains, report finds
Most of the world’s leading electronic companies and electronic vehicle developers are struggling to prevent conflict minerals, and minerals sourced through extensive child labour, from entering their supply chains.
This comes from a new report, “Time to Recharge” from Amnesty International, which studied the supply chains of electronics and car companies, and the results have revealed that although work is being done, too many companies are suffering from supply chain “blind spots.”
Two years ago, Amnesty International revealed in an exclusive investigation that batteries used by companies such as Apple, Microsoft and Renault could be linked to child labour in the Democratic Republic of Congo (DRC).
This news prompted Apple to become the first company in the world to fully publish the names of all of its cobalt suppliers, a move which has firmly cemented the company’s position as the industry leader in responsible cobalt sourcing.
The DRC is responsible for more than half of the world’s cobalt supply, with 20% of that supply mined entirely by hand. Amnesty International can reveal a long history of conflict mining, child labour, and harsh mining conditions linked with the supply of cobalt.
Apple, Samsung, Microsoft, Renault, Huawei are among the 29 companies that were surveyed in the report against key criteria, including the requirement that companies carry out what are known as “due diligence” checks on their supply chain and the requirement that they are transparent about the associated human rights risks. The organization gave each company a rating of “no action”, “minimum”, “moderate” or “adequate” for each criterion.
Apple and Samsung lead the way with “adequate action taken”, followed closely by the likes of Dell, HP and Tesla with “moderate action taken”.
Alarmingly for Amnesty International, Microsoft, Renault, Lenovo, Huawei are among a number of companies that fall under “no action taken”.
“When we approached these companies, we were alarmed to find out that many were failing to ask basic questions about where their cobalt comes from,” said Seema Joshi, Head of Business and Human Rights at Amnesty International.
“Nearly two years on, some of the richest and most powerful companies in the world are still making excuses for not investigating their supply chains. Even those who are investigating are failing to disclose the human rights risks and abuses they find. If companies are in the dark about where their cobalt comes from, so are their customers.
“This is a crucial moment for change. As demand for rechargeable batteries grows, companies have a responsibility to prove that they are not profiting from the misery of miners working in terrible conditions in the DRC. The energy solutions of the future must not be built on human rights abuses.”
Biden establishes Supply Chain Disruptions Task Force
The US government is to establish a new body with the express purpose of addressing imbalances and other supply chain concerns highlighted in a review of the sector, ordered by President Joe Biden shortly after his inauguration.
The Supply Chain Disruptions Task Force will “focus on areas where a mismatch between supply and demand has been evident,” the White House said. The division will be headed up by the Secretaries of Commerce, Transportation, and Agriculture, and will focus on housing construction, transportation, agriculture and food, and semiconductors - a drastic shortage of which has hit some of the US economy’s biggest industries in consumer technology and vehicle manufacturing.
“The Task Force will bring the full capacity of the federal government to address near-term supply/demand mismatches. It will convene stakeholders to diagnose problems and surface solutions - large and small, public or private - that could help alleviate bottlenecks and supply constraints,” the White House said.
In late February, President Biden ordered a 100 day review of the supply chain across the key areas of medicine, raw materials and agriculture, the findings of which were released this week. While the COVID-19 health crisis had a deleterious effect on the nation’s supply chain, the published assessment of findings says the root cause runs much deeper. The review concludes that “decades of underinvestment”, alongside public policy choices that favour quarterly results and short-term solutions, have left the system “fragile”.
In response, the administration aims to address four key issues head on, strengthening its position in health and medicine, sustainable and alternative energy, critical mineral mining and processing, and computer chips.
Support domestic production of critical medicines
- A syndicate of public and private entities will jointly work towards manufacturing and onshoring of essential medical suppliers, beginning with a list of 50-100 “critical drugs” defined by the Food and Drug Administration.
- The consortium will be led by the Department of Health and Human Services, which will commit an initial $60m towards the development of a “novel platform technologies to increase domestic manufacturing capacity for API”.
- The aim is to increase domestic production and reduce the reliance upon global supply chains, particularly with regards to medications in short supply.
Secure an end-to-end domestic supply chain for advanced batteries
- The Department of Energy will publish a ‘National Blueprint for Lithium Batteries’, beginning a 10 year plan to "develop a domestic lithium battery supply chain that combats the climate crisis by creating good-paying clean energy jobs across America”.
- The effort will leverage billions in funding “to finance key strategic areas of development and fill deficits in the domestic supply chain capacity”.
Invest in sustainable domestic and international production and processing of critical minerals
- An interdepartmental group will be established by the Department of Interior to identify sites where critical minerals can be produced and processed within US borders. It will collaborate with businesses, states, tribal nations and stockholders to “expand sustainable, responsible critical minerals production and processing in the United States”.
- The group will also identify where regulations may need to be updated to ensure new mining and processing “meets strong standards”.
Partner with industry, allies, and partners to address semiconductor shortages
- The Department of Commerce will increase its partnership with industry to support further investment in R&D and production of semiconductor chips. The White House says its aim will be to “facilitate information flow between semiconductor producers and suppliers and end-users”, improving transparency and data sharing.
- Enhanced relationships with foreign allies, including Japan and South Korea will also be strengthened with the express proposed of increasing chip output, promoting further investment in the sector and “to promote fair semiconductor chip allocations”.