Apple Takes Initiative in Verifying Smelters for Approaching Conflict Minerals Reporting Deadline

The world's second largest technology company, Apple, has acknowledged that the best way to ensure a conflict free supply chain is by having a process to verify the smelters in their supply chain as conflict-free. Last June, Apple, in a statement to Time Magazine, stated “’Rather than simply funneling its demand through a limited number of verified smelters or those that are not sourcing in the Democratic Republic of the Congo,’ Apple wrote, ‘Apple believes the best way to impact human rights abuses on the ground in the DRC is to have a critical mass of smelters verified as conflict-free, so that demand from other questionable sources is reduced.’” Instead of completely removing their sourcing from the covered countries, Apple has a plan to identity which smelters in their supply chain are sourced by conflict.

Tungsten, tin, tantalum, and gold, or more commonly known as “3TG,” are heavily used in the manufacturing of many consumer electronics. Not only Apple, but also many other technology giants such as Intel and Google, have taken the initiative to manufacture conflict-free products, and to trace the sourcing of the components in their products. In a recent article by Lynnley Browning from Newsweek, “Where Apple Gets the Tantalum for Your iPhone,” Browning does an excellent job reporting Apple’s transparency with conflict minerals: “So a year ago, Apple made a bold claim: It had audited smelters in its supply chain and none of them used tantalum from war-torn regions in the Democratic Republic of Congo (DRC).” Although this is only one of 3TGs, this claim has empowered human rights advocacies for increased transparency from international companies.

Browning states that Apple has for the first time stated all of the smelters in their supply chain:

“In February 2014, Apple for the first time named all the smelters in its supply chain that handle the four conflict minerals (tantalum, gold, tin and tungsten). It said CFSI audits showed the smelters did not use any tantalum mined in war-torn regions in the DRC. This month, Apple is expected to disclose fresh details on CFSI audits of its smelters.”

While in November Apple disclosed the breakdown of their smelters—whether they were fully compliant, going through the auditing process, or disclosed as unknown, according to the Newsweek article, figures from a 6-month comparison show progress:

“Apple said that of the 219 smelters it uses globally to process gold, tin, tungsten and tantalum, 106 were fully compliant, 55 were in the process of being audited, and 58 fell into the sketchy we-don’t-know category. The figures show progress—more smelters refining clean metal or undergoing audits to ensure they do—compared with just six months earlier, when Apple said that of the 186 smelters it used for the four metals, just 59 were compliant, 23 were undergoing audits, and 104 had not participated in audits.”

The Conflict Free Sourcing Initiative is where Apple has received most of its smelter information. Unfortunately, the tracing of conflict minerals through smelting and manufacturing processes can be difficult since many of the times these minerals are smuggled, and “bought and sold through shadowy networks of people.” Browning states that Tantalum in particular is “easily disguised” in the supply chain.

As companies ranging from the electronics to the pharmaceutical industry prepare for the May 31^st conflict minerals reporting deadline, the Newsweek article highlights the expectations for this years filings are increasing:

“With just 23 percent of reporting companies declaring that all of their products were DRC conflict-free, according to Audit Analytics, expectations are higher for this year’s disclosures.”

Indeed, non-issuers are seeing increasing customer requests for additional and in-depth smelter information. As tech giants such as Apple have moved towards the trend of supply chain transparency, it is equally essential that other companies understand the sourcing of the minerals in their supply chain as well—to trace potential smelters that carry 3TG.

Source Intelligence, a supply chain transparency and engagement company, has published a series of the Most Frequently Asked Questions for Smelter Verification. At this point in the reporting timeline, many companies are in their smelter verification processes. Smelter Verification for Conflict Minerals is a crucial step for both issuers and non-issuers. This series of Frequently Asked Questions for Smelter Verification addresses verification of supplier-provided information basics, best practices for issuers and non-issuers, publicly available information, third-party vendors assistance in smelter verification, and research and engagement for unknown smelters.  Click here to view/download the series of Frequently Asked Questions compiled by Source Intelligence’s global brand customers.

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To read full Newsweek article: http://www.newsweek.com/2015/02/13/where-apple-gets-tantalum-your-iphone-304351.html