With lead facilitation and workshop design by Helen Kerr, an sLab team comprised of Kerr, Greg Van Alstyne, Michele Mastroeni, and Mathura Mahendren (SFI MDes candidate) worked closely with IISD's Clare Church and Alec Crawford to conduct a futures workshop with stakeholders from industry and civil society.
Following is an excerpt (section 6) from IISD's final report (Church and Crawford, 2018), outlining
Mining can be an inherently risky industry. Companies and small-scale miners alike constantly struggle with accessing uncertain deposits, managing volatile commodity prices, ensuring worker health and safety, and avoiding environmental catastrophe. Conflict adds another, significant risk to mining: it can interrupt operations, undermine social licence to operate, damage reputations and, at its most extreme, threaten the lives of those involved. It is bad for business, communities and governments, and reducing conflict risks is in the interests of all stakeholders.
For the minerals required to make the transition to a low-carbon economy, there are real risks of grievances, tensions and conflicts emerging or continuing, as has been made clear in the case studies and mapping exercise presented above. For fragile states, weak governance, corruption, and the inadequate implementation and enforcement of existing laws all work against ensuring that the benefits of mining accrue to the population and the country’s sustainable development. Local voices are often left out of important decision-making, and meaningful engagement with communities does not always occur prior to the start of mining activities. Depending on the mineral, individuals can be subject to health and safety violations, human rights abuses, environmental risks and child labour.
There remains a lack of transparency across a number of key supply chains, including those for cobalt, lithium and bauxite. This opaqueness extends to the recycling industry, which will be an increasingly important part of mineral and material provision in the future. Regulations and laws supporting increased transparency are not yet widespread enough to capture all relevant minerals, though important lessons can be drawn from international efforts to eliminate conflict from 3TG supply chains. The complexity of these supply chains, which include miners, traders, smelters, refiners, manufacturers, transporters and consumers, can be intimidating, but should not deter the international community from the important work that needs to be done to ensure they are conflict free.
With this context as a starting point, and working with the OCAD University’s Strategic Innovation Lab (sLab), key stakeholders were brought to together for this research project to think through possible pathways for the extraction and trade of green conflict minerals, between now and 2040. A future was envisioned in which the minerals and metals required for wind, solar and energy storage are extracted and traded in a conflict-free way. In this future, responsible supply chains are transparent and enforced by law. The costs of compliance are low, and mining companies continue to reap profits from stable markets. Automation has eliminated many of the physical dangers of large-scale mining,17 and ASM has been formalized, both economically and legally. Communities are fully informed and involved in decision making around mining activities, and they see visible, local development benefits from these activities in their communities. Consumers and investors are aware of the impacts of their purchase decisions on conflict dynamics and respond in a way that minimizes these risks. Recycled minerals and metals are an increasingly important part of supply chains, and their supply chains are understood and regulated.
Achieving this vision by 2040 will require concerted action from a number of actors. Thankfully, stakeholders identified a variety of trends and initiatives already underway and in place that can be built upon and expanded to help achieve this vision. A number of responsible supply chain initiatives, due diligence guidelines and laws designed at reducing conflicts in mining are in place or under development and can be modified (if necessary) and applied to green conflict minerals. The supply chains of a handful of key minerals and metals have been mapped; OECD, for example, will release their Portal for Supply Chain Risk Information this year, which will help companies map and understand associated risks in their supply chains (OECD, 2018c). Ensuring that this work is extended to cover the green conflict minerals and the metals recycling industry would facilitate increased transparency and the identification of entry points for policy-makers. Civil society groups, in addition, have worked for years to identify governance weaknesses and methods to improve supply chain transparency. Ensuring that these identified best practices in responsible sourcing are not only addressed but also incentivized to private and public sector actors should be encouraged. Blockchain technologies could also be leveraged to facilitate increased supply chain transparency and accountability.
The ability of communities and civil society to act as watchdogs, through the rapid and widespread dissemination of information on mining activities, continues to grow and underscores the importance for companies to maintain their social licence to operate and minimize the reputational risks associated with conflict minerals.18 Financial investment funds are starting to divest from sectors and businesses that are having negative social and environmental impacts. Increasing information on the provenance of goods is also empowering consumers to make more informed decisions around their purchases, decisions that are further helped by a proliferation of scorecards on the social and environmental performance of companies. Automation, digitization and electrification are rapidly transforming health and safety risks for workers and nearby communities, while mining policy and law increasingly mandate that both are meaningfully engaged in decision-making processes across the whole mine life cycle, including the post-mining transition. Many countries are in the processes of designing and implementing policies, laws and regulations to formalize ASM activities.
As seen in the mapping exercise above, many of the minerals central to the transition to a low-carbon economy are found in high concentrations in states struggling with fragility, weak governance and corruption. This has not, historically, been a good combination; more often than not, the extraction and trade in mineral resources from such countries has been associated with grievances, tensions and, in the worst cases, violence. With the emergence and expected rapid growth of green energy technologies worldwide, many of these states can expect to see rising demand for their mineral riches. How they manage this increase will determine whether their populations prosper and thrive as a result of their country’s mineral wealth or if the benefits are simply capture by a select few.
Thankfully, the foundations are in place for ensuring that these 23 minerals do not emerge as the conflict minerals of the coming decades. Strong existing guidance on conflict-free supply chains, increasingly empowered consumers, more responsive and responsible companies, and increasingly accountable governments are the building blocks to ensuring that the risks posed by increased mineral extraction in fragile states are identified and mitigated. Civil society groups, the private sector and governments must work together to ensure that the future is one in which the green technologies designed to improve the planet also improve life at the local level. As the global community takes commendable steps toward meeting the aims of the Paris Agreement, it is essential that it does so without undermining peace, justice and strong institutions.
The following recommendations were developed based on the findings of the mapping exercise and case studies, as well as in coordination with select stakeholder consultations and the aforementioned pathways scenario.
6.2.1 Civil Society
Improve and expand mineral supply chain mapping for green conflict minerals. Concentrated efforts should be taken to map the supply chains of each of the minerals required for green energy technologies, with priority given to cobalt, lithium, graphite and rare earths. Doing so will help in the identification of conflict risks, as well as entry points for policy or legal interventions. Such a mapping exercise should incorporate end-of-life uses, the potential for mineral substitution and any risks in the recycling supply chain.
Raise awareness of green conflict minerals among policy-makers, businesses and the general public. While the conflict-related risks of 3TG are increasingly known and are being incorporated into private and public sector regulations, knowledge of the risks associated with green conflict minerals remains extremely limited. Civil society groups are encouraged to advocate for the responsible sourcing of these minerals as well as disseminate information regarding the conflict-related risks of these minerals’ supply chains to policy makers, the private sector and consumer audiences. The goal of these efforts should be to ensure that companies operate in a responsible way in these contexts, rather than avoiding them altogether due to the conflict risks involved.
Monitor and report on the due diligence implementation gap. While some improvements have been made in the alignment of company and government policies with due diligence best practices on conflict minerals, the implementation of these efforts has often lagged. Civil society groups are encouraged to continue to monitor company and government efforts at implementation and report on any improvements or failures, ensuring that responsible sourcing is meaningful and iterative rather than simply an exercise in checking boxes.
Support local communities to ensure they have the tools and capacities needed to engage in decision-making. Local communities must play an integral role in the responsible development, management and closure of mining operations and should share in the socioeconomic benefits of mining. As such, local communities should be engaged in decision making across the mining life cycle. Civil society groups should support this by providing information, toolkits, guidance and training to build local capacities to effectively engage in these processes.
6.2.2 Private Sector
It is in the best interests of private companies—both upstream and downstream—to reduce conflict risks in mining operations; doing so is a key part of maintaining their social licence to operate in the given communities. In addition, consumers are increasingly placing pressure on private and public sector actors to provide responsibly sourced products. Preventing mine-related conflicts and establishing and maintaining strong local relationships supports local development and reduces reputational risks. It also increases certainty across the supply chains of these minerals and green energy technologies.
Increase transparency along the entire supply chain. Private sector actors should take measures—regardless of home country legislation—to publicly report on any conflict-related risks found in their supply chain, in adherence with applicable laws and best current practices, such as the OECD Due Diligence for Responsible Supply Chains of Minerals. Upstream, downstream and recycling companies should conduct due diligence in their product sourcing on an ongoing basis and disclose this information publicly.
Engage communities in a meaningful way across the mineral life cycle. Companies should incorporate meaningful and informed consultations with stakeholders and local communities throughout both the development and maintenance of mining operations. Private sector actors are encouraged to use international best practices and models to do so, such as the International Finance Corporations’ Performance Standards 1 on Assessment and Management of Environmental and Social Risks and Impacts (International Finance Corporation, 2018). Private sector actors are encouraged to engage local communities in decision-making processes across the entire mineral life cycle, including the post-mining transition. Ongoing engagement will help to mitigate the risk of protests, civil unrest and dissatisfaction with the mining operations, improving certainty in mining operations and strengthening the social licence to operate.
Promote the use of responsibly sourced secondary minerals. Increasing the supply of secondary recycled minerals has the potential to alleviate some of the pressures that may result from increased mining in producing countries. The private sector is encouraged to engage in innovative strategies to improve mineral recycling and incorporate secondary minerals into their supply chains. These minerals must, however, be recycled in a way that aligns with current due diligence and responsible sourcing best practices.
Work with ASM miners to reduce conflict. Conflicts often emerge between ASM operations over access to land and resources. Companies should work with ASM miners, as well as with governments, to ensure that all stakeholders can benefit from a region’s mineral resources. This could include assigning lands within an LSM concession to ASM miners for their use; providing training programs and technical assistance to increase the efficiency and environmental performance of ASM operations, while reducing health and safety impacts; and develop skills among ASM miners that can be applied to jobs at the mine site but will still be viable livelihoods once the mine has closed (e.g., carpentry, masonry, bookkeeping). Particular attention should be paid to the differing gender dynamics of ASM operations, to ensure that benefit sharing and consultations are equitable and representative.
Governments have an important role to play in ensuring that the conflict risks associated with these minerals are minimized. But they must also work to ensure that the regulatory burden does not drive the private sector away from green technology; action on climate change still depends on the widespread adoption of solar, wind, EV and energy storage technologies.
Expand existing supply chain regulations to apply to green conflict minerals. Commendable measures have been taken in the past decade to improve the strength and transparency of supply chains for 3TG, both in producer and consumer countries. Governments should build upon the success of these regulations, using these mechanisms as a blueprint to expand responsible sourcing beyond 3TG and beyond the DRC to include all minerals required for green energy technologies. Particular priority should be given to cobalt, lithium and rare earths, due to projected rapid increases in their demand and their importance to the low-carbon transition.
Encourage improvements in the implementation measures of existing due diligence and responsible sourcing regulations. The public sector should take measures to improve the implementation gap in current supply chain governance. Governments are encouraged to work with both civil society groups and the private sector to learn from successes and failures in industry- and NGO-led initiatives and should work to enhance monitoring and reporting mechanisms and requirements. Governments also create an enabling environment to implement these international standards and best practices in order to bridge the implementation gap by offering incentives to champions of responsible sourcing in the private sector, by improving reliable data collection and by promoting dialogue between stakeholders (OECD, 2018d).
Ensure benefits of the mining industry are shared in a way that is equitable, fair and visible at the local level. Building out of meaningful community engagement, governments should ensure that the financial and socioeconomic benefits of mining industry, including any benefits derived from innovative technologies and automation, are shared in a manner that is equitable, fair and transparent among stakeholders. Dialogue should be both proactive and engaging, as well as involved at the design, implementation and closing of mining operations, as is defined in programs like Toward Sustainable Mining’s Guiding Principles (The Mining Association of Canada, 2018).
Incorporate mechanisms for stakeholder and community consultation into mining law and policy. Governments should ensure that community engagement and stakeholder consultations are not only included in mining policy and regulations, but that these policies and laws are also enforced. Communities should be able to participate in informed consultations throughout the development and maintenance of mining operations. The incorporation of meaningful community engagement throughout the entire mining life cycle is integral to the responsible sourcing of all minerals and has the potential to mitigate risks around fragility, conflict and violence.
Continue efforts to strengthen ASM operations. Governments should work to strengthen ASM operations, both economically and legally. This includes working to ensure that the women and men involved in ASM have clarity over their rights to land and resources; are aware of the laws and regulations that govern their participation in the sector (including those on labour and environment); and have access to the courts and to dispute resolution mechanisms should conflicts and disagreements arise.
Excerpt from Church, C., & Crawford, A. (2018). Green Conflict Minerals. International institute for sustainable development.