Ethical Implications and Social Responsibilities of Managing Conflict Minerals in the Global Value Chain

Abstract

The booming trade of conflict minerals has resulted into one of the world’s worst cases of bloodshed and poverty with armed militants taking control of eastern Democratic Republic of Congo (DRC). This is largely due to the modern world dependence on digital products. This paper aims to shed some light on the possible ethical implications and social responsibilities of relevant stakeholders and the governments have in relation to the usage of conflict minerals.

Situation thus far

What are conflict minerals? Conflict minerals are minerals are associated to the armed conflict in eastern part of DRC which is the epicentre of the conflict. Minerals such as coltan (tantalum), cassiterite (tin), gold and wolframite (tungsten) are used to finance conflict happening in eastern Congo. In 2008, the estimated value of trade for the conflict minerals is a total of $184.8 million USD.

Concerns with regard to the use of conflict minerals have been increasing over the years and this is largely due to the growth of digital technology. The growth of digital technology since late 1990’s has seen cell phones and personal computers evolving into “the” ubiquitous necessity of modern life. In year 2012, there are over five billion mobile phones in used in the world, along with 2 billion personal computers by the year of 2014. The exponential growth of digital technology has resulted into a high demand for minerals such as tantalum, in order to satisfy the production demand. This has resulted into armed militants exploiting people to obtain such minerals for wealth and power leverage on the region. The workers in the mines often suffered from extreme working environment and are paid meagre amount of wages.

A U.N. report in 2001 highlighted the link between the armed conflict and DRC’s mineral wealth however they did mentioned that the blame does not lie on the hands of the producer of cell phones and personal computer. They mentioned that the mining companies supplying for the producers are “the engine of conflict in the DRC.” The minerals that originate from East DRC switches hands several times before reaching the processing factory where it is processed and ship off to factories for production.

Following the revelations brought forth by the U.N. report, many mining companies denied any involvement with regard in buying the minerals from the armed groups in the conflict region. Processing companies also affirmed the public that they will not buy minerals originated from the conflict region. Nonetheless, it is difficult to trace the origin of them minerals due to the intricacies with regard to the movement of them minerals along the value chain which will be further discussed in the latter part of the report. Solutions to effectively tackle the problems are being implemented by many authorities in the world such as the United States’ (US) Dodd-Frank Wall Street and Consumer Protection Act which was implemented on July 2010. This signals the intent of ending the usage of conflict minerals but this still requires the contribution by all stakeholders. The first step in doing so would be to first identify their social responsibilities in managing conflict mineral follow by taking on such responsibilities.

Ethical Considerations

Deception and Human Right Violations

It is known that conflict minerals reach the hands of the processing companies via illicit means and deception is often required in order to make it happen. Under Kantian ethics, lying is not morally permissible. Lying hinders truth and because of that, it impairs the ability of a decision maker to make better decisions. The distortion of truth itself causes some form of detriment to the stakeholders as certain information is withheld and asymmetrical information causes moral hazard and adverse selection which is a form of market failure. Societies depend on honesty and truthfulness to ensure continued existence and failure on that will build distrust in which will cause a society to lose its effectiveness.

In addition the conflict minerals trade has resulted into the violation of human rights. The militants’ pursuit of wealth and power through supplying such minerals in Eastern Congo has resulted into the destruction of communities and loss of lives. Forced labour, rape and torture are the common methods that the militants used to suppress the communities living near the mining region and also to increase their mining output level. It is clear that the conflict minerals trade has resulted to suffering and devastation that is definitely not morally permissible.

Ethical Trade-offs

Advocates of utilitarianism would suggest that so far as long as the usage