5 Companies Involved in "Blood Phone" Conflicts

By Erin McBride - August 28, 2012 | Tickers: CAJ, HPQ, INTC, IBM, SNE | 0 Comments

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In the popular book and film, “The Hunger Games,” the Capitol is portrayed as a region filled with superficial, frivolous sluggards who believe that the lower working class regions of the world are lucky to have the opportunity to serve and work for the Capitol's false aristocracy. The allusion and allegory to our modern society was veiled but obvious. We, the fortunate benefactors of “first world living,” often excuse our choices because we believe that someone down the line, in less fortunate surroundings, is grateful for the work.

Blood diamonds have been a known issue for several decades now. Blood diamonds, also known as conflict diamonds, are diamonds that originate from areas controlled by forces or factions opposed to legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments. The companies that mine blood diamonds hire people from these areas of conflict, putting money into the hands of dangerous factions, many of which have been known to kidnap and enslave child soldiers.

Thankfully, public awareness and corporate responsibility has led to a significant decrease in the mining of blood diamonds. But there is a new threat, a new sin, spreading across the poorest nations, fueled by the desires of the “Capitol”.

Blood Phones.

It is the term some smartphones and other electronics (including laptops, computers, and gaming systems) that use metals mined in the Democratic Republic of the Congo (DRC). Experts say these "conflict minerals" help fuel one of the world's deadliest conflicts. Over 5.4 million people have died from war-related causes, including disease and malnutrition, according to the International Rescue Committee.

The metals and minerals in question include gold, tin, tantalum and tungsten (known as the “3 T's”) and are mined in eastern Congo and are used in consumer electronics products. Tantalum is arguably the most significant metal on the list for the electronics sector because a high proportion of the metal’s consumption occurs in the production of capacitors for electronic equipment. Tin, while used pervasively in electronic products in the form of solder, has other significant industrial uses. None of the metals are exclusively mined in the eastern DRC, although that is where the conflict lies. All of the metals are used in other industries, including automotive, aerospace and jewelry.

Investors have the opportunity to help reduce these devastating conflicts by not supporting or investing in the corporations that use “conflict metals and minerals.” The Enough Project, an organization that advocates for the human rights of all Congolese citizens and work towards ending the ongoing conflict in eastern Congo, ranked the largest electronics companies on their efforts toward using and investing in conflict-free minerals in their products. Nintendo, Canon (NYSE: CAJ), Nikon, Sharp and HTC, received the lowest rankings of 0-8. Lenovo, Toshiba, Sony (NYSE: SNE), Samsung, LG, and IBM (NYSE: IBM) fared slightly better with scores between 17-27. (For a full list please see Conflict Minerals Company Rankings.)

Nintendo was the only company (out of 24) ranked by the Enough Project that received a score of zero, for taking no steps to ensure that its electronics do not support the militias or factions in the DRC and Africa.

"Nintendo is, I believe, the only company that has basically refused to acknowledge the issue or demonstrate they are making any sort of effort on it," said Sasha Lezhnev, senior policy analyst at the Enough Project. "And this is despite a good two years of trying to get in contact with them."

In a statement issued to CNN, Nintendo said it "outsources the manufacture and assembly of all Nintendo products to our production partners and therefore is not directly involved in the sourcing of raw materials that are ultimately used in our products."

Investors in Apple, RIM, Motorola, Intel (NASDAQ: INTC), HP (NYSE: HPQ), Philips, SanDisk, AMD, Acer, Dell, Microsoft, Motorola Mobility, Nokia, and Panasonic will be happy to know that these companies have put effective systems into place to ensure that the minerals and metals in their products are “conflict free.” A certification system is currently being developed to further certify the companies and the metals used.

Intel not only received the highest ranking from the Enough Project, with a score of 60m, the company has also issued a video and has a dedicated page on the corporate responsibility. Hewlett-Packard received a score of 54. According to their website, “Although companies who source these minerals are generally far removed from HP, typically multiple tiers from our direct suppliers, through our Supply Chain Social and Environmental Responsibility Policy, We have a shared responsibility regarding conflict-free mineral sourcing. The electronics industry can't solve this issue alone, but we believe that our existing supply chain SER program provides the platform for tackling this issue. We expect suppliers to conduct their worldwide operations in a manner that does not result in labor or human rights violations, including operations that contribute to the direct financing of armed conflict.

We, the everyday, simple citizen of “the Capitol,” have the power to make a difference in reducing conflict and some of the world’s most evil militias simply by choosing not to buy products from companies that fail to ensure their products are clean and safe, and by sending a message to those same electronics manufacturers that we don’t want conflict metals or minerals in our phones, computers, and other gadgets.

We can help put an end to conflict simply by choosing to support the right causes and turning our backs on those who do not stand with us.

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