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Company responses to the makeITfair list of principles (July 2008)

Context

In January 2008, makeITfair held an international roundtable on the basis of three research reports dealing with CSR issues in the extractive phase of consumer electronics. At this roundtable, the research results were presented to seven of the electronics companies, as well as representatives of the EICC and GeSI. After this roundtable, makeITfair developed its List of Principles, in coordination with a number of NGO’s and initiatives that deal specifically with mining issues. The List of Principles was sent to all major electronic brand companies, with the request to issue a public response on how they would take up these recommendations into their CSR and business approach.

makeITfair received a response from the following seventeen companies: Dell, IBM, Microsoft, Apple, Fujitsu Siemens, Hewlett-Packard, Lenovo, Motorola, Nintendo, Nokia, Philips, Samsung, Sony, Sony Ericsson, ST, TomTom and Toshiba.

One front runner

HP is the only one of these seventeen companies that responded directly to the List of Principles that makeITfair developed. In its detailed and extensive response, HP indicates that it has conducted a study into its own supply chain, in an effort to track the metals used. It also mentions the company’s strategy of direct engagement with its first tier suppliers, and will request these suppliers to provide declarations of conformance to the EICC from its metal suppliers. HP suggest to conduct a feasibility study to attempt to trace the tin that it uses back to the mines, and initiate a cooperation between HP, the EICC, and several CSR initiatives in the mining sector to address the issues identified. This response is welcomed by makeITfair, and the coalition expresses its hope that these intentions will lead to concrete actions and noticeable improvements. Find the detailed response of HP here.

The middle of the road approach

A further twelve companies responded to makeITfair’s list of principles by sending or making mention of an industry response issued by the EICC and GeSI. These were Samsung, Motorola, Dell, Nokia, Lenovo, Sony, Sony Ericcson, Philips, IBM, ST, Apple and Fujitsu Siemens.

The industry response mentions the difficulty “to trace the metal used in a particular product to the original source”, the added complexity of metals being mined at numerous countries and the proportion of artisinal mining. As the companies do not purchase the metals directly, they feel that the electronics industry’s “ability to address social and environmental concerns at raw material level could be strengthened by investigating options to work alongside other major end-use sectors“. They are concerned about the “allegations of poor conditions in the supply chain of metals used in electronics products” and are looking at possible collaboration with existing multistakeholder initiatives on social and environmental conditions in the mining industry.

The industry response makes prominent mention of the study into the raw materials  that was released on the 23th of June 2008.  The study looked into the use of several metals by the electronics industry, the supply chain and the conditions under which the metals are mined. “Based on this study’s findings, there are opportunities for the EICC and GeSI members to

influence social and environmental performance in mining and metals production. However, this will depend on a clearer understanding of specific metals used in components and electronic products.”

The study concludes with several  recommendations;

  • The electronic industry should engage with appropriate existing SER initiatives and stakeholders, as identified in this study, possibly in partnership with other end-use sectors, to both strengthen efforts and reduce proliferation of overlapping initiatives.
  • The electronic industry should continue to emphasize activities in management of end-of life electronic products, including efforts to enhance materials efficiency after product use, and attention to recycling of metals.
  • Individual electronic companies need to further characterize specific metal content and use in electronic products. This supports the tracking of metals used in electronics, helps in tracing sources of materials, and facilitates recycling.

makeITfair is encouraged by the recommendations put forth in the report, and expresses its hope that these will lead to concrete activities of the industry and eventually to actual improvements in the supply chain.

Varying quality of individual responses

In addition to HP’s individual response described above, TomTom, Nintendo, Fujitsu Siemens, Nokia, Motorola, Philips, and Toshiba also provided makeITfair with individual company responses. Samsung and Sony Ericcson replied to Danwatch regarding metals sourcing and these responses are included as well. The responses varied significantly in detail, ambition and overall approach to supply chain issues and only a few of the companies have taken action or are proposing a follow up.

  • TomTom merely refers to its Ethical Trading Code of Practice without any direct response to the list of principles. They do recognise their role within the supply chain and ensuring that their policy is adhered to at each link. They mention the responsibility for enforcing the code down the supply chain and have their suppliers implement the code with their suppliers.
  • Nintendo, a company that was relatively more transparent in earlier requests than other companies, now issued a response indicating that it does not feel responsible for issues further down the supply chain; “extraction is not directly within our sphere of influence”. Nintendo adds that they “… believe that it is fair that we pay a fair price when we purchase parts”.
  • Fujitsu Siemens mainly describes its approach towards the use of hazardous substances, but makes no mention to CSR issues in its supply chain other than the EICC/GeSI response. “as an individual firm it can have little influence or impact so far down the supply chain – this can only be seen as a shared responsibility with other manufacturers and suppliers in the IT industry and the broader marketplace”. 
  • Nokia stresses the difficulties of tracing metals back to the mines when they are sold on the spot market. They feel that for “the purchasers of metals to audit and measure standards of all of their suppliers the metals industry first needs to increase transparency here”.
  • Toshiba indicated that it felt it could not respond to our list of principles due to the mere fact that the company was not present at makeITfair’s roundtable.
  • Samsung mentions that action is more likely to be taken on a collective than an individual basis. They started a research in their supply chain investigating the origin of a wider range of metals used in their mobile phones via supplier questionnaires. The questionnaires will be followed up by a more in-depth study starting in June 2008,  “which will attempt to identify the full supply chain from our first tier suppliers, their vendors, smelting companies, mining companies and initial origin”.
  • Sony Ericsson has specifically followed up on tantalum and cobalt use and asked suppliers with components containing these metals to explicitly state that it is unacceptable to provide components containing metals produced with child labour, illegal activities, or other abuses, in any step of the value chain. .  Sony Ericsson also mentions that they feel that mobile phone manufacturers can not change the whole metals and mining industry globally, but that they will continue to try to influence improvements.
  • Motorola mentions that trough the study of EICC and GeSI Motorola will identify where their efforts will have the greatest impact for change. They think an industry approach will have more impact than individual companies’ initiatives but understand they have individual responsibility as well. However, this would best be focused where it has the most leverage: through their direct suppliers and encouraging them to reach out to their own suppliers.
  • Philips has mentioned to makeITfair that it “has taken the initiative within the framework of the EICC, by proposing a pilot exercise for one metal, to increase transparency in the supply chain in the areas of concern for the make IT fair initiative. In order to do so, engaging with a credible mining imitative is most likely the first step to be made”.

makeITfair is pleased that these companies made the effort to respond to our requests, and is encouraged by those companies that express their commitments to concrete actions, such as Samsung, Sony Ericsson and Philips. However these commitments are few, and makeITfair is concerned about the lack of pro-active engagement shown by a number of companies.

Those lagging behind

Quite a large number of companies did not issue any form of response to our request. These include Acer, LG, Rim, Palm, Creative, and Logitech. makeITfair interprets these refusals to respond as a lack of transparency, a refusal to engage with civil society organisations, and a lack of ambition to address the grave social and labour injustices and environmental damage that take place in these companies’ supply chains. makeITfair will continue to address these companies, and will frequently give updates on these companies’ responses and (lack of) initiatives.

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