Cobalt Story: The Failure of Globalisation?
Cobalt is one of the most highly sought after minerals in the world, and it is not hard to see why. Amongst other uses, cobalt is a key raw material in the manufacture of rechargeable batteries, which power mobile phones, laptops and tablets, a wide a of electrical goods and batteries for electric cars.
However, deposits of cobalt ore are limited to just a few countries, including the Democratic Republic of Congo (DRC), which controls 49% of the world’s reserves concentrated in the south-east of the country.
See images below.
Location Map of Democratic Republic of Congo, (DRC)
Location of Cobalt Mining
This makes the DRC potentially one of Africa’s richest countries, yet in development terms it is at the bottom of the pile:
- HDI ranks 176 out of 189.
- GDP ranks 183 out of 189.
Cobalt is a Major Revenue Earner... but
Products using cobalt generate very large revenues for some of the biggest transnationals, household names like Google, Microsoft, Dell, Apple, Samsung and Tesla. See table below.
Revenue Data: 6 Global Companies
Revenue US $bn 2019
But, with all this revenue from global sales primarily in the world’s wealthier countries, how much of it trickled down into the economy of the DRC? The answer, of course, is very little especially for those at the bottom of the chain, the miners who dig out the cobalt for around $1 per day.
Nearly one fifth of the cobalt mined in DRC is extracted by artisanal mining. The estimate of the number of artisanal miners varies. There are probably over 200,000 individuals involved of which around 40,000 are children some as young as 7 years old.
The term is misleading. Artisanal miners dig by hand (DRC). They have no industrial tools, no protective clothing, no hard hats, not even facemasks to shield toxic dust or protective shoes. The work is dirty and dangerous (See image below).
Child Miners Under the Control of Armed Militia
Individual miners extract relatively small amounts of the mineral which they then sell to middlemen at local markets for a fraction of what the mineral is worth. For some, the situation is dire. These are the individuals who fall into the hands of local militias or powerful individuals often as a result of extreme poverty. They are compelled to work long hours, often without pay, a situation we recognise as modern industrial slavery.
It is easy to point to the ongoing internal conflicts which have pitted dissident armed militias against the governments of the day leading to lawlessness, endemic corruption and lack of protection for the population.
A UN report as far back as 2009 pointed to “a wide range of practices such as offering monopolies in exchange for kickbacks, embezzling money from state-run companies, creating joint ventures in which politicians were shareholders, and accepting unfavourable contract terms for the state in exchange for kickbacks (International Crisis Group, 2006).
All of which is probably true. However, whilst heaping the blame for this situation on the DRC might be convenient for some, it hides an inconvenient truth.
A Failure of Globalisation
The emergence of global corporations investing in emerging economies was supposed to act as an engine of growth for the world’s poorer countries. It was argued that he wealth they created would trickle down to improve the lives of the world’s poor and would, long term, reduce poverty and inequality.
That has clearly not been the case. Instead, many argue that the effect of global corporations has been:
- To lock wealth at the top of the chain, exploiting cheap labour and generating large returns for their investors, at the expense of the people like the miners in the DRC who are at the bottom of the pile.
- Profits are exported out of the country depriving it of the ability to improve the social conditions of its people.
- Far from reducing global inequality, the actions of global corporations have exacerbated it and ‘arguably, created the conditions for modern slavery to thrive.
A Failure to Take Responsibility
The cobalt miners in the DRC are at the bottom of a long and complex supply chain. From the miners to the dealers in the local markets and onwards. a significant proportion of cobalt from the DRC is sold by the child slavers to Chinese traders and smelters, who it is argued, are more concerned with price than human rights abuses. (James `Melville Byline Times).
The batteries then make it ‘downstream’ into the supply chains of the consumer electronics firms, often via a complex web of sub-contractors, and from there to the global corporations like Microsoft.
So where does the responsibility for the exploitation of labour and the abuse of human rights in the DRC? The global corporations reject all blame. They argue:
The complexity of the supply chains makes it difficult for them to determine whether the batteries they are purchasing are produced using cobalt mined by artisanal mining and child labour.
Any human rights abuses are the responsibility of their Chinese suppliers not themselves.
But is this a defendable position? Given the huge profits they generate shouldn’t they be doing much more? It appears that the corporations are simply refusing to take responsibility for what goes on down the supply chain.
While companies like Sony and Dell state that they don’t condone the use of slave labour in their supply chains they do not seem prepared to invest the necessary time or effort to ensure that the supply chains are effectively monitored.
These global corporations have massive financial power which they could leverage to impact upon operations down the supply chain if they so choose. At present they do not.
There are more questions than answers…
As technology advances so the demand for minerals like cobalt in the DRC, (similarly lithium extraction in Bolivia), is likely to continue to increase. Without a change in the outlook on the part of large multinational companies operating in the emerging economies the situation will remain bleak people like the artisanal miners of the Democratic Republic of the Congo.
The question is how to make change happen?
- Can the multinationals be encouraged to take greater responsibility over their supply chains?
- Are consumer boycotts a practical answer? Can we imagine people refusing to buy the newest mobile phones? The UK government amongst others is pushing ahead with plans to go fully electric on the roads by 2030 so boycotting electric cars is unlikely.
- If we don’t know which companies are operating on ethical grounds how can pressure be brought to bear on them?
- Does the answer lie in strengthening up existing laws and introducing new ones to force companies at the top of the supply chains to take more responsibility for ensuring that human rights are respected at the bottom of the chain?
- How can pressure be put on the Chinese companies and the government of the DRC to help to protect the human rights of the miners?