Towards a fairer ICT supply chain
Research and fact-finding mission in Oruro, Bolivia in the context of the project ‘Make ICT Fair’
Executive report
With literature on metal supply chains beyond trade being very limited, CATAPA’s investigation on polymetal mining in Bolivia aimed at unraveling the subnational, national and transnational actors and processes involved in mining activities. Field research was carried out in the department of Oruro, Bolivia. The fact-finding mission provides elements to assess the local implications of the global ICT industry. This helps to shape a specific meaning of what “Making ICT Fair” would mean in each part of the supply chain by providing a framework to determine labour, community, environmental and legal issues involved in this targeted context.
In Oruro (Bolivia), the supply chain for tin, silver, lead and zinc – metals that are (amongst others) required by the electronics industry for the production of its devices – involves multiple actors. Before export, minerals here are extracted mainly by mining cooperatives (beside state mines and large and small-scale private mines) and sold to local trading companies, that are therefore the first suppliers within the international supply chain of these metals. Ore minerals are then concentrated. Tin is smelted by one of the two industrial smelters located in Oruro and then exported, mostly to the USA and The Netherlands. Silver, lead and zinc concentrates are directly exported to metallurgical plants in Asia (South Korea, China and Japan) and Europe (Belgium, The Netherlands and Spain).
Investigations were conducted from extraction, processing and smelting to export. Case studies provide concrete examples of six mining cooperatives, some local suppliers, the state smelter and the main international traders active in the area. This research revealed the consequences of the lack of mandatory social and environmental quality standards that could be imposed at the relevant scales to the companies when buying these metals; and the absence of traceability criteria that could create a link between the different actors and therefore a possible “social responsibility” of the buyers towards the local actors.
Assessing the implications of mining in Oruro:
The fact-finding mission aimed at collecting data on the impacts of mining in different stages of the supply chain.
Poor health and safety conditions in the mines
The specificity of Oruro relates to the major role played by small-scale cooperatives in Bolivia’s local mining economy, as this type of mining involves a large amount of the region’s workforce. These cooperatives are indeed a system of “self exploitation” as they don’t have direct contact with the companies that are buying their minerals. If the cooperative framework implies a certain freedom for the workers (who are supposed to be associates of the cooperatives), it also leads to operations being conducted in a very traditional way, i.e often still relying on manual work, despite a relative increase in mechanization the last decenia.
At the extraction stage, cooperative workers are subjected to irresponsible safety and health conditions, the most significant being the limited protection with respirators, which leads to a number of cases of silicosis (also known as the miners’ disease, caused by silica dust in the lungs).
Cooperative miners working in the areas of the concentration process are impacted by the uncontrolled and careless use of toxic substances such as xanthate, cyanide and kerosene, which cause direct irritation of the eyes but also long-term effects for the nervous system and internal organs. Health and skin disorders are caused by working in direct contact with acids and heavy metals as well as excessive exposure to sun and dust.
Another major problem within local mining activities is the lack of long-term planning. As miners expand their mining explorations, the lack of information available can lead to dangerous situations whereby an area is accessed that had previously been marked as a “no-go-zone”.
Endangering food sovereignty and biodiverse ecosystems
Despite the laws for the protection of “Mother Earth” in Bolivia and the requirement (in most cases) of acquiring an environmental license prior to conducting mining extractions, all mining activities imply large environmental damages. The main impacts are mine byproducts like acid water, the mining waste dumped into open air and the discharge of the chemicals used in the concentration processes (a pH of 3 or lower is common for the water flows around mining areas).
The mining exploitations have a serious impact on agriculture nearby and downstream. The environmental consequences often force farmers to become miners since their lands are too contaminated. It is hard to calculate all the impacts on the ecosystems stemming from the many mining sites and it is just as hard to remediate.
Women in a particularly precarious situation
Women in cooperative mining in Oruro are mostly elderly widows, having lost their husbands in mining or related activities, or single mothers with children. Their access to the cooperative membership is restricted because women are traditionally believed to bring bad luck inside the mines. Thus, they mainly work outside smashing discarded rocks or in other areas with less income possibilities.
The miners’ income depends on luck – either they find metal-rich minerals or they don’t. In the selling process, women are particularly tricked and paid an unfair price. Many women work informally, even outside the cooperative framework. They do not have health insurance or a pension fund. They are generally the main caregivers of their families, hence, women almost always carry the double burden of productive and reproductive work.
Consequences for the generations to come
The environmental degradation caused by mining activities has an impact on agricultural activities, making it impossible in many areas to grow crops, raise cattle or fish. This has led to the migration of farming communities towards mining sites and cities.
The lack of capital in this cooperative model makes it difficult to sustainably manage the mining activities. The short-term perspective creates uncertainty regarding the incomes of the miners, especially in periods of low prices, but also due to the finiteness of the ore they extract.
Due to low metal prices, cooperatives may have difficulties investing in improving productivity of the mine through machinery, engineering and exploration for future ore veins. International commodity trading companies benefit from their oligarchic position by using strategies to unfairly reduce the price of minerals at the origin, a strategy which directly impacts the cooperatives – the weakest link of the chain in international trade. The cooperatives face losses as a result.
Make ICT Fair in Oruro: a multi-scale framework
Complex situation for Bolivia to respect the human rights at stake
The investigations in Oruro have shown that there is a need to raise awareness on human rights violations in mining areas at State level in order to call for an improvement of their conditions. This is necessary to provide resources and controlling personnel in order to guarantee the enforcement of laws regarding the protection of “Mother Earth” and the different environmental regulations, but also for the monitoring of human rights regarding social, labour and safety standards.
Bolivia has ratified different international human rights instruments such as the Universal Declaration of Human Rights, which obliges States to provide “just and favorable conditions of work” (Article 23) as well as “the right of everyone to a standard of living that is adequate for the health and well-being of himself and his family (…) and the right to provisions in the event of unemployment in circumstances beyond his control” (Article 25 § 1).
The 1976 International Covenant on Economic, Social and Cultural Rights (ICESCR) of the International Labour Organization (ILO) obliges States to guarantee “safe and healthy working conditions” (Article 7 ii b) as well as the “highest attainable standard of health” (Article 12 i).
The American Convention on Human Rights (also known as the Pact of San José) also provides protection for Bolivian miners, which foresees the right of “Just, equitable and satisfactory conditions of work” (Article 7) and “the right to health” (Article 10).
Need for monitored fair and responsible criteria in the international trade
The international trade of Oruro’s zinc-silver-lead concentrates is dominated by a small group of international companies importing and reselling or smelting these minerals: Korea Zinc, Trafigura and Glencore. Even if these companies are not legally bound by the human rights treaties mentioned above, they are the core stakeholders within the chain and are responsible for these violations through a controlled fulfillment of the UN’s Guiding Principles on Business and Human Rights and the OECD’s Due Diligence Guidance for Responsible Supply Chains.
Tracing the supply chain aims at shaping a more responsible framework for the relations between the global companies and their different suppliers, as part of a growing call for social responsibility of transnational corporations. This would mean, regarding the ICT supply chain, that extracted minerals which fail to meet minimal social and environmental standards can not be traded on the international market anymore.
The OECD Guide Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas specifically defines “Due Diligence” as an “on-going, proactive and reactive process through with companies can ensure that they respect human rights and help them ensure they observe international law”.
“Risks” are defined in relation to the potentially adverse impacts of a company’s operations, which result from the company’s own activity or its relationships with third parties, including suppliers and other entities in the supply chain. This very broad scope considers that International trading companies are bound to respect this due diligence obligation towards all parties involved in the supply chain, including the mining cooperatives.
Call for international action
Making ICT fair would require that the international metal trading companies in Oruro follow the different steps of due diligence as requested in the Guide:
- Identify the factual circumstances involved in the extraction, transport, handling, trading, processing, smelting, refining and alloying and manufacturing of products.
- Identify and assess any actual or potential risks by evaluating the factual circumstances against standards set out in the company’s supply chain.
- Prevent or mitigate the identified risks by adopting and implementing a risk management plan, which may result in a decision to continue trade throughout the course of risk mitigation efforts, temporarily suspend trade while pursuing ongoing risk mitigation, or disengage with a supplier either after failed attempts at mitigation or where the company deems mitigation not feasible or the risks unacceptable.
In order to achieve satisfactory results for the local actors, the different stakeholders in the supply chain should become partners in a new monitored framework, where public institutions must have a role to push and control the different initiatives.
Assessed cooperatives as well as local suppliers showed clear interests in a monitored system aiming to improve the management of the supply chain, which is a starting point to be optimistic about the development of a fair and responsible ICT sector, which would need to include:
- Set up a fair price for the metals based on a fair minimum wage for the miners, not on the production costs of the smelters companies.
- Enforcement of the national laws as well as the international standards regarding environmental management in order to avoid – at least- further infiltration of the heavy metals into the soil.
- Investment in local multi-stakeholder frameworks to support local alternatives to mining in order to revitalize and diversify the damaged local economies.
- Invest in training and monitoring capacities of the local workers.
Read the full report below.