Perspectives in Responsible Sourcing

Problems complying with The California Transparency in Supply Chains Act (SB 657)

In April and May, STR Responsible Sourcing held Multi-stakeholder Roundtables in Los Angeles and New York to discuss the implementation of The California Transparency in Supply Chains Act. During the open dialogue sessions, multiple topics of discussion came up. Here are some of the highlights:

1. The need for clarification of the Act
2. Enforcement of the Act
3. Possibility of score cards issued by advocacy groups based on the disclosure information

Clarification of the Act
Several important questions came up with regards to the implementation of public disclosure:

• What exactly is compliance with the Act?
• How does the information have to be posted on the website in order for it to be conspicuous?
• Does the information have to be organized according to the exact five disclosure points listed in the Act?
• What are the definitions of “slavery”, “human trafficking”, “direct supply chain”, “verification”, “certification”, “contractor”, etc.?
• Will the Attorney General (AG) issue a best practice guide?
• Will the AG work with companies to achieve proper public disclosure, or will she make an example?
• Does the supply chain include licensees of your brand?
• “Tangible goods for sale” worldwide or only those sold in California?

The need for more guidance from the AG is apparent. According to recent information, the AG’s office is interested in brands taking a leadership position and sharing how they plan to disclose. Together with the AG, an exemplary disclosure can be developed by a brand and shared with others in order to facilitate compliance with the Act. As part of her outreach efforts, the AG is planning to hold a multi-stakeholder roundtable in the fall, if the budget permits. This roundtable will hopefully lead to guidance on how to disclose the required information.

Enforcement of the Act
According to the Act, the exclusive remedy is injunctive relief by the AG. The AG will be issued a list of all the retailers and manufacturers who should be abiding by the Act, so detection of those companies not complying with the Act should be easy.

The question came up whether non-governmental organizations (NGOs) would become monitors or even enforcers of the Act. This is not the intention of the Act, but one should certainly expect NGO reaction to disclosures.

Possibility of score cards issued by advocacy groups based on the disclosure information
It was not the intent of the Act to place monitoring activities in the hands of NGOs. However, score cards evaluating company activities in the supply chain already exist. See the Free2Work application introduced by the Not For Sale Campaign and the International Labor Rights Forum. And the information provided publicly by companies complying with the Act next year will no doubt provide valuable material for this score card and others. 

It was brought up, that NGOs should convene to come up with a common, standardized vision of a score card. Perhaps the private sector initiative focused on human trafficking introduced in October 2010 – BCAT, the Business Coalition Against Human Trafficking – in conjunction with other NGOs could take up this idea.

Stay tuned for more highlights from our Roundtable discussions. For more information on how to respond to SB 657, please see STR Responsible Sourcing’s California Transparency in Supply Chains Act page.

New York Government Efforts to Combat Human Trafficking

On May 4, 2011, STR Responsible Sourcing held a Multi-stakeholder Roundtable in New York to discuss the implementation of The California Transparency in Supply Chains Act. In a joint presentation, Christa Stewart from the New York State Human Trafficking Program at the Office of Temporary and Disability Assistance and Vilda Mayuga from the Bureau of Immigrant Workers Rights in the New York State Department of Labor addressed the state of human trafficking in New York State and the government’s efforts to combat this human rights abuse.

They started the presentation by sharing data on human trafficking in New York State. They pointed out that a report from Hofstra University (not published yet) found that service providers have come into contact with over 16,000 human trafficking victims in the New York area. Also, according to the State’s statistics, a total of 160 trafficking cases have been reported including a significant number of labor cases.

With regards to the ethnic background of victims of trafficking, the following statistics were provided and it was noted that victims include mostly women and children and that they are also trafficked domestically:

-          71% Latin American or Caribbean

-          18% Asian

-          7% European

-          4% African

Some adult victims were found to have been trafficked into the US as children.

Since the New York State law was implemented in 2007, only 44 arrests have been made under the law, including three labor trafficking related arrests.

Christa Stewart and Vilda Mayuga closed the session by emphasizing that more efforts have to be undertaken to raise awareness of the problem of labor exploitation and human trafficking.

During the ensuing open dialogue session at the roundtable, an important point about different definitions of human trafficking came up: In some standards, such as the UN definition of trafficking, the element of movement is essential in the existence of a human trafficking case. In New York State legislation, however, movement is not required if other components of force, fraud and coercion are present. In applying this to social responsibility and supply chain management, it is important to first evaluate whether slavery and human trafficking are actually part of the audit scope and second, to define what legislation should be followed.

Special thanks to Christa Stewart and Vilda Maygua for participating in our roundtable. Past roundtable contributions are available from Kay Buck (CAST), Rachelle Jackson (STR RS) and Simone Monasebian (UNODC). More information can also be accessed on STR Responsible Sourcing's California Transparency in Supply Chains Act Services page.

Addressing Human Trafficking - Contribution by Simone Monasebian (United Nations Office on Drugs & Crime)

On May 4, 2011, STR Responsible Sourcing held a Multi-stakeholder Roundtable in New York to discuss the implementation of The California Transparency in Supply Chains Act. As one of the presenters at this Roundtable, Simone Monasebian, Chief of the New York Office of the United Nations Office on Drugs and Crime (UNODC), gave an overview of the UNODC's activities and shared her comments on human trafficking:

As an office dealing with drugs and crime, trafficking - as an international crime - is included in the scope of the UNODC. All UN agencies address human trafficking but the UNODC is the agency that coordinates the activities and takes a broader view on this issue. With a base in Vienna, the UNODC has about 40 field offices dealing with human trafficking.

As to the origins of human trafficking legislation and its definition, Simone Monasebian noted that the first international treaty defining trafficking entered into force in 2003. Prior to this UN Convention, there were legal instruments dating back to 1919 that dealt with various forms of slavery and trafficking, but there was not one over-arching definition of trafficking.

The definition according to the UN (the Convention does not prevent member states from taking a broader view of human trafficking) contains three elements:

• Movement (recruitment, transportation, transfer, harboring or receipt of persons)
• Means (threat, force, coercion, abduction, fraud, abuse of power or vulnerability, or giving payment of benefits to the person in control of the victim)
• Purpose (exploitation including at a minimum: prostitution, forced labor, slavery or similar practices, and the removal of organs).

The United Nations Convention against Transnational Organized Crime which includes the Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime, has been ratified by 145 of 192 UN member states. The protocol is reviewed every two years. It is important to note that this Convention focuses on transnational crime, therefore, according to the UN definition, domestic human trafficking is not included. However, the Convention stipulates that signatories should adopt domestic legislation with a broad definition of human trafficking which would include criminalization of trafficking that occurs not only across borders but within a country.

The UNODC bases its work on Prevention, Protection and Prosecution (3 Ps). A lot of work has been done in the area of prevention through raising awareness of the crime of trafficking, but very little activity has occurred in the area of prosecution. Simone Monasebian noted that a UNODC survey conducted in 2009 found that 80% of 155 countries surveyed had zero to one convictions in the past year. It is difficult to combat human trafficking because of the clandestine nature of the activity.

The UNODC has estimated that the retail trade value of human trafficking is $32 billion a year. Although not the most profitable form of trafficking – compared to drug and arms trafficking – human trafficking is uniquely profitable because you can exploit a person for a variety of needs over the course of his or her lifetime. Most victims are women and children. According to UNICEF, 1.2 million children are estimated to be victims of human trafficking every year. The UNODC estimates that 2.5 million people are being trafficked at any one time and only one out of 100 victims is rescued. The UN puts out a report on the state of human trafficking every two years. The next publication is due in 2012.

In closing her presentation, Simone Monasebian addressed the activities the UNODC is undertaking to increase awareness of human trafficking. In 2006, End Human Trafficking Now introduced the Athens Ethical Principles for the private sector. The UNODC along with dozens of companies is a member of this campaign.

Further, the UNODC has two Goodwill Ambassadors, Mira Sorvino and Nicholas Cage, who help raise awareness and raise money for anti-human trafficking efforts. In addition, the UNODC provides technical assistance to non governmental organizations, private sector groups, police and law enforcement in the form of training and sharing best practices. The UNODC can assist companies in finding suitable partners for their cause.

Lastly, the UNODC leads multiple campaigns against human trafficking:

• Blue Heart Campaign Against Human Trafficking is an awareness raising initiative
• UN Global Initiative to Fight Human Trafficking (UN.GIFT) was launched in 2007 by multiple international governmental organizations to create partnerships between government, academia, business and civil society
• UN Global Plan of Action to Combat Trafficking in Persons was adopted by the General Assembly in 2010 to
  • Include a role for the media and the private sector in the fight against human trafficking
  • Increase efforts on collecting data with regards to human trafficking, and
  • Establish a trust fund for victims of human trafficking.

Special thanks to Simone Monasebian from the United Nations Office on Drugs and Crime for participating in our roundtable. Past roundtable contributions from Kay Buck and Rachelle Jackson are also available.

Case Study on Migrant Workers - Contribution by Rachelle Jackson (STR Responsible Sourcing)

On April 5, 2011, STR Responsible Sourcing held a Multi-stakeholder Roundtable in Los Angeles to discuss the implementation of The California Transparency in Supply Chains Act. As one of the presenters at this Roundtable, Rachelle Jackson, Senior Director of Sustainability Practices at STR Responsible Sourcing, presented materials on migrant workers and their vulnerability to exploitation:

In the past years, the number of economic migrants – migrants who strategically choose to leave their home country in order to find employment overseas and are hired to do so under contract – has significantly increased. Formal recruitment processes have been established between so called sending and receiving countries – the sending country benefiting from remittances provided by nationals working overseas and the receiving countries benefiting from the expanded labor force. However, there is the risk of exploitation in this migrant worker recruitment process.

The types of fees that are being collected by workers in both the receiving and sending country are numerous. They range from commitment fees over transport fees to so-called runaway insurance. Workers who do not have the money to pay those up-front fees often take out loans with interest rates ranging from 10-30%. So, whatever wages they do earn in the receiving country are soon diminished by debt payments. Even if workers want to return home due to poor working conditions or domestic instability that is a result of them being away from their family, the workers do not have enough money to pay the loan they took out or even the ticket back home, thus forcing them to stay on. In some receiving countries, there is no possibility of changing the employer, as the work visa only allows them to work for one specific employer. Therefore, legal migrants may become illegal or irregular during their stay, increasing potential vulnerability.

The foreign labor force in the United Arab Emirates is 90%, in Malaysia 20% and Thailand 10%. The risk of abuses like slavery and human trafficking in these countries is high. One example of making the public aware of migrant labor abuses Rachelle pointed out was the 2006 report issued by the National Labor Committee titled U.S.-Jordan Free Trade Agreement Descends into Human Trafficking and Involuntary Servitude.

STR-RS has had the opportunity to work with companies on assessing recruitment processes in Nepal, Malaysia, and the Philippines by referencing local laws for recruiters. This activity is not currently in the scope of companies’ social compliance programs, but some have decided to venture beyond due to the high risk of potential abuses before an employee reaches the factory floor.

In Nepal, for example, the recruiter utilized sub-recruiters which created more ambiguity about the employees hiring process and potential fees collected or contracts agreed upon. Often, workers do not recall what they paid along the road to employment. Access to this information may only come through an investigative process outside the facility. Thus, going beyond the walls of the employer is important to assess the risk of human trafficking.

An example of a company that has established standards specifically related to migrant workers is the Arcadia Group. This U.K.-based company has developed guidelines explicitly for migrant workers. This is a step in the right direction to address the supply chain risk of slavery and human trafficking. The California Transparency in Supply Chains Act is definitely putting pressure on companies to go beyond the current norm of social compliance and address issues like recruitment processes where employees are vulnerable to abuse.

Stay tuned for more roundtable contributions and click here to view the first blog in this series - Kay Buck's (Executive Director, Coaltion to Abolish Slavery & Trafficking) contribution to the Los Angeles roundtable.

Modern-day Slavery and Human Trafficking - Contribution by Kay Buck (CAST)

On April 5, 2011, STR Responsible Sourcing held a Multi-stakeholder Roundtable in Los Angeles to discuss the implementation of The California Transparency in Supply Chains Act. As one of the presenters at this Roundtable, Kay Buck, Executive Director of the CA-based not-for-profit organization Coalition to Abolish Slavery & Trafficking, shared her comments on modern-day slavery and human trafficking:

Kay Buck started her presentation with an overview of the origins of CAST – referencing the El Monte Sweatshop Case; a case in 1995 where 72 Thai garment workers, mostly young women, were found to be enslaved, in some cases up to a period of 8 years. Kay pointed out, that since then, there have been many more cases of slavery or human trafficking in the U.S. Most recently, over 400 Thai farm workers were identified to be working under exploitative conditions on pineapple farms in Hawaii. Slavery and human trafficking cases are not only abroad but within the U.S. She emphasized that human trafficking and slavery is happening everywhere—including our backyard in the US.

According to the 2010 Trafficking in Persons Report issued by the Department of State, 12.3 million people are victims of modern day slavery today. Another statistic from Free The Slaves notes that 27 million persons are in slave-like conditions today. And according to the Congressional Research Service as many as 17,500 people are trafficked into the USA on a yearly basis.

Since its establishment in 1998, CAST has handled over 350 cases of slavery and human trafficking. In the Los Angeles area, there have been cases of sex slavery, domestic servitude, and sweatshop labor in agriculture, restaurants, hotels, and assisted living establishments.

As a coalition, CAST not only represents survivors of slavery and human trafficking but also consumers. In the last 5 years, there has been a rise in demand by consumers to know if the products they buy were derived from any exploitation. Together with the Alliance to Stop Slavery and End Trafficking (ASSET), CAST co-sponsored the California Transparency in Supply Chains bill – a bill driven by consumer demand and coined as a consumer empowerment bill.

In closing, Kay underlined that CAST does not have any illusions of the Act ending slavery in supply chains. However, CAST envisions this as an opportunity to create open dialogue between the business community and non-governmental organizations (NGOs). In the future, in partnership with companies, amendments to the Act can be made or additional bills could be introduced to bring about further engagement by the business community and collaboration with NGOs to further mutual goals as it relates to responsible sourcing and human rights. The anti-slavery movement is gaining a great deal of recognition and momentum similar to the progression of the Green Movement for environmental justice issues; it is worth exploration of ways the business and NGO communities can work together.

Special thanks to Kay Buck from the Coalition to Abolish Slavery & Trafficking for participating in our roundtable.

Road to stamp-out child labour

To work towards the goal of combatting the various challenges to end the worst forms of child labour a ‘Global Conference on Child Labour’ was held in May 2010, at The Hague, The Netherlands. This was organized by the Dutch Ministry of Social Affairs and Employment and the ILO. The outcome of this conference was ‘Roadmap for achieving the Elimination of the Worst Forms of Child labour by 2016 ’. ‘Global March Against Child Labour’ was one of the civil society members of the Consultative Group at the Conference.

An initial step of commitment towards ratifying the ILO Convention 182 (Worst Forms of Child Labour) as well as ILO Convention 138 (Minimum Age of Employment) was taken in 2006 by the ILO member states through the adoption of a ‘Global Action Plan’ to create a world free of any child labour by 2016. However, the passage of years did not see much progress towards the achievement of this goal.

Roadmap 2016 & the Garment Manufacturing Sector

Since the adoption of ‘Roadmap for achieving the Elimination of the Worst Forms of Child labour by 2016 ’ was not an end in itself, but a means to the end goal, the urgent need for commitment by all the actors involved was emphasized upon in the conference held in 2010. Twelve months from its implementation, an international consultation was organized by ‘Global March against Child Labour’ on May 11, 2011 in New Delhi, India, to evaluate the till-date status and progress and to underline the key challenges remaining in tackling rampant child labour practices. This was to ensure decent working conditions along with implementation of core labour standards in all the levels of the garment manufacturing supply chain in India.

‘Global March Against Child Labour’ is a worldwide coalition of trade unions, civil society and teachers’ organizations, in its struggle to eliminate the worst forms of child labour practices, protect and promote children’s rights to provide education and freedom from economic exploitation across the planet. Through the promotion of decent work, education, social protection and poverty alleviation, the organization advocates policy changes and coherence amongst the above all levels of the organized and un-organised work sectors.  

The main objective of this consultation was to facilitate a dialogue and engagement between multi-stakeholder groups, national government representatives, domestic and international manufacturing and retail companies, national and international trade unions and civil society organizations, national and international certification and social compliance initiatives, UN agencies and international organizations and other interest groups present at the conference. Such an exercise brought forth a grand effort of coherence and solidarity amongst all the above mentioned bodies in an endeavor to bring together the various individual public and private initiatives which already exist to achieve Roadmap 2016. This international consultation also provided a platform for sharing of experiences and expertise, building partnerships, thereby elaborating the broader picture of the current environment of the garment sector and the realizing the burning necessity to facilitate highly structured reform wherever practicable.          

The forum saw some eminent actors of the above mentioned organisations who shared their knowledge, experience and best practices as well as the many obstacles faced by each of them. The talks given by the various personalities such as Mr. Kailash Satyarthi (Global March), Mr. Ashok Singh (Ministry of Labour, India), Ms. Tine Staermose and Mr. Ben Smith (ILO), Mr. Peter McAllister (ETI), Ms. Lakshmi Menon Bhatia (FLA) among others, were very informative. Although we see child labour practices around us everyday, the consultation gave us an insight into the underlying facts. The speakers imposed that constant criticism and accusation by the civil society needs to be replaced by active participation in educating the parties involved (children, parents, employers). Subsequently, the gross lack of coordination and coherence between NGOs, unions, stake holders and manufacturers which lead to failure of eradication of child labour practices was highlighted. Convergence of  the existing gaps between the local child protection laws, current government policies and initiatives tackling the child labour menace has become the need of the hour. Hence, the 3 C’s (convergence, communication and collaboration) amongst the various stakeholders was emphasized to move further towards the goal.

At the end of the discussion round, both the industry and the non-industry groups emerged with their individual lists of pledge and expectations (from each other) in order to make Roadmap 2016 an achievable reality. Both groups agreed to and committed the following practices in their role to wipe out child labour from the garment sector:

• To collaborate with each other;
• To implement stricter monitoring practices;
• To create awareness and address issues at all levels of the supply chain;
• To associate and connect the individual practices of stamping out child labour so that the actual goal can be achieved;
• To recognize the complexity and build partnerships based on trust and confidence;
• To be able to deal with media expose (if any for the brands), take onus and commit towards appropriate action to combat any child labour issues.

Finally, it was understood by all present that 2016 is the deadline for elimination of the worst forms of child labour (as per the commitment made at The Hague), which could only be reached by initiating and implementing all the opportunities evolved out of the consultation. It remains imperative that all the working groups promote and follow the recommendations which emerged from the event. It is also crucial that they coordinate with open and frank exchange of ideas, and correlate each others’ actions. This remains the most effective way of working towards stamping out child labour.

However, it remains to be seen how much can be achieved by the industry and the non-industry groups towards remediation of child labour practices. It is a daunting task in India to primarily map school drop-outs, work done by children at various sub-levels of the supply chain and child labour trafficking practices, etc. Ultimately, it all depends on the actors, to not just adhere to the 3 C’s, but to be the change they want to see, in order to realize the goal of Roadmap 2016.      

Contribution by Gargi Banerjee and Dona John. 

Do due diligence efforts on conflict minerals need more teeth?

Last week, the OECD Ministerial Council endorsed the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-affected and High-Risk Areas. This endorsement by 42 countries, as well as the earlier endorsement of the document by the Heads of States and Governments of the International Conference on the Great Lakes Region (ICGLR), makes the Guidance the most widely recognized standard for due diligence on conflict minerals. Furthermore, the EICC-GeSI initiative has amended their Conflict-Free Smelter (CFS) Program, adding the implementation of the OECD Guidance as a mandatory requirement for any smelter sourcing minerals from the Democratic Republic of the Congo (DRC) or its neighboring countries in order to be eligible for the CFS Program.

The OECD Guidance relies on a system of information gathering and supplier assurances. It does not ask downstream companies to ensure full traceability of the minerals in their products. Similarly, the CFS Program only requires smelters to fully trace their purchased minerals back to the mine, as well as (if minerals from the DRC or neighboring countries are among the purchases) to implement the OECD Guidance. It does not request the same type of information from component or product manufacturers.

Upstream suppliers in the African Great Lakes region are working towards mineral traceability and certification schemes, many of which involve significant investments in human and physical capital. At this point in time, most of the schemes aim at tracking minerals from the mine to the export station (actually still leaving a gap between the point where minerals leave East African ports and the arrival of the shipments at the smelter level).

Just as there are transactional records in the upstream supply chain, downstream companies can be expected to keep records on their purchases and sales of products containing conflict minerals. One is to assume that if it is possible to trace a bag of minerals from the midst of the Congolese jungle to the Kenyan port of Mombasa, it would be feasible to use today’s technologies to trace a shipment of tantalum wires from a smelter to the product manufacturer.

Why then do efforts of downstream companies focus on “soft” requirements, rather then the physical tracking of material which would allow ruling out that any conflict product had entered the supply chain with much more certainty?

Partly, requesting suppliers to implement due diligence measures may be easier and less costly. Also, end-user companies seem to be aware of the fact that it will not be possible to make credible claims in the near future that a specific product is “conflict-free”. Unlike for other commodities (see the example of palm oil), end-user companies have not (yet?) publicly committed to a cut off date by which all their products will be conflict-free.

Nonetheless, companies may end up looking into the establishment of an electronic tracking mechanism, to be able to verify claims made by suppliers that their sources are conflict-free. Service providers like STR Responsible Sourcing would be able to provide spot-check verifications of those systems, using sampling methodologies and risk assessments to ensure information submitted by high-risk suppliers is accurate and complete. Electronic systems to trace raw materials have already been developed and implemented by companies such as Historic Futures. It is interesting to see though that this part of conflict mineral traceability seems to be approached on a company- rather then an industry-level.

As with other aspects of the conflict-mineral issue though, an industry-based approach to traceability of the metal products in the downstream supply chain would be better suited to avoid multiple requests for the same information at suppliers, as well as to provide the necessary leverage needed for the implementation of the system.

 

'The Case for Action' - For All of Us

The Sustainable Shipping Initiative (SSI) just released a report, “The Case for Action” examining the future of sustainability in shipping. I have written before about the shipping industry and how it has been one of the slower sectors to take up sustainability issues despite the major role the industry plays in securing the existence of global supply chains. “The Case for Action” is an insightful read and provides a thorough analysis of the key challenges and opportunities that lie ahead for the shipping industry.

The report identifies seven global trends ranging from global economy and regulatory regimes to questions surrounding energy supply and climate change. It highlights increasing calls for transparency and then identifies three key challenges for the industry.

What strikes me as a critical challenge is the industry’s ability to foresee its own future. The time and cost required to build a ship with a life expectancy of several decades means that fuel consumption issues that may arise well in the future need to be considered now.

As a major player in our supply chains (90-95% of all products are handled by the shipping industry at some point) the industry’s debate should affect us all. Luckily, it is beginning to ask the hard questions: what would happen if the industry fails to grow in the future due to a shrinking or strongly localised global economy? How will the regulatory framework look in the future if there is a move away from international institutions such as the UN’s International Maritime Organisation?

What is clear is that the industry faces real challenges stemming from changes to the global economy. At the same time, matters of sustainability – social and environmental – need to be addressed and require innovative solutions.

A basic argument by the authors is that “[s]hipping will be a priority target for cleanup in regions that have already cleaned up on land”. The movement towards transparency and voluntary initiatives on workers’ rights and environmental standards, already a feature in many parts of land-based supply chains, will soon be implemented on sea as well.

There is still a long journey ahead and the challenges are formidable. However, I believe that other actors in global supply chains – be they business partners, consumers or other stakeholders, ignore this at their own peril. Globalisation has taught us about the interconnectedness of actors and their actions. With ever-increasing transparency, the shipping industry will invariably be scrutinised more closely and linked to affiliated companies and brands.

Equally important is the industry’s ability to provide its services in securing global trade, something that is far from certain when comparing current practice with prognoses of what the near future holds. The shipping industry’s issues and concerns should therefore be taken seriously by stakeholders and made a priority issue to address amongst their business partners.

2010 US State Dept Human Rights Reports: Resource for CSR Professionals

Today marks an important day for CSR practitioners, government officials, academics and corporations. Personally, as a member of STR-RS’s Risk Services team, April 8, 2011 will drastically affect the next year of my life. Today the US Department of State releases its' 2010 Country Reports on Human Rights Practices.

According to the State Dept, these reports "cover internationally recognized individual, civil, political, and worker rights, as set forth in the Universal Declaration of Human Rights."

Although many organizations endeavor to accomplish similar tasks, this is the sole report covering over 190 countries and updated annually with significant rights-related events from the prior year. Reviewing these reports year to year can offer valuable insight into a country's progress or digression in relation to promoting respect for human rights.

STR-RS’s consulting services are heavily informed by the report, which provides an important means for advising our clients on countries, regions, industries, products, and suppliers. By combining the annually updated report with STR-RS’s extensive audit database, we are able to produce a near infinite combination of comparisons and trend analyses related to CSR performance the world over.

For example, by combining the country level information garnered from review of the Human Rights report with STR-RS’s cache of country audit grades, we have been able to produce, since 2005, the Country Risk Index. This index ranks over 190 countries according to social, economic, and political factors on both the country and factory specific level in order to advise sourcing decisions, supplier segmentation, and allocation of audit resources. We also use the Country Reports to develop our Country Risk Profiles, which draw an overall picture of the most egregious human rights violations and explain them through analysis of audit violation data.

Both as a general means for understanding human rights conditions at the country level and as a tool to stay afloat in the ever changing landscape of globalization, the reports serve as an incredible resource for the CSR industry. As you can see, we use the reports for our risk related projects and as internal training tools. We recommend applying the reports as a means for surveying supply chain programs and targeting identified issues. Used in conjunction with reports put out by NGOs and internal data, the reports can serve as a useful tool for any multi-national company.

Rwanda and Conflict Minerals : Mission Impossible?

Rwanda’s Geology and Mines Authority (OGMR) organized a conference on supply chain due diligence and mineral certification in Kigali, Rwanda. Bringing together key players working on mineral traceability and certification in the Great Lakes Region, the Conference provided a bottom-up perspective on conflict minerals in the context of Rwanda.

Here are a couple of noteworthy and encouraging developments:

-         Rwanda has passed a Ministerial legislation, making it mandatory for all minerals produced in Rwanda to be tagged.

-         Four of Rwanda’s largest mines have been certified under a pilot project of the German Department for Geosciences on Certified Trading Chains. The certification requires 100% traceability of minerals and includes a number of social and environmental standards.

-         The OGMR is hiring hundreds of new staff members to be stationed at the mines and ensure the weighting and tagging of minerals. The official goal of the Government of Rwanda is to include 80-90% of its minerals (Tantalum, Tin, Tungsten) by the end of this year in the tagging scheme.

-         Congolese miners have signed a Code of Conduct in Kinshasa, DRC, to increase transparency in the mining sector.

-         The German Department of Geosciences has developed a fingerprinting technology, making it possible to determine the origin of a mineral with almost complete certainty. Although the system is too costly and too lengthy to be applied on a general scale, it will allow for spot checks of “suspicious” minerals.

-         International donors have recognized the need for financial assistance to implement a traceability scheme in the Great Lakes Region and have promised significant support.

-         Rwanda and the DRC are jointly working on a regional solution to curve the illegal exploitation of and trade in natural resources.

 Of course one could say that all of this is “too little, too late”. For companies required to report on their use of conflict minerals, traceability needs to be guaranteed for all minerals originating in the DRC or its neighboring countries. Simply certifying some mines in one part of the region will not suffice.

For Rwanda, this means that the country will probably remain “guilty until proven otherwise”. As long as conflict minerals are smuggled from the DRC to Rwanda before being re-exported, any efforts to certify the country’s own minerals production appear to be in vain. The cloud of “conflict minerals” will continue to hang over any legitimate material produced by the roughly 35’000 small and artisanal miners of Rwanda.

Consequently, the Government of Rwanda is trying hard to build credibility for its mining industry. It has started to do so long before the adoption of the Dodd-Frank Act by the US Congress. And, although a little discouraged by what Rwanda perceives to be “unrealistic deadlines” imposed by the US legislation, the country seems to be fully committed to the task.

For additional information, visit STR's Raw Material Traceability page.