Private sector governance of sustainable global supply-chains is examined. We have evaluated the effectiveness of strategies, mechanisms and organizational settings that US industry uses to implement the conflict mineral reporting requirements of the 2010 Dodd-Frank Act, of which Section 1502 requires corporations listed on US stock exchanges to report on the sources of “conflict minerals”—tin, tantalum, tungsten and gold (3TG) metals—in their manufactured products. The overarching policy aim is to mitigate serious social conflicts in the Democratic Republic of the Congo (DRC), where mining and mineral trade of 3TG metals has contributed to armed conflict, forced labor, sexual violence, and other human rights abuses.
The electronics industry has been particularly responsive and proactive to the conflict minerals problem. That sector has spearheaded the Conflict Free Sourcing Initiative, now with over 350 corporate members, that runs a comprehensive standards and auditing program that engages over 200 smelters and refiners in more than 20 countries around the world. The program maintains a list of facilities that have implemented responsibility management systems (including a policy, procedures for purchasing primary mined minerals and recycled metal forms, due diligence practices and documentation) and have passed third-party compliance audits. More recently, a program that addresses downstream companies has been developed. Consequently, minerals, metals, chemicals, components and products with the 3TG metals supply-chain are covered by one or more governance mechanisms.
Objective: Our research program aims to estimate the scope of mineral and metal flows, and the effectiveness of management efforts of global commodity supply-chains. The current project considers drivers and mechanism of firms participating in voluntary responsible sourcing initiatives. Companies in three life-cycle stages are considered: upstream firms include mines and mineral processors, regional transporters and traders of minerals; midstream firms include smelters, refiners, global shippers and traders; and downstream firms include metal and chemical producers, component and final product manufacturers, including brand-name OEM companies.
Our theoretical framework aims to understand firm behavior based on institutional theory, stakeholder theory and resource-based view. We draw on management scholarship literature in sustainable supply-chain management and corporate social performance.
Methods: Multiple methods were employed. A midstream company database was created that describes 215 firms that process 3TG metals, providing data on company location, ownership, management system experience and firm size. To this, survey data are available on 69 smelters and refiners in 17 countries describing their participation and program implementation. Statistical analysis provided correlations between independent and dependent variables.
Results and discussion: US national government policy is driving corporate behavior throughout global market and conflict-mineral supply-chains. Large firms commit to responsible management quickly, but all firms implement responsibility management systems. Surprisingly, firm ownership does not correlate to social responsibility management. Market forces reach suppliers and traders all over the world, penetrating deeply into the metal supply networks to remote regions like provincial China, Bolivia and small islands in Indonesia. In the next phase of work, ways and means that downstream firms have engaged with midstream firms to encourage responsibility management and program participation will be investigated.
• Sustainable business models , • Management and technology for sustainable and resilient energy, water, food, materials, , • Public policy and governance
