Has Intel side-stepped NGOs on conflict minerals in its chips?
Yes, and here's why it makes perfect ethical and business sense
Analysis Intel has just announced that it is the proud producer of the world's first conflict-free processors.
What they actually mean is that they are making their processors without the use of “conflict minerals”, which is a handy term for materials that come from the dodgy bastards who enslave people in Eastern Congo. This is a jolly good thing. That our electronics are made by the labour of people who voluntarily go off to work, whistling cheerily as they approach the mine, is vastly better than their coming from those beaten or otherwise forced into doing so.
What is interesting, to me at least, is that Intel has gone about certifying this in exactly the way that I said, here at El Reg, that people should, rather than in the near insane manner that various NGOs and US law state that they should.
To give you the brief recap: various of the ores for tungsten, tantalum, tin and gold, are so rich and abundant, so close to the surface, in the Eastern Congo that it is possible to mine them with a shovel and bucket. It's so easy, in fact, that it is possible to enslave women and children to do that mining for you. Given the preponderance of vile and predatory bandits in the area, this is something that has in fact been happening. We would all rather prefer that it didn't and so various people have been proposing various different schemes about how it might be possible to stop this.
The difficulty is that there are also entirely respectable artisanal (ie, bucket and shovel in the jargon) mines in the region that are not controlled by said bandits. So, we'd like a system that allowed the non-bandit material out and not the bandit-derived stuff.
Two basic proposals were made. One, from NGOs like the Enough Project and Global Witness, was that all companies that could potentially use such conflict minerals, or metals derived from them, should check all the way through their supply chains, right down to the very bottom through every layer of the global market, and then declare whether they were using conflict minerals or not. This is what made it into law (PDF) as a part of Dodd Frank.
The SEC, the bureaucracy charged with drawing up the detailed rules, has pointed out this will cost some $3bn to $4bn in its first year. As opposed to the $10m the Enough Project told us it would cost when they started their “Blood in the Mobile” campaign.
The reason the target was initially electronics was just because it made good politics. Sure, mobile phones use tantalum in capacitors, tin in solder, gold on connectors and tungsten for the little vibrating bit. But all four metals are used in many other products as well from jewellery-makers through to steel for ship propellers and optical lenses and films. It just strikes a chord to concentrate on something that many have in their hot little hands half the day.
For some years now, I've been pointing out that this Dodd-Frank method (here's the text of the Act - PDF) isn't actually the way to do it. Instead, concentrate upon the metals industry itself. There's no more than a dozen factories that can process tantalum, perhaps a score for tungsten and a half century at the outside for tin. Gold is, sadly, another matter.
But we can control the ores that go into those smelters and processors with the aid of this project from the German government (disclosure, I know and have worked with these people in my day job. Good guys.)
We have a database of the trace minerals in all of the different ores mined around the world. We're going to test the ores as they come into the processor (you just do, to make sure you're going to process it the right way and to get the price right) and so all we do is check off the ore against the database.
It's a simple and easy way of doing things. And that's the way that the electronics industry itself has approached the problem, through the EICC and GeSI CFS programme (PDF).
Concentrate upon the smelters, the natural chokepoint in the system, and we can forget about having to spend $4bn on everyone chasing their own arses for paperwork. As, for some years now, I have been suggesting.
So, now we have one of the giants of the industry, Intel, announcing that it is indeed producing entirely-free-of-conflict minerals. Which is great, isn't it? This must obviously be as a result of that huge great law that has been passed forcing them to do so. After all, we cannot trust a profit-hungry company to simply respond to consumer desires: we all know that, government must be used to force them.
We define “conflict-free” products as those manufactured with metals from smelters that have been validated by the EICC and GeSI CFS program, or other country of origin determination and due diligence, to be “DRC conflict free,” as that term is used in law.
They've actually done it the sensible way, looking at those natural chokepoints, the smelters, instead of chasing every single one of their suppliers, their suppliers' suppliers and so on through the global production chain.
Score one therefore for profit-hungry companies responding to consumer desires.
Which leaves us with the only important question left. If the industry solution does indeed work, then why do we still have this $4bn law? Well, OK, we know the answer to that. No politician (nor NGO) is ever going to admit to error now, are they? Even if we do indeed have a solution costing perhaps a few tens of millions they'll still be insisting that we must spend the billions: just because they say so.
Oh, and just to make things even better, the same NGOs are currently campaigning to have every company in the EU (yes, every, not just the big ones) follow those same vastly expensive Dodd Frank rules. Instead of, you know, looking at the industry initiative and concluding that the problem is largely solved already. ®
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