Photo: Flickr Commons
Photo: Flickr Commons

China’s Responsible Cobalt Initiative (RCI) seems to be picking up steam, with German carmaker Daimler the latest high-profile manufacturer to announce plans to join the campaign led by a Chinese industry group and designed to tackle social and environmental hurdles in the global cobalt supply chain.

Where global commodities are concerned, China has typically been portrayed by commentators as an amoral customer with a seemingly bottomless appetite. With the establishment of the RCI by the aptly named China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters in 2016, Chinese industry appeared to be changing its tune. By spearheading the RCI, China seemed determined to take the lead in ensuring global corporate responsibility throughout a supply chain long criticized for countless human-rights abuses, including child labor.

The 28-member group, which counts the support of high-profile cobalt consumers such as Apple, Sony and Volvo, is headed by former Microsoft manager Christina Feng. The group claims to have already facilitated members’ progress on improving transparency, governance, risk evaluation and community development along the controversial cobalt supply chain. But as the Democratic Republic of Congo (DRC), the source of more than two-thirds of the world’s cobalt supply, sinks further into chaos, can the RCI really make a difference?

The DRC frequently features among the most conflict-ridden, dangerous countries in the world. Its autocratic president, Joseph Kabila, has yet to organize elections a year and a half after his mandate expired. Kabila’s refusal to leave office has fanned the flames of a political crisis, weakened the central government’s authority, and caused the nation to slide back into a low-intensity civil war. Large parts of the country are conflict zones home to a plethora of armed groups, while 7.7 million people are in acute food emergency. Leading opposition candidate Moïse Katumbi, an experienced former governor respected by the global mining industry who is supported by the country’s influential Catholic bloc, has been forced into exile on trumped-up charges.

The DRC’s grave troubles extend to its mining industry as well. At least one-fifth of the DRC’s cobalt is mined by hand. Such so-called “artisanal mining,” involving an estimated two million Congolese citizens, is rife with danger for those that undertake it. Miners risk everything from mercury poisoning to deadly landslides to being taken advantage of by unscrupulous bosses. To make matters worse, a significant proportion of these companies enlist the help of workers under the age of 18 – some as young as four years old – driven by poverty to unregulated underground mines. Industrial mining paints a similarly disturbing image, with researchers pointing to forced evictions, sub-par labor conditions and devastating environmental impacts as endemic to the trade.

Of particular concern is the massive Katanga copper mine, the largest source of cobalt in the world. The Katanga mine has been out of action since 2015, undergoing major refurbishment after a mine wall collapse killed seven workers. Now reopen, the mine is expected to produce 11,000 tons of battery material this year alone. These levels of production are likely to see manufacturers double down on the DRC as a source of cobalt despite the litany of ethical, political, financial and operational risks.

One of the initiative’s primary goals is to keep child labor out of the global cobalt supply chain, ensuring that the commodity is available as an “ethically” mined resource

The RCI is ostensibly an attempt to address these risks. One of the initiative’s primary goals is to keep child labor out of the global cobalt supply chain, ensuring that the commodity is available as an “ethically” mined resource. Firms like Daimler have “expressly forbidden” child labor in their supply chain for years, but have been forced to acknowledge the challenges innate in verifying cobalt sources. Enter the RCI, which seeks to coordinate the efforts of a host of manufacturers to ensure effective and reliable auditing without destroying the livelihoods of those who rely on the booming market.

Amid the hype, however, there is a layer of sand on the gears that will prevent the RCI from ever achieving its lofty goal of ethically sourcing cobalt. The Congolese mining industry is wildly corrupt and serves only to enrich Kabila and his inner circle.

In March 2018, Kabila signed into law a new mining code, slamming the 2002 version as kowtowing to investors. The new terms will raise taxes and royalties, and the code’s implementation is to be considered on a case-by-case basis. The latter element has raised concerns over transparency. Many view the new law’s conflict of interest provisions as too weak to prevent corruption in the sector from further diverting the country’s wealth into the pockets of the few. At least a fifth of all mining revenues are already unaccounted for due to corruption and mismanagement, with a substantial portion going to Kabila and his cronies.

Moïse Katumbi, the exiled opposition leader, strongly criticized both the content of the new tax law and Kabila’s passing of such significant legislation without the backing of a legitimately elected government. Katumbi, who is planning to return to the DRC in June to officially file his presidential candidacy, even though in doing so he risks being thrown in prison by Kabila’s regime, promised to create a fairer, more stable framework for the DRC’s mining industry if he were elected.

Katumbi has frequently warned, however, that the country will never be stable as long as Kabila clings to power. In this context, the RCI’s claims to clean up the Congolese supply chain are laughable at best. While a welcome example of China’s newfound desire for global stewardship, manufacturers’ time and energy would be better spent exploring alternative suppliers of cobalt, such as Australia, which has the world’s second-largest cobalt reserves. Barring that, they should follow Elon Musk’s example and take steps to walk away from cobalt altogether. As long as the Congo remains the heartland for the now internationally coveted mineral, the cobalt market will never be a clean one.

Jon Connars is an American investment risk analyst and researcher currently shuttling between Singapore and Bangkok with expertise in the ASEAN region. He has been featured in The Hill, The Diplomat and Asia Times.

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