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Report raises concerns about potential complicity in corruption among companies buying cobalt from DRC

In 2019, Resource Matters published a report alleging that companies producing technology that requires cobalt (such as cell phones, cars, or others with rechargeable batteries) are unable to avoid the potential corruption in the DRC. The report links Glencore, the world's largest provider of cobalt, to risky payments to companies sanctioned for corruption and recommends stronger due diligence and audits of Glencore's purchasing and payments.

Business & Human Rights Resource Centre invited Glencore and four companies evaluated as the worst performers to respond. Glencore and NEVS responded. CATL, Ecopro and GEMs did not respond.

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Article
28 October 2019

Resource Matters report: "See No Evil, Speak No Evil"

Author: Resource Matters & Science Po

Producers of electric vehicles and electronics face a daunting challenge: how does one ethically source cobalt, a key mineral for rechargeable batteries, when the world’s largest producer of this material, Swiss multinational Glencore, makes extremely risky payments to a company sanctioned for corruption?... [T]he companies Glencore sells copper and cobalt to could be exposed to certain risks of complicity or concealment, depending on the jurisdictions they are based in, if they fail to manage the risk arising from these royalties payments... [C]ompanies are expected to set up a system of due diligence with regards to their suppliers, in particular under the OECD Guide on the responsible sourcing of minerals from high-risk areas like Congo... Resource Matters and Sciences Po Paris has identified 14 large companies as probable Glencore customers... [T]he companies have made significant efforts over the past three years to map their cobalt chains. However... these same companies have paid very little attention to corruption in the industrial sector... [C]obalt buyers will only truly contribute to Congo’s macro-economic development if they help ensure that the proceeds of its mining boom benefit the Congolese population rather than a few controversial individuals. To that effect, Resource Matters recommends that companies sourcing directly or indirectly cobalt from Glencore should join forces and request of the company... a number of practical safeguards to limit as much as possible the risk of corruption and embezzlement... [such as] an audit of payments Glencore has made to Gertler-affiliated entities.

Read the full post here

Company response
27 October 2019

Glencore response

Author: Glencore

During the production of this report, Resource Matters engaged with Glencore and we responded to a range of questions about our anti-corruption policies as well as our activities in the Democratic Republic of the Congo. Our responses to these questions are available on page 30 of the report...We would like to take this opportunity to emphasise that throughout the Glencore Group we seek to maintain a culture of ethical behaviour and compliance, rather than simply performing the minimum required by laws and regulations. As part of our approach we will not knowingly assist any third party in breaching the law, or participate in any criminal, fraudulent or corrupt practice in any country. To support this, we have a Group compliance programme that includes a range of policies, procedures, guidelines, training and awareness, monitoring and investigations. Our Boardlevel Ethics, Compliance and Culture Committee oversees the operation and implementation of our compliance programme...

Download the full document here

Company response
20 October 2019

NEVS response

Author: NEVS

Business & Human Rights Resource Centre invited NEVS to respond. Response provided below:

Yes, we are very well aware of the questions and concern you talk about.  In Sweden, this is a topic that is very much in focus right now. Only this year, there has been many articles and news about conflict minerals and also other raw material that raises questions and concern. We at NEVS believe that this work is very important, especially when new products (based on partly new materials) are entering the market and you don´t really know about the sources. However, when it comes to NEVS and our production of cars, we haven´t had any production at all since 2014. We look forward to starting serial production again, but as it looks right now, it might take some years. Meanwhile, we will make sure we have very clear policies for us and  our suppliers to make sure we act according to all relevant rules and guidelines.

Company non-response
18 October 2019

CATL did not respond

Author: CATL

Business & Human Rights Resource Centre invited CATL to respond. CATL did not respond

Company non-response
18 October 2019

Ecopro did not respond

Author: Ecopro

Business & Human Rights Resource Centre invited Ecopro to respond. Ecopro did not respond

Company response
18 October 2019

GEM did not respond

Author: GEM

Business & Human Rights Resource Centre invited GEM to respond. GEM did not respond