Blog / 23 April 2019

We need a global standard on corporate abuse in supply chains - this week's OECD forum in Paris could be the start

It’s high time companies took responsibility for their human rights and environmental impacts, writes Sophie Pickles. The OECD forum on responsible mineral supply chains could be an important moment to change things, if we seize it.

Today in Paris, Global Witness CEO Gillian Caldwell will address over 1,000 miners, commodity traders, investors, manufacturers, governments, and civil society organisations, at probably the world’s largest forum on changing how metals and precious stones are sourced.

The OECD forum on responsible mineral supply chains might sound like a dry crowd. But these are the people, companies, and legislators involved in producing, trading and regulating the resources that underpin our economies and lives - from the cars we drive and homes we live in to the food we eat.

These resources are traded and speculated about on exchanges worldwide, while mining, logging and agribusiness receive billions annually in global investment.As

At Global Witness, we think this global trade in natural resources should be conducted in ways that respect people and our planet.

But decades of investigations by my organisation have shown that companies consistently place profit above both. While shareholders are often protected by the law, human rights and the environment are not.

How supply chains fuel abuses

Our research has revealed how globalised resource production and trading is consistently linked to corrupt, abusive, and environmentally destructive activities.

We have exposed how copper and cobalt in the Democratic Republic of Congo (DRC) was procured through commodity trading giant Glencore and its former partner Dan Gertler. Gertler has since been sanctioned by the US over corruption, and his deals are said to have deprived the Congolese people of $1.4billion in revenue.

Yet the cobalt and copper from these mines is traded on international markets. (Glencore is Swiss-registered and listed on the London stock exchange).

We have documented how, in 2017, 201 environmental defenders across the world lost their lives while standing up to local opponents and companies - including in big mining and agriculture - and attempting to protect their forests and land. International companies and investors are connected to these deaths through their supply chains and investments.

We have shown how western consumers were sold talc from mines in Afghanistan thatfinanced Islamic State, how gold traded in Dubai was swapped for guns along supply chains in the DRC, and how timber that funded the Central African Republic’s bloody civil war entered European ports.

It’s clear that our current economic model allows for violence, human suffering and environmental degradation in one part of the world as the price for prosperity (and to meet market demand) in another. This needs to change.

A global standard for corporate accountability

The OECD forum on responsible mineral supply chains could be an important moment to change things, if we seize it. The forum has been incubator for the world’s first human rights laws for metal supply chains – in the United States, Rwanda, Democratic Republic of Congo and Europe.

These laws have broken new ground, requiring companies that use and trade four metals – tin, tantalum, tungsten and gold – to scrutinise their supply chains and report on their findings. While these laws are precedent-setting, their implementation by companies and governments is lacking.

We must learn from and build on these laws, even though they are limited in scope, global reach and sanctions.

We need ambitious and global corporate accountability legislation which holds all companies involved in extracting, producing and trading natural resources to the same standard. All corporations should have a legal duty to ensure their supply chains are responsible, transparent and do not contribute to social and environmental harm.

Individual company directors should be held responsible for their company’s impacts, but also for those of subsidiaries and joint ventures, including the physical supply chains of all of these operations. Anti-corruption legislation sets a precedent here.

Companies and investors must publicly report on the full range of non-financial risks in their due diligence checks – from rights abuses to corruption to climate risk, including along supply chains, and be penalised where reports are inadequate or absent.

Finally, while companies must do everything possible to mitigate and address risks, we must also ensure there is a global mechanism to provide remedy for victims when corporates do have negative impacts.

A 2017 French law, the devoir de vigilance, introduced following the 2013 Rana Plaza disaster in Bangladesh, creates liability for harms caused through a lack of care taken by companies. It provides a useful if imperfect framework to build on to ensure justice for victims of corporate crimes.

Responsible sourcing: the new normal

Today the world faces climate breakdown. Supply chains contribute to this, and exacerbate abuses, violence and corruption. As competition for natural resources intensifies (including in the new rush for ‘green tech’), the need for reformed business, including along supply chains, is urgent.

So as the most powerful people in metals, commodities and precious stones gather in Paris this week, let’s change the terms of the debate.

We simply should not do business with or invest in companies that harm people and the planet. Responsible and transparent business should be considered normal, not exceptional. It’s time to turn the tables and call out the companies still putting investors and profits first at any cost.

This blog was originally published on the Business & Human Rights Resource Centre website here.

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