Category: Supply Chain

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Every action has an equal and opposite reaction

Note: This post was written by SEI staff, Aida Sefic Williams.

When consumers purchase electronics, they have usually been considering which new gadget to buy for a while. For example, when upgrading phones, consumers may shop at different wireless companies, comparing and contrasting the look, feel, features, and quality of what will soon be their new toy. All of us have been there! I became a Blackberry enthusiast (and that is putting it lightly) about two years ago. I was browsing for new phones that would meet my phone expectations, but that would also have that new pizazz and would almost have that “new phone smell.” After a few months of research, I headed to my wireless company and picked up my new little electronic bundle of joy! I was more excited than words can describe about my new, shiny, red, perfectly wonderful and could-do-no-wrong Blackberry. It was a simple transaction, I hand over my money and sign a renewal contract with the company, and I receive my lovely new gadget! What could be wrong about that?

To answer my own question: conflict materials! In short, conflict materials are earth elements that are necessary for many electronic applications. For example, these materials keep your electronics from overheating, help materials maintain an electronic charge, or make the “vibrate” function of your phone possible. Elizabeth Dias of Time Magazine wrote “First Blood Diamonds, Now Blood Computers?,” explaining why these materials are referred to as “conflict materials.” Unfortunately, the trade of these materials is controlled by militia in the Democratic Republic of Congo (DRC). The money used to purchase the conflict materials has been used to fuel a gruesome war within the DRC, where miners (including women and children) are forced to work long hours under horrible conditions. The miners live in fear, as armed guards watch over them. In addition, the militia is also taxing their workers an exorbitant amount, making their livelihoods continuously dependent on harsh working and living conditions. The powers in charge not only use their power to exploit the workers of DRC, but they also use extreme violence and fear tactics to intimidate workers. Most people living in militia-controlled regions live in fear of their lives, as massacres of entire families as well as brutal rapes are a common practice. Lydia Polgreen and Nicholas Kristof of the New York Times have additionally published articles “Congo’s Riches, Looted by Renegade Troops” and “Death by Gadget,” respectively, to shed light to this problem.

Similar to my previous post titled “Future of electronics after 2012,” I am not only concerned about what the problems are. Instead, I am interested in possible solutions. Jeffrey Davis of Green Lifestyle Magazine published “Conflict Materials in Electronics” where he explains the current problem with conflict materials. Furthermore, he discusses possible solutions. An obvious recommendation many have is for manufacturers to stop purchasing “conflict materials.” This action, however, could result in more violence as the militia would not have their source of income, which would only make for worse living conditions of the miners and workers. Davis offers additional ways we can help the people of the DRC.

Additionally, several organizations’ aim to aid the people of the Congo and are determined to find ways to bring attention to this cause. Two main organizations focusing on the Congo and the “Conflict Material” problem are Enough! Project and Raise Hope for the Congo. In addition, Rachel Cernansky of Planet Green published Conflict Minerals 101: Coltan, the Congo Act, and How You Can Help, offering further information about conflict materials and ways to help the current conflict in the Congo.

While most consumers are unaware of the current “conflict materials” problem, the US government seems to be paying attention. On January 5, 2010, President Obama signed Pub.L. 111-203/HR 4173, also known as Dodd-Frank Wall Street Reform and Consumer Protection Act. The act would require some electronics manufacturers to disclose where they obtained conflict materials in the DRC or an adjoining country. Companies would be required to report this to the Securities Exchange Commission (SEC) and place the information on their website. Furthermore, companies may also need to hire external auditors and provide additional information to the SEC. Baker and McKenszie has published a Client Alert titled “New Reporting and Audit Obligations for High-Tech and Other Manufacturers” on August 16, which details the act, by providing an executive summary, reporting requirements, and practical considerations.

While purchasing electronics for most people within the United States can be done inexpensively, most consumers, including myself, do not think about the negative consequences our actions have. When handing our money to electronics manufacturers and distributors in order to get the newest, coolest phone, our bank account is not the only thing that takes a hit. As a society, we need to be aware of the materials, mining and manufacturing processes that occur in order to bring us the electronics we want.

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Future of electronics after 2012

Note: This post was written by SEI staff, Aida Sefic Williams.

Whenever electronics are discussed, the conversation always involves the argument that electronics are environmentally damaging. In order to make electronics, we need materials that have to be mined out of the ground, be highly processed, and manufactured in astronomically high quantities. Electronics also require energy to function, and many electronic components are often discarded with little or no consideration about the materials, energy, and time that went into making the product.

rareearthIf all of the previous points were not enough, I unfortunately have yet another thing to add: the consumption of rare earth materials. The phrase “rare earth materials” has been used frequently when discussing many technologically advanced designs, but what exactly does this phrase mean? Rare earth materials are 17 metallic elements, all of which have similar properties, as they reside in the same families within the periodic table of elements. The elements are: lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium, and yttrium [1].

While the general consumer may not hear about many of these individual elements, one thing is certain: They are vital to our current technologically-charged world. These materials are used in fiber optics, hybrid car batteries, x-ray units, magnets used in computer hard drives, and many other applications [2]. While many of us enjoy the applications of rare earth materials (REM), we may not be able to enjoy them for much longer. Since these materials are rare, it seems that we have currently depleted 95% to 97%, depending on which article you read, of the Earth’s REMs [3]. The rapid depletion of these materials becomes alarmingly more critical, since China controls most of the materials. More significantly, some reports have stated that China has been decreasing their REM exports and will completely stop them in 2012. (If you believe that the world will end in 2012, I am sure this news rings a very loud and alarming bell.)

While one may easily dismiss articles published by The Economic Collapse as pure paranoia, it is much harder to dismiss several claims by the Government Accountability Office (GAO). In April of 2010, the GAO gave a presentation, which is publicly available, titled “Rare Earth Materials in the Defense Supply Chain“. The report explains further information and details about rare earth materials, their applications, as well as possible solutions to the REM depletion.

Slide 16 of the GAO report lists other countries with rare earth material deposits. The list of countries includes the U.S., China, Australia, Brazil, India, Malaysia, and others. Furthermore, the report mentions that work new rare earth material mines needs to be begin. IndustryWeek reports of a mine in California that was previously used to mine REMs within the United States, but the mine’s Chinese competitors successfully drove the mine out of business. Naturally, an option under consideration is the re-opening of this new mine, which would take at least 3-5 years to become fully operational. In order to create a completely new mine, significant capital investment is needed in order to get the mine 100% operational in 7-15 years, according to the GAO. In the best case scenario, that leaves the U.S. and remainder of the world without REMs 1-3 years, or in the worst case scenario, this would be 5-13 years.

Some sources, such as the Natural News, suggest that we (the global, societal “we”) should recycle rare earth materials. After all, there is a significant market for recycling common metals such as lead, copper, and aluminum. The UN Environmental Programme has stated the importance of metals recycling. In fact, the UNEP has published a report stating current metal recycling rates and also explains the need for increased recycling of specific materials of interest. A press release from May 13, 2010, offers a brief summary as well as a link to the full text of the report.

If you read this post and all of its related links, you may start believing in the Mayan prediction for the year 2012. But the goal of this blog post is not to scare or stir people into a frenzy. Instead, the goal of this post is to inform and brainstorm! Because of this, I want to involve you, the reader. I want your input and feedback. What do you think can be done? Is increased mining the answer? Do we need to find new technologies for recycling these precious materials? Can the world’s brilliant scientists create new materials which would have the desired properties of rare earth materials? What other options can you offer?

While the technical questions are important, it is vital to also ask several social questions. For example, if you do believe in being eco-conscious, how much are you willing to give up in order to save these precious metals? Will you hold on to your computer, cell phone, or other device for 2-3 instead of 1.5 years, if it will save some rare earth materials which could be used in medical equipment that can save someone’s life? What are you willing to give up? And how much of it?

There are many more questions that I could ask, but I think these brain teasers should be enough. What do you think? I would love to enter a dialogue, not of “The world is ending!” but, “This is a problem, and here is what we can do”. Please, I invite you all, scientists, engineers, designers, environmentalists, students, consumers and everyone else to humor me for a few minutes. Let me know what you think about this subject!