Businesses including Glencore launch joint bid to improve conditions in cobalt supply chains
A coalition of businesses including Signify, Glencore and Fairphone have launched a joint initiative to improve the economic, working and social conditions of those working in the cobalt supply chain.
Global demand for cobalt has been rising steadily in recent times and is predicted to grow more rapidly in the coming years, due to the growth of the electric vehicle (EV) market. Bloomberg has forecast that the global demand for cobalt could increase more than 47-fold by 2030, against a 2018 baseline.
But for all the good it plays in helping to electrify the transport sector, cobalt’s value chain presents a myriad of social issues. Almost two-thirds of the world’s cobalt is currently sourced from the Democratic Republic of Congo (DRC) and, as such, is classed as a conflict material. Moreover, researchers estimate that more than 13,000 children are forced to work in the cobalt sector in the DRC, and have repeatedly pointed to unsafe working conditions and illegally low rates of pay. A high-profile lawsuit at present revolves around 13 Congolese families with members who were killed or injured while mining for cobalt.
The new initiative, called the Fair Cobalt Alliance (FCA), will partner with governments and NGOs to improve the welfare of those employed in artisanal and small scale mining (ASM), which accounts for 11-20% of the cobalt exported from the DRC annually. Between 1.5 million and 2 million people are estimated to work in the DRC’s ASM sector, which has been identified as having heightened risk of modern slavery, child labour and poor working conditions.
The aim of the FCA is to build sources of responsible cobalt, from which businesses can purchase and be sure that they are not financing activities which are misaligned with their social commitments. It will begin working with the owners and operators of mines across two regions – Kasulu and Kamilombe – to ensure that best-practice processes are being followed, before rolling the initiative out to other parts of the DRC.
Founding business members of the FCA are Fairphone, Signify, Huayou Cobalt, Glencore, Sono Motors and Lifesaver Power. Support is also being offered by The Impact Facility, an organisation which is already working to connect bodies across the cobalt value chain; The Miller Centre for Social Entrepreneurship, and The Centre Arrupe pour la Recherche et la Formation.
The Impact Facility’s executive director Assheton Stewart Carter will be serving as Executive Director of the FCA. He called the decision to launch the initiative a “bold move” which he hopes will “bring about systemic change” for the cobalt sector.
“The security of cobalt supply chains is more important than ever as our need for this highly relevant mineral in the new digital economy becomes evident,” Carter said. “Where we find environmental, social or labour problems in supply chains, we should not avoid them, we should not disengage, but rather it is our duty to take action and make improvements.”
It is estimated that a DRC-wide roll-out of the FCA will take five years.
Alliances for change
The launch of the FCA comes after the World Economic Forum expanded the Global Battery Alliance at its namesake conference in Switzerland this January.
The Alliance works to shift battery value chains in line with the UN’s Sustainable Development Goals (SDG) agenda and its 10 guiding principles, which cover human rights, labour, the environment and anti-corruption. With its newest members including the likes of Volvo, Audi and BMW, it represents organisations with combined revenues of more than $1trn.