ITSCI says Global Witness report lacks balance, evidence

27th April 2022 By: Schalk Burger - Creamer Media Senior Contributing Editor

Responsible mineral supply chains scheme ITSCI has expressed concern about a "lack of balance and evidence" in a report released this week by human rights nongovernmental organisation Global Witness.

In the report, Global Witness said it had uncovered evidence that ITSCI may enable the laundering of minerals from mines in the Democratic Republic of Congo (DRC) controlled by militia or where children work, as well as the trafficking and smuggling of minerals.

Many companies use the ITSCI scheme to responsibly source tin, tantalum and tungsten (3T metals) from the African Great Lakes region.

"We strongly believe that ITSCI plays a credible and valuable role in responsible sourcing of 3T minerals through our joint-industry due diligence programme. We welcome constructive feedback and evidence of risks as we recognise that no system can prevent all illegal or fraudulent behaviour.

"However, while we take time to review the detail, we note initial concern regarding lack of balance and evidence in the Global Witness report, and disappointment that significant and meaningful progress within the 3T mineral sector does not appear to have been fairly recognised," ITSCI responded.

According to the Global Witness report, an investigation found that, in one mining location, up to 90% of minerals introduced into the scheme in the first quarter of 2021 did not come from mines validated for meeting security and human rights standards.

"A significant portion of these minerals were linked to conflict and human rights abuses," it stated.

Global Witness said it had documented similar contamination problems at another ten locations, suggesting that ITSCI’s failures are systemic.

“The scheme many global companies rely on to stop conflict minerals from entering their supply chains is failing spectacularly, our findings suggest,” said Global Witness' Alex Kopp.

“Smelters, downstream companies and other industry programmes should not rely on ITSCI. Instead, companies need to properly check their supply chains and take action, and governments need to hold them accountable,” he added.

In addition to action from companies, the report calls for better legislation and enforcement from key jurisdictions along the supply chain.

It urges the US to overhaul and enforce its due diligence legislation, specifically Section 1502 of Dodd-Frank Act, and calls on the European Union and its member countries to close loopholes in its conflict minerals regulation, and put in place stringent corporate due diligence legislation.

ITSCI RESPONSE
ITSCI said it operates on the ground in conflict affected and high risk areas (CAHRAs) with the objective to continually identify and report risks and support their mitigation, including through extensive engagement with stakeholders.

"This is achieved transparently according to standards aligned with the Organisation for Economic Cooperation and Development's (OECD’s) internationally agreed framework for supply chain due diligence for responsible supply chains in CAHRAs.

"The type of risks considered by Global Witness are not only expected by the OECD guidance and by ITSCI, but are present in our normal day-to-day activities, and for which we have controls in place in our management systems," it pointed out.

ITSCI asserted that it does not tolerate deliberate misuse of the ITSCI system, the laundering of smuggled minerals or other illegal activity and "we refute any such allegation entirely".

"In 2021, ITSCI recorded and encouraged the resolution of 1 300 incidents on risks Global Witness appears to allege that ITSCI ignores. ITSCI provided extensive input to Global Witness in late 2021, and we are analysing the final report to ascertain if this has been reasonably reflected,.

"There have been many lessons learned during the implementation of ITSCI and improvements in our systems will continue, making best use of available resources. We believe our implementation has led to significant and tangible progress on the ground and we remain committed to our work supporting responsible sourcing for a better future," it added.