Pact is proud to be the lead on-the-ground implementer of the ITSCI system. This article was originally published in the July 2020 issue of the Tantalum-Niobium International Study Center Bulletin, and is posted here with permission.
Supply chain due diligence and mineral traceability are concepts of the utmost importance to the tantalum industry, ensuring that any conflict-related risks are managed and dealt with. The ITSCI Programme plays a critical role in this regard, working within the OECD’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (‘Guidance’) framework to assist companies with traceability, due diligence and audit requirements that arise from purchasing tantalum, tin and tungsten (3T) minerals, from the DRC, Burundi, Uganda and Rwanda. By the end of 2019 ITSCI covered over 2000 mines, giving gainful employment to around 80,000 miners, and supplying over 2000 tonnes of tin, tantalum and tungsten minerals per month; it has come a long way in the last decade.
The early years
During the mid-2000s there was growing awareness of conflict-related issues in the Democratic Republic of the Congo (DRC) through the work of the U.N. Panel of Experts and civil society. In response several upstream initiatives were started, including in the tantalum and tin industries, to establish conflict-free mineral supply chains from central Africa.
The most successful of those initiatives has been ITSCI, which can trace its origins back to 2009 when the International Tin Association established a working group, while simultaneously the T.I.C. established a policy on artisanal and small-scale mining (ASM). The following year ITA ran a small pilot in eastern DRC and in 2011 ITSCI became formalised when ITA and T.I.C. joined forces, creating a partnership which has lasted to this day.
WHERE ITSCI OPERATES IN 2020. (MAP: ITSCI)
Simultaneously, downstream, the Electronic Industry Citizenship Coalition (EICC, now the Responsible Business Alliance) and the Global e-Sustainability Initiative (GeSI) created the Conflict Free Sourcing Initiative (CFSI, since renamed the Responsible Minerals Initiative) to provide resources and tools to help businesses obtain conflict-free minerals, notably through auditing smelters and refiners. With ITSCI and CFSI/RMI in place it became possible for a factory to purchase 3T materials, confident that any conflict-related risks on the ground were being reported and managed.
In 2010 due diligence and mineral traceability were normalised by the first publication of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (‘Guidance’) and passing of the US Dodd-Frank (Section 1502), which required US companies to “disclose annually whether any of those minerals originated in the Democratic Republic of the Congo or an adjoining country”. The latter, de facto, giving the Guidance teeth.
ITSCI reaches maturity
Today central Africa provides legitimate and ethical 3T minerals from across four central African countries. Furthermore, ITSCI is the only industry initiative with standards 100% aligned with the OECD Guidance.
ITSCI’s operational territory covers an area similar in size to Germany, the US state of California or China’s Sichuan province, but with considerably more challenging logistics. And yet it works because it has the buy-in from the governments, businesses and communities who host it.
The OECD has assessed ITSCI and confirmed that it is 100% aligned with its guidance.
ITSCI works inclusively with national and local governments and has clear roles for government officials. It has agreements with the governments of Burundi, the DRC, and Rwanda, as well as with the ICGLR. Its work is always carried out in partnership with governments and in co-operation with local partners as this contributes to better long term governance, stability and more opportunities for investment and growth.
ITSCI tracks 1.3 million business transactions a year and offers 3T miners a legitimate route to market. ITSCI enables mineral exports valued at around US$380 million per year, activity which not only provides jobs for thousands of miners, but also creates significant mine tax revenue for governments. ITSCI facilitated 3T exports are some of the most important foreign exchange earnings for Burundi and Rwanda.
The communities that host mines also play an important role. Many improvements in the field are brought about through a continuous incident reporting and mitigation process managed by the field teams who play a key role in facilitating incident resolution by local stakeholders directly via local Steering Committees.
Financially, ITSCI is self-funded and not -for-profit. Levies on mineral production meet around 90% of annual expenses, with the balance largely from annual membership subscriptions.
The significant majority of annual expenses occur in-region, such as mine visits, training and incident investigations.
Running a lean and efficient program requires continuous mining to generate levy revenue, which normally is not an issue, especially in an expanding program, but then Covid-19 happened.
Covid-19 in central Africa: OECD issues call to action on 3T supply chains
There can be no doubt that 2020 will be remembered for many years as the year Covid-19 disrupted the global economy. No countries or industries have avoided the disruption caused by attempts to contain and minimise the effects of this terrible pandemic. The supply chains for minerals, especially from the relatively labour intensive 3T mines in central Africa, are no exception and face many challenges.
The OECD recognizes this and has issued a Call to Action for Responsible Mineral Supply Chains.
In it the OECD states that it is “deeply concerned that gains made over the past 10 years in supply chain due diligence could be lost” and calls for immediate and concerted action “to safeguard gains related to due diligence in supply chains in alignment with the OECD [Guidance]”. It goes on to discuss ASM 3T and gold mining, before adding that “responsible artisanal mining communities are vital – recovery will only work if we do not have to re-start [traceability programs] from zero”.
The T.I.C. shares the OECD’s concerns due to the importance of central African tantalum minerals. We are working closely with the OECD, RMI and other key stakeholders to help them to raise donor funding so that supply chain programs such as ITSCI can survive the current pandemic. While ITSCI continues to report risks in the supply chain under these circumstances, budget cuts have resulted in a decreased level of field effort – restricting the ability to work with stakeholders to resolve risks. Reduced level of effort by ITSCI teams will add to the due diligence burden on smelters. Further, unresolved issues threaten to increase reputational risks for downstream companies. Over 70 NGOs and civil society organisations have also raised the alarm.
An ITSCI-RMI campaign for financial support has been launched and both organisations are asking stakeholders and downstream industry that wish to support ITSCI’s operations during this challenging time to pledge their support.
Over the last decade, ITSCI has provided vital information and support to smelters undergoing RMI RMAP audits and played a key role in reducing risk of conflict for the tantalum industry.
The risk that ITSCI does not continue post-Covid-19 would mean potentially wiping-out years of investment and progress in the social structure in Central Africa.