Intel's Conflict-free Supply Chain


Roughly six years ago, Brian Krzanich, who was then leading Intel’s manufacturing operations worldwide and is now the company’s CEO, received a letter from the Enough Project explaining the situation in Africa. Profits from the sale of minerals mined in the Democratic Republic of the Congo (DRC) were, in some cases, funding human rights atrocities and crimes in the region. In response, Intel, the world’s largest and highest-valued semiconductor chip maker, began tackling what initially looked to be a near-impossible challenge - the company set out to create a conflict-free supply chain.
Since that time, Intel, industry partners, and NGOs have taken on the complex, decentralized electronics industry supply chain to go straight to where the source of the minerals can be traced - the smelters who process and refine raw materials from around the world. Intel employees have traveled to over 90 smelters in 21 countries to help establish and implement the Conflict-Free Smelter Program (CFSP), an innovative industry audit system run by the Conflict-Free Sourcing Initiative designed to validate smelters’ sourcing practices. Carolyn Duran, Intel’s Director of
 Global Supply Chain Management, took the time to tell 
us about the company’s pioneering work.

What is something that you wish everyone knew about this issue?

Carolyn Duran: Technology is driving economic growth and improving lives around the world. Yet, some of its most basic building blocks - minerals like gold, tantalum, tin, and tungsten - are being used to fuel conflict and violence. We have the power to change that. Everyone from individual consumers to business executives managing a supply chain should know that they have a role.

Can you provide us with an example of one of the projects that you are currently working on?

CD: Our current focus remains on eliminating the routes for illicit conflict minerals in the DRC and adjoining countries, and we believe that our best means of doing that is to get more smelters and refiners validated by an independent third-party audit program. We continue to work with smelters
 and refiners that have not received
 a “conflict-free” designation and encourage their participation in such programs.

What is the largest challenge that you face in working to source conflict-free minerals? How are you addressing it?

CD: The largest initial challenge was really to just get our arms around the problem and what we were going to try to do. These minerals come from mines all over the world. Once a mineral is processed into a metal, it’s impossible to know which mine or country that metal originated from. Given that, we figured out that we needed to work with the smelters and refiners to determine where they sourced their raw materials. These smelters were not accustomed to the audits and processes that we were setting up. It was an exercise 
in education, negotiation, and the 
will to get started. Now, however, 
the people running the smelters see 
the benefit of being able to claim that they are conflict-free. We were able 
to focus in on our core product, the microprocessor, and start our work there. Now, our biggest challenge is with the broader supply chain - building on what we have learned from our initial work and extending that to all of our products.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Why does Intel continue to source from the DRC rather than choosing to simply source from another country?

 

 

 

CD: The simple solution would be
 to source minerals from somewhere else, somewhere safer. However, a DRC-free policy could inadvertently hurt the economic opportunities for artisanal and other legitimate miners operating in that region. Intel has taken the direction that we want to continue to support sourcing minerals from the region, as long as it is possible to demonstrate the chain of custody necessary to conclude that the minerals are not funding conflict.

This is a huge, complicated problem involving numerous stakeholders. What advice do you have for other companies that are concerned about conflict minerals?

CD: There is no doubt that this is a complex problem. We had no idea what we were going to find when we began, but now - working with industry, government, and NGO partners - we have a clear path forward. And we want to help other companies get involved, particularly others in the electronics, jewelry, aerospace, and automotive industries. Large users of these minerals will make a deeper, faster impact. My advice is to get involved with the Conflict-Free Sourcing Initiative. A path has been charted for you.

What advice do you have for consumers who are worried about this issue?

CD: Consumers should know that they have power in their purchasing. Consumer concern about where the products they use come from and the impact they have is increasingly more evident. The Enough Project publishes reports on progress of various electronics companies toward conflict-free goals. We have begun branding Intel products that are conflict-free, which can be found on our conflict-free website.

Additionally, although we talk a lot about the role of industry and consumers, the role of government cannot be understated. The US State Department, the United Nations, and the African Union need to work together to facilitate peace in the region. We believe that technology should be a force for good, from the ground up. If governments and manufacturers tackle this issue together, we can eliminate the market for conflict minerals and support the peace process in Congo.

Can you speak to some of the progress that you have already made and the goals that Intel has for the future?

CD: Let me start by saying that we are proud of our progress, but know that more needs to be done. In 2012, our first major step in this long process was to validate our microprocessors as conflict-free for tantalum. Last year, we reached another milestone in this long journey - Intel is manufacturing and shipping conflict-free microprocessors. Right now, we are working to achieve a goal to make all our products conflict-free in 2016.

What is giving you hope that progress can be made?

CD: There is cause for hope. Private sector companies, NGOs, and African and other partner governments, including the European Union and the United States, are coming together to help forge a responsible conflict-free minerals trade in the region. Momentum is building. The Conflict-Free Sourcing Initiative now includes more than 200 companies from seven industries.


Photos: Intel

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This article appeared in Issue 4 | Fall 2015

To read more inspiring articles from Issue 4, including our cover story featuring Josh Tetrick, CEO of Hampton Creek, as well as exciting features, inspiring interviews, and profiles including: 17 Rising Social Entrepreneurs; Paul Saginaw of Zingerman's Deli; Kip Tindell, Chairman & CEO of the Container Store; green architect Jason McLennan; John Shegerian of Electronic Recyclers International; Tony Schwartz of the Energy Project; and Robert Egger, Founder of LA Kitchen - purchase a copy of Issue 4 online!

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