Apple and Conflict Minerals: Ethical Sourcing for Sustainability
| Case Code: OPER116 Case Length: 17 Pages Period: 2010 - 2015 Pub Date: 2015 Teaching Note: Available |
Price: Rs.400 Organization: Apple, Inc. Industry: Consumer Electronics Countries: Africa; Asia; Global Themes: Ethical Supply Chain Management Supply Chain Management, Sustainability |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The Controversy Regarding Conflict Minerals
Conflict minerals referred to natural resources that were mined in places impacted by conflicts and sold for funding armed groups. The referred conflict minerals most commonly referred to were coltan (tantalum), cassiterite (tin), wolframite (tungsten) , and gold. These minerals were used in making parts used in cell phones, tablets, laptops, aircraft, and medical equipment.
In Congo, the Tutsi tribe led M23 rebels were fighting the government forces for the control of resource-rich eastern Congo and they used the revenues from the sales of conflict minerals to fund their operations. Government troops and armed groups in conflict prone areas fought with each other for control of the mines and smuggling routes....
Apple and Conflict Minerals
Being one of the major consumers of conflict minerals, the electronics industry was facing increased criticism from human rights organizations regarding their use in its products. The stupendous sales growth experienced by Apple’s products since the launch of the iPhone in 2007 made it rely on manufacturers in Asia like Foxconn Technology Group (Foxconn) for manufacturing its products...
Continuing the Efforts
In the year 2014, Apple continued with its efforts to make its products free of conflict minerals. The Apple Supplier Code of Conduct for 2014 released on January 1, 2014, mandated that all its suppliers exercise due diligence in sourcing minerals in accordance with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas . According to the Supplier Code of Conduct, Apple put the onus on the suppliers to check whether the minerals sourced from Congo and its adjoining countries had directly or indirectly financed armed groups that abused human rights. In the eighth annual Supplier Responsibility Report released in February 2014, Apple claimed that its entire supply of tantalum, which was extensively used in the production of capacitors used in its products, had been verified as conflict free...
Challenges Outside Africa
Apple did not limit its ethical sourcing of minerals to Africa. A significant part of some of the key minerals like tin that were used in its products was sourced from places outside Africa like the Bangka and Belitung Islands in Indonesia. Any company that needed tin in its products had to invariably source it from Indonesia as Indonesia was the second largest producer of tin in the world. Nearly 90 percent of Indonesia’s tin was produced in the Bangka and Belitung Islands....
Looking Ahead
Apple had already spent considerable time and millions of dollars investigating its supply chains to figure out which components might contain gold, tin, tungsten, and tantalum from operations blamed for funding armed militia groups. In the long run, Apple aimed to get all the smelters in the world from which it procured its minerals certified as conflict free...
Exhibits
Exhibit I : Supply Chain Model of Apple
Exhibit II : Selected Financials of Apple
Exhibit III : Product Wise Sales of Apple
Exhibit IV : Excerpts from Apple’s Supplier Code of Conduct
Exhibit V : Protests Outside Apple’s Store in 2010
Exhibit VI : 2012 Conflict Minerals Company Rankings
Exhibit VII : Total CFSP Certified Smelters Sourced by Apple
Exhibit VIII : Key Partners and Stakeholders of Apple
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