Stop conflict minerals – but don’t halt economic growth in southern Africa.

By Deborah Albers

Over the past decade the world has been exposed first to conflict diamonds and now conflict minerals. Conflict minerals are mined in the Democratic Republic of Congo (DRC) and neighboring countries where human rights violations are commonplace, environmental damage is rampant and profits from the mining industry help fund the political organizations and groups with interests in the mines.

The DRC conflict, which has been going on since 1998 and involved seven countries, has been called the world’s deadliest conflict since World War II. It is estimated that approximately 5.4 million people have died since the onset of fighting. In addition, the egregious human rights violations that take place daily are cause for deep concern and the complexity of this situation requires collaborative action; this is too problematic for one company, industry or government to solve. Governments, the international community, multi-national corporations across many industries and the nongovernmental (NGO) community will have to work together to address these issues. Governments are rightly concerned with the welfare of their citizens, NGOs document damage done to people and the environment as a result of war, and most corporations want to know with confidence they are sourcing responsibly.   

In July 2010, the U.S. Congress signed the Frank-Dodd Financial Reform Act into law.  A small part of the bill addresses conflict minerals sourced from the DRC and adjoining countries. Under this new law, a company whose products contain conflict minerals must disclose annually to the Securities and Exchange Commission (SEC) whether its conflict minerals originated in the DRC or adjoining countries. If the minerals did originate from the DRC, or if the origin is unknown, the company must file a Conflict Minerals Report and submit it to the SEC.

The U.S. and other governments, the NGO community and citizens of DRC recognize the need for economic development in DRC, but the unintended consequence is that corporations are being given little choice but to source outside the region until a credible in-region sourcing scheme can be implemented.   

Groups including the Electronics Industry Citizenship Coalition (EICC) and Global e-Sustainability Initiative (GeSI) have been working to implement a Conflict-Free Smelter program. The EICC/GeSI joint working group has found that smelters are the pinch point in the process, the point in which all materials must pass to get from mine to final product. If a verification process could be implemented at the smelter, all companies downstream in the supply chain could say with confidence they are conflict-free. A validation process, similar to the Kimberley process for diamonds, would allow companies to source responsibly from the mineral rich region of the DRC and be comfortable they were not inadvertently supporting human rights violations or funding armed conflict.

Developing a Conflict-Free Smelter will take the effort of a global community, funding from multiple sources and time to create a reliable process. We challenge you to get involved. Educate yourself on the conflict, connect with a multi-stakeholder group and become part of the solution to end conflict mining.

About Deborah Albers

Deborah Albers is Dell’s Principal Social Strategist. In this role, she is responsible for defining and integrating a scalable Social Responsibility Program globally.

Deborah’s role includes oversight of Conflict Minerals, Child Labor Avoidance, Human Rights, responsible sourcing and stakeholder engagement. Mrs. Albers is also the chair of Dell’s Sustainability Compliance Council; Director of Special Projects on the EICC Board of Directors; and is responsible for reporting on Dell’s progress and challenges on social issues in the annual Sustainability Report and through Dell’s social media channels. Deborah launched the Green Team at the corporate offices in Round Rock Texas and continues to be the Executive Sponsor.

Prior to joining Dell in 1999, Deborah was the Operations Manager at RSVP, a startup company in Silicon Valley.

Deborah has undergraduate and Doctorate degrees in Naturopathy from Clayton College of Natural Health.

Follow Deborah on Twitter: @DebAtDell

Talkback Readers: What efforts can we as business leaders, consumers and members of the global community do to help stop conflict mining while promoting economic development of the DRC? Share your thoughts on Talkback!

Market rewards Hershey’s bad behavior.

By Joe Siblia

The Hershey Company, makers of the popular Hershey’s Kisses, ignored efforts of green activists from Green America and its allies in the “Raise the Bar, Hershey!” campaign. Global Exchange, International Labor Rights Forum and Oasis USA are urging a boycott and letter writing campaign to “raise awareness of the abysmal labor practices that Hershey relies on.”

During the campaign, we examined the stock price, distributed the news globally to all major news outlets and made an outreach for comment from Hershey.

We were amazed by the results. Unbelievably, Hershey’s stock price actually increased – from $47.14 on February 1 to $49.77 at the end of Valentine’s Day, February 14. Obviously there are more considerations related to the stock price increase than ignoring this campaign; but it’s very clear the financial community did not give any dignity to the green activists. It seems Hershey’s ‘abysmal labor practices’ reduced costs and increased profit – and the financial community continues to reward costs reductions, regardless of the human rights impact.

An executive close to the situation, who commented anonymously because of his relationship with the company, responded by saying, “Hershey put their head in the sand.  They’re not making a comment.” Hershey thought it better to ignore the campaign.

At the same time Hershey benefited from low labor costs, the largest supply of sustainably farmed, Rainforest Alliance certified cocoa and Bloomer Project Cocoa beans arrived on the shores of the United States, courtesy of Bloomer Chocolate, a privately owned company. 

In May of this past year, Bloomer Chocolate, Petra Foods Ltd. and the Cemoi Group created a joint venture whose mission is “to improve the supply of high quality fermented cocoa beans from the Ivory Coast while at the same time improving the livelihoods of the local cocoa farming community.”

We’ll be watching the ongoing relationship between Hershey, Bloomer Chocolate and labor. It would be an interesting joint venture if Hershey and Bloomer got together and converted all chocolate to sustainably farmed, certified cocoa. Then justice would prevail.

About Joe Sibilia

As a visionary of the socially responsible business movement, Joe Sibilia is founder and CEO of Meadowbrook Lane Capital (MBLC), described by the Wall Street Journal as a “socially responsible investment bank” specializing in turning values into valuation.

He is also the CEO of CSRwire, the social responsibility newswire service that distributes and archives corporate social responsibility/sustainability news to journalists, analysts, investors, activists, academics, public relations and investor relations professionals worldwide. His long-range plan for CSRwire is to establish a “platform for innovative revenue sharing applications advancing the ‘movement’ towards a more economically just and environmentally sustainable society and away from single bottom line capitalism.”

Joe also founded the Gasoline Alley Foundation, a 501(c) 3 corporation that has incubated 43 small businesses since 1985 and teaches inner city and/or underprivileged persons to be successful entrepreneurs using socially responsible/sustainable business practices while revitalizing inner city neighborhoods.

Through MLBC, Joe has worked with a number of Socially Responsible Companies and has been widely recognized for his work in attempting to take Ben & Jerry’s Homemade Ice Cream private, while creating a private stock exchange for CSR companies. MBLC successfully preserved many of the founders’ social initiatives, and advancing the connection between good corporate citizenship and increased share value.

Joe and David Mager recently co-authored Street Smart Sustainability: The Entrepreneur’s Guide to Profitably Greening Your Organization’s DNA as part of the Social Venture Network Series published by Berrett-Koehler.

Talkback Readers: Is the rise in Hershey’s stock value evidence of a market failure? Share your thoughts on Talkback!

Originally posted on the CSRwire website.

By CSRwire Talkback Managing Editor Francesca Rheannon

Companies serious about CSR should be supporting strong labor movements, both at home and abroad.

Since I’ve been writing about CSR and sustainability, I’ve noticed one curious fact. While many companies tout support for labor rights further down the supply chain in poor countries (often after feeling the heat from NGOs and shareholder activists), the silence is deafening when it comes to supporting unions and the right to organize at home. And labor unions are under pressure everywhere, no more so than in the U.S.

Yet their progressive legacy is still in evidence (although under threat of erosion from conservative governments), especially in the EU. Hard won gains include pensions, vacation time, living wages and workplace health and safety rules that are grounded in the precautionary principle.

These gains have not only benefited union members. Many of them have been enshrined in the labor laws of the EU — the precautionary principle, for example, has made products safer for consumers and the environment. With its widening circle of member states, the EU has lifted living standards across the continent. Despite higher unemployment and deficits than in the U.S. and the U.K., poverty rates are lower on the continent, thanks to the more robust safety net that historically strong unions were instrumental in bringing about.

But these gains threaten to go the way of the dodo, especially if they follow the example of the U.K., with its slash-and-burn austerity programs. And austerity in the U.S. may not be a formally announced policy, but with the decision by the Obama administration to cut state funding, state governments like New York and California promising to slash spending and massive unemployment keeping tax revenues down, austerity already rules.

But the benefits of labor’s power go beyond workers or the unemployed. Like the bumper sticker says, “The Labor Movement: the folks who brought you the weekend.” The weekend and another labor movement innovation, the eight-hour day, allowed workers leisure time. That boosted the bottom lines of whole new industries, like the auto industry, travel and tourism, and mass entertainment, to name a few. And with higher incomes and benefits brought about by the labor movement, workers-as-consumers were able to drive the engine of prosperity in advanced industrial nations.

In the U.S. history-changing environmental laws, like those establishing the Environmental Protection Agency and Clean Air Act, would never have come to pass if the labor unions had not put their muscle behind them. The visionary labor leader (and my mentor back in the day) Tony Mazzochi of the O.C.A.W. was the moving force behind a coalition of labor and environmental groups that encouraged a Republican president (no friend of labor) to sign both the Environmental Protection Act and Occupational Safety and Health Act into law.

That made it a lot easier for companies that want to be good environmental actors to operate on a more level playing field. (In the U.S., that will be undermined if President Obama makes good on the promise he made during the State of the Union address to take an axe to regulations. He ridiculed the regulation of saccharine as “toxic waste” in waterways, saying if it’s safe enough to put in your coffee, it’s safe enough for waterways. But when tons and tons of saccharine are dumped into our rivers and lakes, you can bet it will be toxic waste.) It also created consumer (and industry) demand for environmentally friendly products — the very products companies with a strong CSR and sustainability profile are selling.

Those companies command a price premium for green goods; they need consumers to have good middle class incomes to increase market share over less-green products. But without a strong labor movement, those good middle class incomes are going, going, gone. Real wages are stagnant or falling, poverty rates are rising and income inequality has attained heights not seen since the Gilded Age. Moreover, companies that want to pay their workers a living wage are competing with bad corporate actors, like Evergreen Solar, in a race to the bottom.

The CSR community depends on transparency and accountability to keep its credibility. Unions that are energized, instead of demoralized and cowed, can help keep companies honest — another area where what’s good for labor is good for CSR. But if unions are always fighting to hold onto past gains that are fast slipping through their fingers, they end up making deals that enable companies to ride roughshod over CSR principles.

Take two-tiered wage structures. They trade away the wages and benefits of young workers to keep those of older workers. It’s a devil’s bargain that will have terrible consequences for society, condemning more families to poverty, raising pressure on taxpayers to pick up the tab for increased medical costs and crime, and eroding social stability.

That brings me to my last point. A strong labor movement creates a strong middle class and flattens out the extremes of wealth. As the British authors of the book The Spirit Level point out, countries that have greater income equality are happier and more stable. The corollary to this, of course, is that societies with higher extremes between rich and poor are more unstable, or more likely to become so. We see the result being played out these days on our TV screens — Egypt is highly income unequal. (The U.S. is even more so.) And instability isn’t good for business. Stock markets have fallen as investors nervously watch events in Egypt unfold.

The rise of inequality, the spread of deregulation and the growth of predatory capitalism have all paralleled the decimation of labor unions. Government is supposed to serve the interests of society as a whole — to protect those who have no other recourse to power. Robust unions are the only counterweight power to predatory corporations, whose political power is becoming ever more complete. When unions are extinct, good corporate actors will be left swimming against the tide in a sea full of sharks.

About Francesca Rheannon

CSRwire Talkback’s Managing Editor is Francesca Rheannon. An award-winning journalist, Francesca is co-founder of Sea Change Media. She produces the Sea Change Radio’s series, Back to The Future, and co-produces the Interfaith Center of Corporate Responsibility’s podcast, The Arc of Change. Francesca’s work has appeared at SocialFunds.com, The CRO and E Magazine, and she is a contributing writer for CSRwire. Francesca hosts the nationally syndicated radio show, Writers Voice with Francesca Rheannon.

Talkback Readers: What are your views on unions? Are they good, bad? Tell us on Talkback!