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Thursday, 03 July 2014 10:54

Blood chips thing of the past

Written by Nick Farrell

Intel improves its supply chain

Intel’s long running battle to purge its supply chain of elements which come from war torn countries is over. The Santa Clara Company’s officials has announced that it had rid their supply chain of minerals from Congo sold by militias that commit gross human rights abuses.

According to the SF Gate Intel did this off its own bat and not because they had been shamed by anyone else. Of course while there might have been obvious moral decisions here, the move pre-empted government regulation and boosted corporate reputation, supply chain expertise and employee morale. It has taken a long time. Intel has been working with suppliers to identify the source of minerals and make sure the company was not unwittingly financing war crimes since 2009.

In 2008, Intel had never even heard of the term "conflict minerals" when it received a letter from several non-government organizations. The group said four minerals - gold, tin, tantalum, tungsten - the company uses to make micro processing chips might have originated in mines that funded rebel groups and militias in Congo.

The trade was similar to "blood diamonds," in which groups in Liberia and Sierra Leone financed armies through diamond sales. Such groups have been responsible for war crimes like murder, rape and forced enlistment of children as soldiers. Intel wanted to be no part of it, but when it contacted its suppliers it did not get good results so it went direct to the smelters and factories. It wanted to establish "a chain of custody" across the supply chain.

Apparently it took some effort as the smelters weren't eager to sign up just to do the right thing. Intel's strategy was to patiently address their concerns until the smelters ran out of objections. In 2010, Congress passed the landmark Dodd-Frank Act, which, among other things, required companies to disclose whether or not they were using conflict minerals. Intel was ahead because it had done all of the pre-work.

It has also not needed to pull out of Congo, which would suffer greatly if it did and would increase Intel’s costs.

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