Can Blockchain Solve Child Labor in the Cobalt Industry?

January 16, 2019, 10:34 PM UTC

Six months ago, I traveled to the Democratic Republic of Congo with photographer Sebastian Meyer and revealed how thousands of young children were working 14-hour days digging cobalt—an essential mineral found in every one of our mobile phones, electric vehicles, and computers—for just a few dollars a day. The scene was heart-breaking. Children living in desperate poverty were servicing giant tech and auto industries, whose products they would surely never be able to own in their lives.

Now a few companies have seized on a possible solution: Using blockchain to track and monitor how their cobalt is mined and marketed. Ford Motor Company; the Korean battery-manufacturing giant LG Chem; China’s Huayou Cobalt; and RCS Global, a London-based organization for responsible supply chains, announced this week that they will jointly create the first blockchain distributed platform to encompass the entire production cycle for cobalt. IBM will power the technology.

The group claims that the immutable identity of the information uploaded on to the blockchain will allow it to monitor and assess every step of production, from the moment cobalt is dug out of the ground in remote southern Congo—where most of the world’s cobalt reserves lie—to the smelters and refineries in Asia, and finally the global trading market. “The risks we are looking for are operational health and safety, conflict financing, and child labor,” Nicholas Garrett, CEO of RCS Global, tells me. Under the new blockchain system, each entity will report its stage of the process. “Each player assesses for responsible practices,” he says. The idea is to scale up the blockchain, allowing more and more mining and refining companies to join the platform.

Any company failing to meet due-diligence standards will be ejected from the platform. The incentive for companies joining the blockchain is to keep extracting Congo’s huge resources, while still claiming to the world that they are following ethical business practices. “We remain committed to transparency across our global supply chain,” says Ford’s vice president for global purchasing and powertrain operations Lisa Drake; the company recently announced it is investing $11 billion on EVproduction over the next few years. Drake says the blockchain “will help meet our commitment to protecting human rights and the environment.”

But will it really do that?

As our reporting in DRC showed, cobalt mining in Congo has been riddled with human-rights violations and corruption for years, and operates in a vast Central African country beset by violent conflict.

Given that, the new blockchain project might deliver fewer results than the companies claim. It is beginning with just one pilot site, Luswishi Industrial Mine in DRC’s southern province of Lualaba, which uses machine techniques to extract cobalt. As such, the initiative does not (for now) tackle artisanal mines, which industry analysts believe account for about 20% of cobalt production, and which continue employing the child miners we met in the DRC last year, like 11-year-old Daniel and 15-year-old Lukasa.

“Traceability is not the final objective, it is just a means to an end,” says Rashad Abelson, legal advisor on mineral supply chains for the Organization for Economic Cooperation and Development in Paris, which has drafted codes of conduct for the industry. “There’s a risk that companies could treat blockchain technology as a panacea that is going to solve all the problems,” he says.

Children like Daniel and Lukasa will almost certainly continue digging for cobalt as long as they can, since the root causes of child labor remain: Deep poverty, and a lack of education and job opportunities.

Even leaving aside child labor, there are other problems too: As we saw in the villages, cobalt markets and mines we visited, there are few resources to scrutinize people’s work habits. In the Kasulo mine, which is operated by Huayou, we watched hundreds of men digging cobalt with manual tools, and with no protective gloves or hard hats. And that was the site Congo’s local provincial officials wanted us to see, as an example of good mining practices.

Abelson fears that the bare-bones conditions in Congo could also lead to bad information being uploaded on to the new blockchain platform, in areas where there is low literacy, and almost no experience of software technology; in some areas, there is not even Internet access. In addition, there will be few ways to know whether the data on the blockchain is true or false. “It is not yet totally clear how this technology would resolve the issue of validating information that is fraudulent from the outset,” he says.

The stakes for fixing the labor violations and corruption in cobalt production are high indeed. As people increasingly choose electric vehicles over fossil-fuel models, global demand for cobalt could increase 700% by 2030, according to the cobalt-trading company Darton Commodities in London.

The question now is whether the world can embrace green technology, and still adhere to ethical standards.

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