Hundreds of companies caught in UWSA tin mine supply chain
HUNDREDS of companies from around the world may be using tin sourced from a mine under control of the United Wa State Army (UWSA), according to a Reuters report released yesterday.
Several of the firms named in the report told The Myanmar Times they were responding to the findings.
The Reuters investigation claims that several Chinese-controlled firms which source tin indirectly from the Man Maw mine in northeast Myanmar are also listed suppliers for a range of international companies including Apple, Starbucks, Huawei, General Electric and Nokia.
As a result, these companies may face the possibility of violating sanctions that the United States placed on the UWSA for suspected narcotics trafficking in 2003, the report said. Several sanctions experts told Reuters the US government was “unlikely to fine companies who unwittingly used the Myanmar tin”, although it could push them to switch suppliers.
“The situation illustrates the difficulties facing multinationals in monitoring supply chains that have grown increasingly complex,” the Reuters report said.
The Myanmar Times contacted several of the international firms cited in the report. A spokesperson for General Electric said that the company would address the issues and that it “routinely examine[s] the smelters in our global supply chain either through direct audits or those performed by groups such as the [industry group] Conflict Free Sourcing Initiative [CFSI]”.
Maggie Qi from the Huawei media affairs team said that Yunnan Tin, which Reuters reported has sourced tin from the UWSA-operated mine, was a “very small supplier to one of [Huawei’s] contractors”.
Although Huawei has no direct contract with Yunnan Tin, Ms Qi said her company had the Yunnan firm’s response to the issues raised. Huawei will consider its next step once it receives an answer, she added.
“[Huawei] expects all suppliers and their contractors to comply with all local laws and ethics,” said Ms Qi. “We will take all necessary actions when these standards are unmet.”
International communications lead at Nokia Spencer Swartz said that although his firm does use Chinese smelting firms mentioned in the Reuters report, they are “are not direct suppliers of ours”.
“Tin smelters and refineries only provide a small share of their products to the information and communications technology industry and thus are several tiers away from Nokia,” said Mr Swartz.
Nokia recognises the risk that the illegal extraction and trading of conflict minerals may cause human rights violations and environmental degradation, he added. But the firm focuses its due diligence efforts on its tier-1 suppliers, “where we can make the largest impact”, Mr Swartz said.
Due to the company’s “relative lack of exposure” to tin, it relies on industry programs like CFSI, he added. Yunnan Tin is among those firms validated conflict-free by CFSI’s Conflict-Free Smelter Program audits, Mr Swartz said.
“We have not seen enough evidence that Yunnan Tin would source tin from UWSA-controlled mines,” he said, but added that if further evidence is presented “we will gladly receive it, run further due diligence and then notify our suppliers and escalate the issue as needed”.
For some industry experts in Myanmar, the Reuters report is hardly surprising.
“Ever since the news started emerging a few years ago of significant tin exports from Myanmar to China, [we] have been alerting commodity traders and relevant companies with whom we are in contact who have tin in their supply chain that this is a human rights risk which they should address in due diligence,” said director of the Myanmar Centre for Responsible Business Vicky Bowman.
Ms Bowman said the “involvement of the UWSA as a sanctioned Myanmar organisation should also be on the radar screen for US companies” although if the tin is considered legally imported into China by third parties this is “likely to be very challenging”.
She said a new EU conflict minerals regulation, yet to be adopted, would “shake up certification and sourcing programmes” around “conflict tin” and could affect Myanmar.
“Most of the areas of Myanmar from which tin is extracted – not only Wa areas – should definitely be considered conflict and high-risk areas”.
Nokia and Huawei are among the firms with indirect connections to smelters named in the Reuters report.