Hun­dreds of com­pa­nies caught in UWSA tin mine sup­ply chain

The Myanmar Times - - Business - NICK BAKER n.baker@mm­times.com

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”.

Photo: Staff

Nokia and Huawei are among the firms with in­di­rect con­nec­tions to smelters named in the Reuters re­port.

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