First World Problems: Reconciling Values, Partisanship and Profit

The largest retailer of gold jewelry in the United States is Walmart. Yes, you read that correctly. Walmart undertook a corporate responsibility initiative in 2008 that was met with skepticism. They persevered.

 Love, Earth® was born from a desire to balance consumer demand with environmental concerns and ethical sourcing. The typical 18 karat wedding ring creates approximately 20 tons of waste. In the United States, the EPA and state agencies regulate emissions. Safety of the workers is a preeminent concern, and most workers are unionized unlike their counterparts in places like Congo, where mining drives the economy.

Armed with research and a desire to provide consumers with ethically sourced products, Walmart remains the leader in offering conflict-free jewelry to US consumers. The US makes up only about ten percent of the global market but, as usual, it is an American company looking to balance the scale between what is ethical and optimizing profits.

Most importantly, Walmart did it without regulators breathing down their back. Unfortunately, other companies and manufacturers are not willing to do the right thing without regulations. The issue is traceability. Not only gold in jewelry but also tin, tantalum, and tungsten. Cobalt and copper also figure prominently. These minerals are in every electronic device. They hold the charge, light the screen, and make our cell phones vibrate.

Environmental activists push for green energy and electric or hybrid vehicles. The deforestation of the rainforest in Congo is devastating. The unregulated mines there have no environmental controls. The by-products are destroying the ground water. The environmental lobby in the US can tout higher standards all they want but until they support traceability for their Blood Hybrids, their commitment is based on domestic policies designed to help only Democrats and not really about improving the environment or getting Americans off foreign sources of energy.

The electronics and manufacturing industry has powerful interests as well. They have powerful Republican ties. The US Chamber of Commerce and the National Association of Manufacturers, led by CEO Jay Timmons, a former Chief of Staff to Virginia’s George Allen, are locked in a mutually beneficial foot-dragging scheme.

Though the 1502 Provision contained in the Dodd-Frank bill, passed in 2010, was authored by Republican then-Senator Sam Brownback, it is a casualty of time. Nearly two years hence, the bill’s direction to the Securities and Exchange Commission languishes. The spectre of lawsuits and lack of will continues to prohibit progress.

The tin, tantalum, tungsten and gold mining in Congo is fueled in large part by violence. Some attribute militia violence as a root cause of the troubles in Congo. Others see it as the rampant corruption, instability, and a virtually nonexistent justice system.

What we do know is all of this is unacceptable. According to a study released by the American Journal of Public Health in May 2011, 1,152 women between the ages of 15-49 are brutually raped every day. Auto-cannibalism, child slavery and child soldiers are common.

Before the International Monetary Policy and Trade Subcommittee of the House Financial Services Committee today, a hearing featured testimony from across the spectrum. Those who wish for responsible trade practices, traceability and increased manufacturing that reflects American values. Others blame the 1502 provision for further impoverishing the very people it was set to protect.

Ultimately, American ingenuity will win out. I listened to the hearing, wishing someone from Walmart had been asked to testify. Or that Tiffany & Company, the famed jeweler which also carries conflict-free jewelry, had testified. Success stories are an important component.

Yes, American manufacturers will have to invest in compliance. They have to reinvest in their businesses anyway. Intel is looking to create a conflict-free chip, leading the way in the tech industry. All around us, there are companies doing the right thing because they can balance their priorities. The cost is about one penny, per product, to the consumer.

Exporting a culture of life is about more than faith. High profit margins are about more than just revenue. There is no guarantee change will be easy. However, American consumers should not be forced to purchase blood hybrids or conflict mineral laden electronics when we know there is a better, safer way.

Instead of looking away as China colonizes Africa and viciously exploits their resources, American companies and consumers should unite, set aside partisanship, and develop a comprehensive strategy that puts the 21st Century into the history books as one where we embodied our values, rebuilt our economy, and allied ourselves with Africans who shared our thirst for freedom and independence.

  1. Johnny Dubya

    I just want to comment on one statement you made: “The typical 18 karat wedding ring creates approximately 20 tons of waste.”

    This is the sort of fact that sounds shocking to the layperson, but it shouldn’t be.  As a geologist who once worked at a gold mine in Nevada, I can tell you that the very thing that makes gold valuable–its scarcity–necessarily means that mining it will create a great deal of “waste”. 

    The average ore grade of the mine where I worked was 0.035 troy ounces per ton of rock.  As this was a surface mine, overburden devoid of economic quantities of gold was removed and piled up in the waste dump.  Ore was treated, and the resulting tailings were piled up in the tailings dump. 

    In other words, rock was taken from one part of the mine and moved to another part of the mine.  This, to me, is not “waste” in the traditional sense.  It does not go into a landfill.  It does not endanger the environment.  You could say that it despoils a wilderness, but the area of Nevada where this mine exists is the very definition of “middle of nowhere”.

  2. Pilli

    One idea differentiates the USA from the Congo…the sanctity of personal land ownership.  When people can own their own land, they treat it better for the most part.  Until Africa gets to a place where anyone can and does own their little piece of heaven there will always be conflicts and always be exploitation.  No amount of Wal-Mart, Intel or Tiffany do-goodness will cure it.

  3. Instugator

    I am with you CoolHand; in fact I was able to maintain my suspension of disbelief all the way until I got to this part,

    Elizabeth Blackney: 

    Instead of looking away as China colonizes Africa and viciously exploits their resources…

    Seriously, did they go to Africa on the Lotus Flower? Were these Chinese fleeing some sort of persecution? Do they take over entire indigenous governments and promote their own laws instead?

    In other words, Ms Blackney, – are you using the term “colonize” solely for emotional impact or is there something there?

    How are they doing this “viciously”? – are they enslaving people and compelling them to work for free in their companies?

    Or is your rhetoric over the top because you cannot rely on the simple facts?

  4. Misthiocracy

    Question, asked out of honest curiosity:

    What are the economic barriers for Western retailers trying to secure ethical sources of raw materials from developing countries?

    In other words, when Walmart (for example) commits to using only conflict-free gold, does that mean that they are supporting ethical suppliers from developing countries or does it mean that they switch to suppliers in Western countries, like gold mines in the Western US, Canada, Australia, or even new mines in Britain and Ireland?

    Are the increased costs of supporting ethical suppliers in developing countries (training, oversight, security, transportation, government relations, etc) higher than the costs of using suppliers closer to home (unions, regulations, fights over royalties, etc)?

    If Western retailers/manufacturers end up switching away from suppliers in developing countries, does that not increase the incentive for countries to court investment from China?

    From a developing country’s point-of-view, a US company might run an operation more ethically than a Chinese company would, but from many North Americans’ point-of-view a US company that operates in a foreign country with standards that are in any way lesser than those in the US is seen as guilty. Why take the risk?

  5. Misthiocracy

    Also, as those links I posted about gold mining in England and Ireland point out, those countries have only been able to reopen their gold mining operations because of the current high price of gold and other precious metals.

    That high price is, at least partially, the result of huge demand for gold in India and China. US demand for gold (the #3 country, according to this link) has dropped by 17 per cent.

    How can US companies beat China to the resources in developing countries when China’s cash reserves are so huge? China can outbid US companies pretty consistently. If those countries’ governments put a higher value on cash than they do on ethics, do the US companies’ “ethical values” really matter?

    Sorry if I’m being overly pessimistic. I just see it as being very hard to make a difference in global economic ethics as long as China has such huge cash reserves.

    Also,  is there long-term statistical evidence that Chinese resource operations are significantly more harmful for the locals than US operations?

    Heck, could at least some Chinese operations be less harmful than some of the sketchier European operations?

    Are all Chinese operations created equal?

  6. Indaba

    Coltan mined in the Congo is taken to Rwanda and exported to China. As Coltan is very rare, there are concentrated deposits and Rwanda suddenly leapt up from zero to a big exporter.I agree with Misthiocracy that the Chinese money speaks. The leaders of the Congo do not want companies in their country who want them to educate their people. The Chinese and Indians are mining in Zambia and do not contribute a cent to any infrastructure or education. Even the swimming pools, soccer fields, theatres, etc. are derelict. Nor do the Indians and Chinese seem interested in adding wealth to the locals who work with minimal safety equipment left from AngloAmerican mining days. The Chinese bring in their own work force And keep to themselves. I was on Facebook with black Zambians during the African Soccer.The American values of corporations are known and respected in Africa. People want to work for Microsoft and IBM with the hope of immigrating. They have had an impact though because they are large enough to have market influence.The Canadians are the largest holder of mining properties in Africa but tend to be very fragmented and small companies without the clout.

  7. Indaba

    China has colonized Africa but in a very different way to the Europeans. Robert Mugabe was (and is) funded by the Chinese. His home/palace is built in the Chinese style. You can read one of Christopher Hitchens’ articles where he praised the Durban dock workers for not letting through Chinese weapons to be used by Mugabe against his own people. The Chinese pay the leaders very well, the British did not. The British built a community and a vision of the future being better for all. The Economist had an article a few tears ago that the Brits did educate the locals which was very strange as I was educated in Zambia and Zimbabwe and was at boarding school with all races sleeping in the same room and sharing class rooms and playing fields. So history gets re written by the bleeding hearts.

  8. Indaba

    CoolHand, I am so with you on the environmental waste. I worked in mines in Northern Canada. British Columbia socialist government closed most mining back 30 years. Now the Chinese are buying Canadian properties because they have the money, while Canadian mining firms have been frozen and ended up selling themselves to other countries. This environmentalist peddling is by well meaning people who have not lived with mining cycles or in a mining community. Gold mining gave me a good, safe and happy work environment and I am female. It let me pay for university. My British Columbia mining town is empty of people now as the government would not allow development. If you take Google along the Alaskan panhandle, there is vast emptiness even though the government warned about deforestation and land slides by the evil mining companies. Where is that desert? Just forest. Nature comes back in fast. I was recently at a speech by one if the companies involved with Keystone pipeline and an educated investor asked how they will protect the environment in my old home town. He said, “the people eke out a living fishing.” I made ten grand a summer when mining was allowed.

  9. Indaba

    Walmart is to be applauded to try and do this ethical gold, etc. there are Canadian manufacturers making the gold chains and their gold is coming from various more mainstream places. Ethical coltan is a tough one as the main microprocessor manufacturers are in China and they use minerals from the Congo without batting an eye. The Chinese treat their own people with that same lack of ethics that I saw with Mugabe. So what if families are separated all year? I can guarantee you that we are all using Congo coltan in our technology every day. Over the long term, I have seen the good guys like the Canadians, get forced to close because of government policy and then thirty years later, those companies are being bought or partnering with the Chinese government. Vancouver is now majority Asian. So my attitudes are changing because Canadians seem to have let their politicians sell their heritage over thirty years by having on blinders.

  10. Guruforhire

    I love Tiffany’s

    Their sterling silver line is good and fairly affordable for the husband trying to get out of the doghouse on a budget.  No matter what the blue box gets the job done.  So does Louboutin but hey.

  11. CoolHand

    Honestly, I quit reading when I got to “The typical 18 karat wedding ring creates approximately 20 tons of waste.”

    I really wish that just one time you journalistic folks would do some damned research before you write your bleeding heart pieces.

    For one thing, 99.7% of that “waste” is non-gold-bearing rock.  Plain old rock, no more toxic than any other rock in the world.  It gets dug up and piled out of the way.  That is the sum and total of its impact on the environment.

    For another, that’s what you’ve got to do to get gold and a host of other useful metals out of the ground.

    You get a choice, you can either live a technologically rich life, or you can not mine for heavy metals.

    You cannot do both.

    The very idea that the mining industry needs yet another layer of (no doubt highly expensive and onerous) regulation piled atop the already massive heap of regulations they deal with is idiotic.

    Africa is not going to be civilized by making Americans fill out forms or pay more for gold or tungsten.

    Make peace with that fact.

  12. Instugator
    Indaba: China has colonized Africa but in a very different way to the Europeans.

    Sorry, but if you are talking about foreign workers in enclaves then China has colonized Africa in the same way that US companies have colonized Saudi Arabia – which is to say, not at all.

    Your use of the emotionally charged term in your varying descriptions do not meet the legitimate definitions of Colony -

    1. a group of people who leave their native country to form in a new land a settlement subject to, or connected with, the parent nation.2. the country or district settled or colonized: Many Western nations are former European colonies.3. any people or territory separated from but subject to a ruling power.

    And you are clearly not using the term to equate the enclaves of Chinese in Africa with similar enclaves in European countries – thereby meeting the final definition (a number of people coming from the same country, or speaking the same language, residing in a foreign country or city, or a particular section of it; enclave: the Polish colony in Israel; the American colony in Paris.)

    Again, are you not engaging in hyperbole when it is not needed?