Equities

Apple Supply Chain Faces Scrutiny Over Congo Conflict Minerals

Apple accused of using conflict minerals from DRC, despite claims of ethical sourcing and third-party audits.

By Barry Stearns

5/23, 12:17 EDT
Apple Inc.
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Key Takeaway

  • The DRC alleges Apple’s supply chain includes conflict minerals smuggled through Rwanda, Uganda, and Burundi, raising ethical concerns.
  • Whistleblowers claim Apple's verification program lacks concrete evidence of ethical sourcing, despite the company's assertions.
  • Apple faces scrutiny over its supply chain audits as lawyers question the legitimacy of its conflict-free mineral claims.

Allegations of Conflict Minerals

The Democratic Republic of Congo (DRC) has raised serious allegations against Apple, claiming that minerals mined in the conflict-ridden eastern region of the country are being smuggled through neighboring countries and potentially ending up in Apple products. The DRC's international legal team, Amsterdam & Partners, has been investigating these claims, focusing on minerals such as tin, tantalum, tungsten, and gold (collectively known as 3TG). These minerals are crucial for manufacturing electronic devices, including smartphones.

In April, the lawyers notified Apple CEO Tim Cook of their concerns, highlighting that armed groups are involved in mining these conflict minerals and smuggling them through Rwanda, Uganda, and Burundi. "It is more urgent than ever that Apple provide real answers to the very serious questions we have raised, as we evaluate our legal options," stated Robert Amsterdam, a lawyer representing the DRC. Another lawyer, William Bourdon, added, "The absence of a response is an implicit admission that the questions we asked Apple were relevant."

Whistleblower Testimonies

The allegations are supported by whistleblower testimonies from individuals previously employed within Apple’s DRC supply chain verification program. These whistleblowers claim they were terminated after raising concerns about the presence of "blood minerals" in the supply chain. Despite Apple's continuous claims of commitment to ethical sourcing, Amsterdam & Partners argue that these claims lack verifiable evidence. "Although Apple has affirmed that it verifies the origins of minerals it uses to manufacture its products, those claims do not appear to be based on concrete, verifiable evidence," the firm stated.

In a report last year, Apple asserted that 100% of identified smelters and refiners in its supply chain for all applicable Apple products manufactured in 2023 had participated in an independent third-party conflict minerals audit for tin, tantalum, tungsten, and gold. However, the lawyers suggest that Apple’s claim of sourcing its material from Rwanda is dubious, given the limited production of 3T materials in that East African country.

Supply Chain and Ethical Concerns

The eastern region of the DRC has been plagued by severe armed conflict between government forces and various rebel groups, including the M23 rebels. Much of the fighting revolves around controlling the mining and supplying of the "3T" minerals and gold. Coltan, the ore from which tantalum is mined, is critical in manufacturing smartphones and other electronics. In 2021, U.S. official data showed that Rwanda provided 15% of the global tantalum supply despite the country producing only modest amounts from its mines. Moreover, the U.S. bought more tantalum from Rwanda — 36% of its total imports, the highest among global producers—compared to only 7% from the DRC.

Apple has previously stated that it does not directly purchase minerals but commissions audits to ensure its supply chain is free from conflict minerals. In 2019, Apple instructed its suppliers to exclude five smelters and refiners who failed to pass this audit. Of the 253 smelters and refiners of 3TG determined to be in Apple’s supply chain as of December 31, 2018, Apple found no reasonable basis for concluding that any such smelter or refiner sourced 3TG that directly or indirectly finance or benefit armed groups.

Street Views

  • Robert Amsterdam, Congo's lawyer (Bearish on Apple's supply chain ethics):

    "It is more urgent than ever that Apple provide real answers to the very serious questions we have raised, as we evaluate our legal options."

  • William Bourdon, another lawyer representing the DRC (Bearish on Apple's response):

    "The absence of a response is an implicit admission that the questions we asked Apple were relevant."