Challenges in Sustainability Certification of Metals

Steven B. Young University of Waterloo, sb.young@uwaterloo.ca

Goretty Dias University of Waterloo, gdias@uwaterloo.ca
Yuan Zhe University of Waterloo
Abstract. Why is certified metal not available in the same way as commodities like wood,
cotton and fish? Responsible sourcing of metals (and the minerals from which they originate)
confronts unique materials management and market complexities. Based on a review of
certification programs, procedures and activities this paper examines challenges to responsible
sourcing in the supply-chain of metals. Empirical evidence was derived from the Conflict-Free
Smelter Program, an initiative lead by the electronics industry to address the problem of conflict
minerals. Challenges to metal certification involve business and physical barriers to tracing
metal flows, including mixing and transformation of materials that takes place in upstream
production. Chain-of-custody models have not matured for metals programs and there is
variation in the choice of appropriate sustainability criteria across schemes. Experience from
certification programs in other commodity sector inform how these challenges might be
overcome.
Proceedings of the International Symposium on Sustainable Systems and Technologies (ISSN 2329-9169) is
published annually by the Sustainable Conoscente Network. Melissa Bilec and Jun-Ki Choi, co-editors.
ISSSTNetwork@gmail.com.
Copyright 2013 by Steven B. Young, Goretty Dias, Yuan Zhe. Licensed under CC-BY 3.0.
Cite as:
Challenges in Sustainability Certification of Metals. Proc. ISSST, Steven B. Young, Goretty Dias, Yuan
Zhe. http://dx.doi.org/10.6084/m9.figshare.956306. v1 (2013)
Introduction. Voluntary product sustainability initiatives connect upstream producers to
downstream manufacturers and users of natural resources, and convey information on
environmental and sustainability performance of processes in product supply-chains. These
non-state market driven initiatives (Cashore, 2002) are created and operated by multi-
stakeholder collaborations between industry and non-profit organizations, and typically rely on
environmental or social standards as a governance mechanism (Ponte, Gibbon, & Vestergaard,
2011). Sustainability certification programs have become widespread for biotic products in the
agriculture, food, fishery and forestry sectors. End-consumers can access more than 400
ecolabels in almost 200 countries covering over 25 industrial sectors (Big Room Inc., 2013).
For abiotic commodities, there are few product labeling and certification programs, with a small
number of new schemes in the jewellery and constructions sectors. Metals-focused programs
are the subject of this paper. The Kimberley Process Certification Scheme, although similar and
well known, is not non-state market-driven as it is based on government-enforced regulation of
imports and exports (Haufler, 2010).
A new regulation in the United States on conflict minerals (United States Securities Exchange
Commission, 2010) has heightened awareness and raised the importance of efforts and
pressures to define the sources of metals used in end-products, especially electronics. This
regulation, which took effect in 2012, is one of several pressures on corporations and original
equipment manufacturers (OEMs) who, in turn, are strengthening their scrutiny of what was
previously a relatively weak level of interest concerning the supply-chain and sustainability of
metals (Fleury & Davies, 2012; MMSD Project, 2002).
Research Question. What are challenges to sustainability certification of metals, and how can
these challenges be overcome given the experiences of other certification programs?
Investigative Method. Three levels of analysis were performed. First, a desktop review of
diverse commodity certification programs was undertaken to understand complexities and
characteristics of certification schemes. General commodities considered included wood, cotton,
fish and diamonds. This baseline helped define structures and features of programs.
Second, several programmatic efforts on metal certification were examined in detail:
- Fairmined Gold developed by the Alliance for Responsible Mining, which focuses on
artisanal and small scale mining in Latin America.
- The Green Lead program developed by the mining industry in the late 1990s, which
operated for about a decade providing stewardship activities in the life cycle of metallic
lead (Roche & Toyne, 2003).
- The Responsible Jewellery Council (RJC), which completed its first certification for
recycled gold in 2012 and operates a chain-of-custody scheme for gold and platinum
group metals.
- Certified sourcing of building materials, including a specific project in the United
Kingdom in the early 2000s on responsible sourcing of copper roofing (Eden Project,
2012).
- The Conflict Free Smelter Program (CFSP) which was created by the Electronic
Industry Citizenship Coalition and the Global e-Sustainability Initiative, and now operates
as a program under the Conflict-Free Sourcing Initiative.
Published standards, protocols and guideline documents were obtained and examined for how
mineral and metal flows are assessed and how certification is administered. Where available,
program activities and aggregated performance results were gathered. For example, some
programs publish indicators on the numbers and types of organizations and materials that have
been found compliant to program requirements. Specific certificates of compliance or
documentation on certified companies and facilities were accessed for some programs.
Third, empirical evidence was acquired through direct active participation in the CFSP in 2012
and 2013. Participation included committee meetings, telephone and email correspondence with
program managers, and conversations with auditors and with companies that participate in the
responsible sourcing program. This provided a depth of information on approaches and efforts,
including information on companies that were found non-compliant to the program protocol.
Evidence included confidential documents obtained via company audits at over 50 metallurgical
facilities around the world, showing details on purchasing practices, policies and management
systems. A detailed description of the CFSP program and its status are provided elsewhere
(EICC & GeSI, 2013; Young & Dias, 2012; Young, Yuan, & Dias, 2013).
Results and Discussion. Baseline analysis identified program governance, certification
processes and sustainability criteria as important areas in certification programs. The analysis of
metals programs showed that most schemes have achieved limited or moderate success
implementing certification, given limited market uptake. Programs that are driven by
downstream users of materials appear to achieve higher levels of participation. The RJC and
Fairmined programs include product labeling in their scope, unlike other metal programs which
target business users.
The CFSP does not certify materials; rather it provides third-party assurances that compliant
smelter and refinery companies are sourcing conflict-free raw materials. The CFSP concerns
the supply-chain of specialty metals (tantalum, tin, tungsten) and gold that are ultimately used in
OEM electronics and other manufactured products. Operating since late 2010, the scheme aims
to help firms satisfy the United States regulation on corporate disclosure of use of conflict
minerals. This is implemented by focusing on the limited group of several hundred smelters and
refineries around the world that form a pinch-point in the complex metals supply-chain (Figure 1).
The program promotes voluntary establishment of purchasing controls and management
systems in smelter and refinery firms.
Across the metals programs examined the following themes emerged on metal-sector
challenges to sustainability certification.
Mixing and transformation of metal flows. There are business, market and commercial barriers
to tracing of metal flows in supply chains. This poses unique materials management and market
challenges to metal certification. Programs are confronted with issues like commercial
confidentially of suppliers. Based on records at facilities, buyers of minerals at smelters and
refineries typically procure multiple sources and frequently change suppliers. Metals markets
operate globally and raw materials are sourced from multiple regions, often multiple countries.
Mixing of streams in metal supply-chains inhibits material traceability, obscuring the origins of
materials through a production steps. Traceability of materials is further complicated as recycled
materials are also mixed with primary materials. Gold, which is a subject of three of the
programs examined, presents additional problems because it is especially easily smuggled
across borders, easily melted and often mixed in small quantities.
There are also physical challenges in determining the quantities and pathways of materials in
supply chains. Nine or more tiers may exist between minerals extracted from mines before
metal reaches final manufacturing into OEM products (see Figure 1). Unlike most other
commodities (biofuels being a notable exception), metallic materials undergo significant
chemical and physical transformations during production. This is apparent mostly in upstream
processes: at smelters, where minerals are converted into metallic form, and at refineries,
where crude metal is purified into refined high-grade metal.
Studies on materials flow analysis may assist in identification of flows and quantification at a
global scale (Gerst & Graedel, 2008); however tracing of specific flows for purposes of supply-
chain certification demands resolution of flow analysis at company and facility levels. The
metals programs examined have not quantified metal flows, for example the amount of certified
metals as a fraction of annual supply or of the stock of material in use.
Figure 1: The supply-chain of conflict-minerals (Young & Dias, 2012). The Conflict Free Smelter Program
focuses on a defined population of smelters and refiners, and has identified approximately 200 to date. The chain-of-
custody of minerals from mine to smelter or refiner is the subject of a number of collaborative initiatives, including the
Conflict-Free Smelter Program. The chain-of-custody of metals from smelters and refiners downstream through the
manufacturing chain to OEMs is the responsibility of individual companies and their suppliers.
Chain-of-custody models. Based on looking at programs on forestry products and biofuels,
certification standards and third-party auditing are widely used in commodity programs. Metals
programs are adopting similar types of standards as initiatives become more formal. Central to
these efforts are frameworks and principles for sustainability certification, like those developed
by the ISEAL Alliance (ISEAL Alliance, 2012). Chain-of-custody models are particularly
important, as they provide structure and rules that enable the assurance of provenance of
products. Chain-of-custody assists in tracking and provision of information across global supply-
chains. ISEAL Alliance outlines four chain-of-custody approaches that vary in rigor: product
segregation through the supply chain, identity preservation, mass balance and book-and-claim
credits (ISEAL Alliance, 2012).
Metal programs are still evolving on how chain-of-custody approaches may operate for the
sector. The CFSP, RJC and Fair Trade approaches employ variations of product segregation
chain-of-custody. However, like the Eden Project, programs in conflict-free sourcing are
smelters &
refiners
OEMs
assembly
components
chemicals &
materials
traders
Conflict Free
Smelter program
company
reporting
template
in-region
initiatives
mines
traders
chain-of-
custody
of metal
chain-of-
custody
of
mineral
compliance of
facility
SB Young 2012
underway that include controls that maintain identity preservation via a closed pipeline
sourcing of metals from mine to end-user (KEMET, 2013).
Sustainability criteria. The performance criteria used by metals programs vary from narrow
single-issues to broad sets of sustainability metrics. Other established commodity programs, for
example on wood or fish products, tend to emphasize environmental criteria in areas such as
natural resource management, air emissions and chemical use. Metals programs, which include
mining activities in their scope, often emphasize social considerations like labor and human
rights concerns. Conflict-minerals programs that strongly focus on human rights concerns have
been criticized for ignoring environmental and biodiversity problems (Levin et al., 2012).
In general across metal programs there is variability on the choice of appropriate sustainability
criteria, particularly given the breadth of environmental, economic and social issues in the sector
(MMSD Project, 2002). This aspect of program development across mining, minerals and
metals is relatively immature and is likely to be an area of significant future research and
industry concern. Experience from other sectors, including a meta-review of certification
program effectiveness (Steering Committee of the State-of-Knowledge Assessment of
Standards and Certification, 2012), suggests that when commodity programs are properly
designed and include frameworks to assess program outcomes, they can inform and assure
businesses and consumers, and thus help move markets towards products with improved
sustainability performance.
Conclusion. Challenges to metal certification were identified across three areas. Other
commodity programs provide experience and approaches that might be used in initiatives for
certification of minerals and metals. This is an emerging research area, and is important given
new requirements and growing interest in responsible sourcing of materials.
Disclosure. Steven B Young is a member of the Audit Review Committee of the Conflict Free
Smelter Program.
Acknowledgements. We are thankful for the cooperation of the EICC and GeSI Conflict Free
Smelter Program, and recognize Chris Burke, Alberto Fonseca and Megan Spilka OKeefe for
providing assistance in this work.
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