The following is an excerpt from the 2019 CSR report.
Ore extracted from a mine has value because it can be sold, smelted, and made into new products. But what’s also valuable about the ore is the data behind its origin: Where was it mined? Who mined it? Between the mine, smelter, and factory, where did it travel?
These are important questions for companies like Cisco, as we use minerals like tantalum, tin, tungsten, and gold in many of our products. We continually conduct due diligence on minerals in our supply chain to ensure their mining and sale is not benefiting armed groups or actors that commit human rights violations. But until now, precise data about the origin of minerals has been lacking. Without this data, it’s much harder for us to address human rights and other issues at their source: the mine.
The Transparensee Project aims to change that. The idea was first hatched as a system for combining innovative tagging technologies with a blockchain network to track ore from mine sites to downstream companies like Cisco. From this concept, we began building prototypes, which we took to mine sites in Rwanda, where we gathered feedback from governments, NGOs, and miners themselves.
The field study taught us the importance of designing a solution in collaboration with all stakeholders, including the mine workers. We’re applying these lessons as we continue developing this platform, seeking the right balance between data transparency and security. Pilots in other countries will give us further insights as we see this technology in action. Learn more about how we’re using blockchain as a traceability tool in the minerals supply chain in a recent Cisco white paper.
Ethical sourcing of minerals
The minerals tantalum, tin, tungsten, gold, known as 3TG, are mined around the world. 3TG are sometimes known as “conflict minerals” because of concerns about their mining and sale contributing to armed conflict and human rights abuses in the Democratic Republic of the Congo. Cisco does not procure minerals directly from mines or the smelters or refiners (SORs) that process them. However, we are committed to upholding and respecting human rights for all people, including those who work in the earliest parts of our supply chain.
Our goal is to work collaboratively with suppliers to source minerals consistent with our values around human rights, business ethics, labor, health and safety practices, and environmental responsibility. This approach includes sourcing responsibly from conflict-affected and high-risk areas. Our full commitment, informed by the UNGPs, is captured in our Responsible Minerals Policy. Our activities are aligned to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
Because Cisco does not buy 3TG directly from SORs, we collaborate with our suppliers to conduct due diligence for responsible mineral sourcing. We also work across our industry to develop tools and practices to support due diligence. We use the Responsible Minerals Initiative (RMI) Conflict Minerals Reporting Template (CMRT) to survey suppliers, review SORs they report, and request them to work through their supply chains to shift sourcing to SORs conformant with RMI’s Responsible Minerals Assurance Process (RMAP).
Cisco also participates in RMI working groups to help develop best practices and standards that increase the availability of responsibly sourced minerals. Our participation will increase in FY20. We’ll contribute to the Smelter Engagement Team, which performs research on and outreach to SORs to engage them in the RMAP process. We’ll also participate in the Mining Engagement Team, which works with upstream stakeholders to increase the quantity and quality of data that enables downstream companies to identify and mitigate risks.
After Cisco analyzes supplier CMRTs, we address any identified risks. This includes working with suppliers to remove non-RMAP-conformant SORs from the supply chain. We set the highest priority on SORs that meet Cisco’s definition of high risk.
Through the Supply Chain Human Rights Governance Committee, we regularly notify Cisco’s supply chain leadership of our progress. If a supplier does not attempt to comply with our Responsible Minerals Policy, we may escalate the supplier to global supply chain management and possibly remove them from our supply chain. In 2018, 81 percent of the identified 3TG SORs for current products had been audited by or were active in the RMAP process. For more information, see Table 10. The Conflict Minerals Disclosure and Report, published in May 2019, describes in detail how our due diligence activities align to OECD Guidance.
Beyond “conflict minerals”
Demand is increasing for accountability and transparency regarding human rights in global mineral supply chains. This extends beyond the DRC and beyond 3TG to minerals like cobalt. Cisco is committed to addressing these issues by extending our existing due diligence practices. In FY20, Cisco will initiate our first Cobalt Supplier Survey, using the RMI’s Cobalt Reporting Template (CRT) to survey lithium-ion battery suppliers.
RMI has expanded its RMAP audit process beyond the DRC and surrounding countries to include due diligence on all conflict-affected and high-risk areas (CAHRAs). In FY19, Cisco contributed to the RMI’s Upstream Due Diligence Smelter Fund. Our goals with this contribution are to:
- Support smelters making the transition to broader due diligence requirements
- Promote the adoption of RMAP assessment protocols beyond central Africa and into other CAHRAs
- Offset the due diligence cost of sourcing responsibly from CAHRAs and support peaceful economic activity in those regions
Advancing transparency through blockchain
Cisco recognizes a need to build upon current industry standards and increase the accuracy with which downstream companies report on the origin of their materials. As a contributor to RMI’s blockchain working group, we are exploring opportunities to leverage blockchain technology to provide enhanced transparency and trust. This includes valid data on the extraction, processing, and transportation of 3TG materials in Cisco products and the ability to share the collected data across the various actors in the supply chain.
In FY18, we worked with industry peers and a large-scale mining company to design and test prototypes at a small-scale mine in Africa. In FY19, we started the next phase of this project by initiating a blockchain pilot in Peru. The goal of this project is to learn how data generated in the mines at the start of the supply chain can support downstream companies to execute their responsible sourcing strategies. We also aim to understand how the value of that data can be returned to mining communities and drive peaceful economic development.
Download the full 2019 CSR report: