Responsible source
Trafigura sources (buys), transports, blends and refines, stores and delivers oil, gas, minerals and metals. Our activities form a key part of the global economy, bringing natural resources from where there is plenty of them to where they are needed. Along the way, we and the natural resources we handle are in contact with society and all kinds of stakeholders in many different ways.
We are committed to being transparent in what we do and we engage with our stakeholders and anyone interested in our activities in a wide range of ways. By launching this blog, we aim to provide insights in what we do and about the markets we are part of.
As you can see, it is actually a three-for-one blog. We intend to invite guests to make contributions under the obvious heading of “Guest view”. Under the heading “Responsible sourcing“, we provide insights on our approach to Environmental, Social and Governance (ESG) issues. Lastly, our Chief Economist Saad Rahim and his team will provide contributions under the heading of “Market view”.
Responsible sourcing
For us at Trafigura, it is essential that we can establish custody of the supply chain. We need to know where the materials come from and that they have been sourced and handled in a responsible way. Our commercial partners, as well as our financiers, rightfully require assurance of this. We need to know that the human rights of those impacted by each supply chain have not been infringed, that environmental impacts are limited, and that good governance upheld.
We source a lot of cobalt, used in batteries. We do this from the Democratic Republic of Congo. Some of the cobalt and other minerals we use in modern societies is produced by small scale miners. Throughout the developing world, millions of people depend on small-scale mining, panning gold, crushing rocks in search for copper and cobalt, tin and many other minerals and metals.
In the shadow of a large-scale mining operation, we at Trafigura have worked with the mining company Chemaf, local partners and civil society organisations on the Mutoshi Cobalt Project. Here we have arranged semi-mechanised mining activities within the framework of Trafigura’s policies and the OECD’s Due Diligence Guidance for Responsible Supply Chains. Anywhere between 1000 - 5000 miners have participated in the project. This has been a significant commercial operation, a rules-based enterprise with safeguards such as personal protective equipment as well as machinery so as to allow a cooperative to organise a large group of independent small-scale miners.
Today we are launching the report The Mutoshi Pilot Project - Local economic impact of a project aimed at formalizing artisanal and small-scale mining, written by Sara Johansson de Silva, Tove Strauss and Nene Morisho. You can download it here.
We wanted to understand the economic impact of the project and they have helped us do just that. We gave them free hands.
A large group of miners were interviewed and I particularly recommend that you read the many quotes in the report. “I must tell you that women’s working conditions have improved significantly”, said one of the miners interviewed for this report. If we wish to bring dollars and development opportunities to poor communities in mineral-rich areas, we should consider how we can replicate similar semi-mechanised and standards-based projects.
We have previously produced a video about the Mutoshi project, based on an interview with James Nicholson, Head of Corporate Responsibility at Trafigura and who has spearheaded this effort within the company. We have had many visits to the project and you can for example read here and find out what the Financial Times wrote about it.
Trafigura’s Chairman Jeremy Weir addressed the FT’s Africa Summit in October in London, where he said:
“For sure, it is not easy to do business in countries like the Democratic Republic of Congo. But it can be done and it can be done responsibly. When we operate in higher risk countries, we need to do so with clear commitments to high standards, like for example the OECD’s Guidance for Responsible Supply Chains of Minerals. Companies and development partners need to work together with the government to ensure that these standards are adhered to. Shunning the DRC is not helping anyone, least the 80 million Congolese, of which approximately three out of four according to the World Bank live in extreme poverty. The DRC and many other countries in Africa needs foreign investment and financial services and we can all do a better job at providing it.” Read the full speech here.
Let’s not turn our backs on the millions of poor miners around the world, whether they work at large industrial mines or are small scale entrepreneurs. Let’s work on ways to enforce standards and create opportunities.
Source responsibly,
Jonas
Read more here:
The Mutoshi Pilot Project Report
Congo, child labour and your electric car. Financial Times, July 2019