Tesla releases Conflict Mineral report, extending history of humane mining practices

Tesla has released its Conflict Mineral Report for the fiscal year ending on December 31, 2019. In the report, Tesla outlined its processes for securing minerals used in its products, ensuring they are obtained in humane ways that do not involve any child labor, human trafficking, or slavery. Many of the minerals are obtained through the efforts of Tesla’s suppliers. The minerals must be “DRC Conflict Free,” meaning that the materials do not benefit “armed groups in the Democratic Republic of the Congo, or any adjoining country.”

Tesla states that its conflict minerals are:

• Columbite-tantalite (Tantalum)
• Cassiterite (Tin)
• Gold
• Wolframite (Tungsten)
• and any derivatives of the above

The company states that any of its products, whether be its electric vehicles or its energy storage products, could contain some portion of these “conflict minerals.”

The materials are considered “conflict-free” as long as they do not benefit any of the armed groups in the DRC, and Tesla requires all of its suppliers to establish several processes to ensure the automaker humanely obtains them. The company writes:

“Tesla requires our suppliers to establish policies, due diligence frameworks, and management systems consistent with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (“OECD Guidance”). Tesla expects its suppliers to stay up to date with and to use validated conflict-free smelters and refiners assessed by the Responsible Mineral Initiative (“RMI”) and similar organizations.”

Furthermore, Tesla also has internal guidelines for itself that it commits to. These include:

• Continuously evaluating our supply chain to address any risks related to conflict minerals, human trafficking, slavery, and child labor;
• Reviewing suppliers’ practices to ensure their compliance with Tesla’s policy
• Requiring our Tier 1 suppliers to certify that their materials incorporated into Tesla products comply with the applicable laws related to conflict minerals, slavery, child labor, and human trafficking of the country or countries in which they are doing business;
• Disciplining contractors and appropriate parties who fail to meet the requirement of our Code and Policy, including potential termination of contract;
• Ensuring appropriate Tesla employees are aware of issues regarding conflict minerals, human trafficking, child labor and slavery, particularly with respect to mitigating risks within Tesla’s supply chain;
• Investigating if Tesla has a reasonable basis to believe that a supplier may be engaging in human trafficking, slave or child labor, or use of conflict minerals;
• Transitioning away from purchasing goods or services from any supplier that is believed to be engaging in human trafficking, slave or child labor, or use of conflict minerals if the supplier does not take corrective actions.

Tesla also has a four-step Due Diligence process to ensure that all minerals are obtained humanely.

1. Establish Strong Company Management Systems
2. Identify and Assess Risk in the Supply Chain
3. Identify and Assess Risk in the Supply Chain
4. Perform Independent Third-Party Audit of Supply Chain Due Diligence

Tesla states in its report that, “Due to its downstream position in our supply chain, any efforts to understand the origin of raw materials rely heavily on the cooperation of our Tier 1 and upstream suppliers. We have uncovered no evidence to date that our suppliers’ sourcing of 3TG materials has contributed to conflict or human rights violations.”

It does, however, list several areas as “covered countries” and states that “Tesla does not directly source from these countries and has no relationship with any companies or individuals located within their national boundaries.” The countries listed are considered “covered” as a part of the U.S. Conflict Minerals Disclosure Rules.

These countries include:

• Burundi
• The Democratic Republic of the Congo
• Rwanda
• Tanzania
• Uganda
• Zambia

Tesla’s primary goal is to accelerate the transition to sustainable energy. Although the country is focused on scalability and handling its increasing demand, it is unwilling to cut corners and intends to continue creating its vehicles in an environmentally friendly way throughout the entire supply chain.

The full report is available here.

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