The Dark Side of Samsung’s Value Chain: The Human Costs of Cobalt Mining “BLOOD, SWEAT AND COBALT”

Krummel, Daniel and Siegfried, Patrick (2021): The Dark Side of Samsung’s Value Chain: The Human Costs of Cobalt Mining “BLOOD, SWEAT AND COBALT”. Published in: Journal of Geoscience and Environment Protection (GEP) , Vol. 9, No. 2 (26 February 2021): pp. 182-203.

Abstract

Samsung has been implicitly linked to human rights abuses and wider social downgrading propagated within the Democratic Republic of Congo (DRC). Reports by different studies have shown artisanal cobalt mines (ASM) to exploit child labour and subject workers to perilous conditions. The IT multinational is dependent upon Congolese cobalt as a key element in lithiumion batteries used to produce their array of electronics. However, irresponsible cobalt sourcing practices undertaken by Tier 1 suppliers, Glencore and Huayou, have resulted in ASM operations being incorporated into Samsung’s global value chain, as Tier 2 suppliers. Analysis of the relationships underpinning Samsung’s cobalt value chain theoretical framework, highlights the presence of a relational governance structure, with captive elements among upstream Tier 1 and Tier 2 suppliers. Samsung is thereby reliant upon both Glencore and Huayou to transmit and enforce private codes of conduct down the value chain to expel human rights abuses. In conjunction, the DRC’s weak and unstable institutional environment has facilitated corruption and the improper enforcement of laws across the ASM industry. It is thereby imperative that Samsung takes ownership of the issues present within its value chain, as both Tier 1 suppliers and the Congolese government have failed to ensure responsible cobalt sourcing practices to date. This report recommends that Samsung adopt a holistic action plan, not only utilising their own resources and capabilities, but also those of critical stakeholders including Tier 1 suppliers, NGOs and the DRC and South Korean governments. Most prominently, this report suggests that supply chain transparency can be improved using certificates of origin and blockchain technology. Furthermore, it is recommended that poverty alleviation is targeted as a key measure through “Cobalt for Development”, an action plan designed to instigate both social and economic upgrading within ASM operations and the wider community. By employing a multi-scalar approach and addressing the issues inherent across multiple governance levels, Samsung can ensure a responsible source of cobalt be sustained.

• Item Type: MPRA Paper
• Language: English
• Keywords: Value Chain, Ethics, Child Labour
• Subjects: A - General Economics and Teaching > A1 - General Economics > A13 - Relation of Economics to Social Values; L - Industrial Organization > L6 - Industry Studies: Manufacturing; L - Industrial Organization > L7 - Industry Studies: Primary Products and Construction > L72 - Mining, Extraction, and Refining: Other Nonrenewable Resources; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L96 - Telecommunications; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M11 - Production Management

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