The Challenges of Ensuring a More Socially Sustainable Cobalt Supply for the UK

Therefore, ‘tougher and more stringent’ legislation on HRGD is coming, at least for newly regulated companies in the EU. corporate sustainability diligence legislation. However, it should be noted that European companies are not sufficiently prepared for this development. Although many of the largest firms are dependent on cobalt, recent research shows that most pay ‘lip service’ to HRDD. One Survey of Europe’s 100 largest multinational companiesIn firm reporting, rhetorical commitments and promises of the future appeared to outweigh substantive actions. This suggests that upcoming legislation may not be sufficient to develop effective mechanisms that encourage action-oriented and concrete engagement on HRDD to prevent harms in supply chains. Typically, firms appear to adopt more symbolic strategies aimed at managing impressions rather than reducing risks to vulnerable workers where they operate globally.

NGOs Can Reduce Corporate ‘Hypocrisy’ on Human Rights

Focusing on research in extractive industries, the track record on human rights performance is poor. The UNGPs include three pillars that require companies to:protect, respect and find solutions‘ watershed communities where mineral extraction takes place. The upcoming study on physical integrity violations in the mining sector tracked 74 cases, including cobalt supply chains, over a 7-10 year period and focused on providing the ultimate ‘remedy’ pillar following human rights violations. This researchThe case currently under review has revealed that full resolution, which includes compensation to victims, is extremely rare. Some companies have taken partial steps towards compensation in terms of acknowledging the damages caused and providing compensation processes. But it seems here that the companies only did this when external pressures exposed their hypocrisy. In other words, if a firm has made explicit commitments to protect human rights and abuse has occurred, NGOs have had some influence in creating the conditions for firms to respond to the victim’s claim. If NGOs were not involved and the company did not make such commitments, even partial solution steps would not usually be taken by the companies. The policy implications here are that requiring firms’ human rights commitments and encouraging NGO outreach/involvement in operations can lead to better human rights performance.

When Can Corporate Human Rights Policies Help?

Human rights commitments are only part of the answer to creating a more sustainable cobalt supply chain, and their relationship to performance is complex. For example, published studies in other extractive contextsfound that, like the oil and gas sector, human rights policies continue to be an important means of greenwashing for firms, that is, separating these corporate policy commitments from their operations. Olsen et al. (2022) It studied 121 companies over a five-year period and found that for human rights policies to work and prevent abuses, they must be both permanent and adhered to over time. The study suggested that policies should also be of high quality. Firm policies should be linked to what researchers call ‘preparation mechanisms’. These include community connections (‘systemic mindset’) and an existing background in ESG and corporate social responsibility (‘internalisation’) and require participation in global initiatives such as: Extractive Industries Transparency Initiative, Global Reporting Initiative And UN Global Compact (‘interesting’). The implication here is that different ‘actions’ that appear to comply with ESG standards are not enough. Improving performance requires concerted and sustained efforts. Community and local government relationships take time to develop, and firms may not always be able to successfully integrate local stakeholders into their environments to properly engage the communities they impact. The primary implications for policy are therefore to encourage the development of these secondary/primary mechanisms necessary to reduce the negative impacts of mining operations.

The views expressed in this Commentary are those of the authors and do not represent the views of RUSI or any other organization.

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