Conflict minerals the real link between games and violence – by Brendan Sinclair (Games Industry Biz – June 3, 2015)

Game industry’s track record of making sure its money doesn’t fund war crimes in DR Congo is improving, but still appalling

Massacres, child soldiers, mass rape, razed villages, summary executions… It’s all been happening the Democratic Republic of the Congo as armed groups have torn the country apart for years, in part funded by the sale of locally mined resources like tantalum, tin, tungsten and gold, sometimes abbreviated as 3TG or more commonly referred to as conflict minerals.

Yesterday, I covered Activision’s latest SEC filing on its sourcing of conflict minerals. The good news was that Activision has no reason to believe Skylanders or the other merchandise it sells are funding the violent conflict in DR Congo.

The bad news is that it couldn’t say the same thing last year. And as I discovered upon looking at filings from other big companies in the games industry, the worse news is that Activision’s position–based on surveys completed by its supply partners and unspecified “independent research”–is about as good as it gets.

Conflict minerals aren’t an issue for most games industry companies. Game discs don’t need conflict minerals, so the concern is generally limited to those making hardware or high-tech toys. For Activision, that means Skylanders and Blizzard merchandise.But for platform holders with a range of tangible products or multinational giants for whom gaming is just a small slice of their business, the problem of sourcing conflict minerals is a lot more pressing, and a lot further away from a solution.

Activision sent its conflict minerals questionnaire to a grand total of 16 suppliers, all of whom responded in full. Compare that to Microsoft, which received components from 357 suppliers during 2014. Of those, only 82 percent (291) bothered to return the company’s survey on conflict mineral sourcing.

Microsoft said those who didn’t respond “will be identified for possible escalation,” where the supplier is told to obtain their conflict minerals from alternative sources or have their partnership terminated. (To date, Microsoft has not terminated a single contract for this reason.)

Microsoft’s direct suppliers are only one link in the supply chain, and the company said there can be many layers of sub-tier suppliers before one finally gets down to the smelters, refiners, and mines where the origin of the materials can be determined.

Those supplier surveys identified a total of 327 different smelters or refiners in the Microsoft supply chain, 60 of which were completely unknown to the Conflict Free Sourcing Initiative (CFSI) trade group that was created in 2008 to help companies address conflict mineral issues in their supply chains. Of the 267 remaining outfits, only 148 were compliant. Many were in various stages that could lead to compliance, but Microsoft listed 42 facilities with a conflict-free status it simply described as “unknown.”

For 2013, Microsoft identified 276 active suppliers (94 percent of which responded to its survey) and created a list of 352 refiners and smelters in the supply chain. 169 of those were unknown to the CFSI. Of the remaining 183, only 83 were compliant with CFSI standards, and 38 were listed with an “unknown” conflict-free status. While some of Microsoft’s numbers were worse year-over-year, it bears mentioning that 2014 saw the addition of Nokia’s operations into the Microsoft report, greatly increasing the number of suppliers in the mix.

For the rest of this article, click here: