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From the Congo to the open ocean, blockchain is helping companies ethically source natural resources

IBM Blockchain is being used to ensure the batteries in your car and laptop do not use cobalt mined by children

Children of the Democratic Republic of Congo (via Shutterstock).

Children of the Democratic Republic of Congo (via Shutterstock).

Auto manufacturer Ford Motor Company and battery maker LG Chem announced on Jan. 16 that they are joining forces with a major Chinese mining firm on a pilot project to use IBM Blockchain technology to trace the origin of the mineral cobalt used in batteries. More than half of the world supply of cobalt is mined in the war torn Democratic Republic of Congo, where illegally mined minerals and diamonds often fund brutal militias, and child labor and hazardous working conditions are common, according to a CBS News investigative report in March 2018.

This is just the latest example of using blockchain to enable companies to show that the products they sell are ethically sourced. As Modern Consensus reported in December, South Africa’s De Beers Group has begun to using blockchain technology to ensure it is not sourcing blood diamonds. And as we reported on Wednesday, Spanish clean energy producer Iberdrola is using blockchain to enable power consumers to trace their electricity from the wind farm to their outlets.

On the same day as the Ford-LG project was announced, the WWF released OpenSC, a blockchain-enabled food tracking platform designed to help businesses and consumers avoid illegal, environmentally damaging, or unethical products through supply chain transparency.

Noting that the typical lithium-ion electric car battery requires 20 pounds of cobalt, Ford, LG Chem, and Zhejiang Huayou Cobalt have partnered with RCS Global, which specializes in auditing and compliance of responsibly sourced natural resources. It has built it mine-to-market distributed ledger technology platform on IBM Blockchain’s private enterprise blockchain platform, built on the Linux Foundation’s Hyperledger Fabric.

Cobalt produced at Huayou’s large industrial mine site in DR Congo will be traced from the mine and smelter to LG Chem cathode and battery plants in South Korea, and from there to a Ford plant in the U.S., with “an immutable audit trail created on the blockchain,” according to the IBM press release.

“With the growing demand for cobalt, this group has come together with clear objectives to illustrate how blockchain can be used for greater assurance around social responsibility in the mining supply chain,” said Manish Chawla, general manager, global industrial products industry, IBM. “The initial work by these organizations will be used as a precedent for the rest of the industry to be further extended to help ensure transparency around the minerals going into our consumer goods.”

This is not the only blockchain program focusing on cobalt, not even the first one using IBM Blockchain to do so. On Aug. 2, 2018, blockchain software development firm DLT Labs and Canadian mineral exporter Cobalt Blockchain announced the release of Mintrax, a blockchain platform designed to trace minerals through the mining supply chain from miner to user.

Questionable sourcing of Congolese cobalt has had a serious impact on Huayou. In March 2017, the Washington Post reported that Apple stopped buying Congolese cobalt dug from smaller “artisanal” mines from Huayou, citing child labor and dangerous conditions, and was working with the company to ensure that it sourced cobalt mined under ethical conditions. The average laptop battery uses about one ounce of cobalt, according to IBM.

The pilot program is expected to be completed by mid-2019, IBM said. While the initial program will focus on large scale mines, a goal is to extend it to cobalt produced in the type of small and artisanal cobalt mines that Apple stopped buying from Huayou in 2017. Apple told the Post that it was committed to returning to that market once ethical sourcing issues could be corrected.

While the Ford-LG-Huayou program focuses on cobalt, IBM says the goal is to extend the blockchain technology into other battery materials and minerals, as well as rare earths. These include tin, tungsten, tantalum, and gold, four minerals that U.S. law requires be certified as obtained from mines free of Congolese militia control. Along with the automotive industry, aerospace, defense, and consumer electronics are targets for the IBM minerals platform, and plans to involve representatives of those industries in a governance board are underway, IBM said.

Tracing sustainably sourced toothfish

On Jan. 17, celebrated Australian chef Matt Moran cooked the first Patagonian toothfish caught under the auspices of a blockchain-based sustainable sourcing initiative created by WWF Australia and Boston Consulting Group’s BCG Digital Ventures.

The Patagonian toothfish—a species of cod—was caught by Austral Fisheries, which has partnered in the venture. An RFID tag was attached to the fish on the boat when it was caught, which allowed GPS to confirm that it was caught in the MSC certified fishery around Heard and McDonald Islands in the Southern Ocean. In Perth, the fish was filleted and its RFID tag converted into a QR code for each piece, which consumers can scan to track their meal’s origin. The system can also be used to track information such as the temperature of the fish or other produce like beef in storage and throughout transport.

The goal is to “help businesses to remove illegal, environmentally-damaging or unethical products from their supply chains, giving consumers much needed peace of mind about the products they are purchasing,” the WWF said.

“Through OpenSC, we will have a whole new level of transparency about whether the food we eat is contributing to environmental degradation of habitats and species, as well as social injustice and human rights issues such as slavery,” added Dermot O’Gorman, WWF-Australia’s CEO, in a statement. “OpenSC will revolutionise how we all buy food and other products as well, enabling more informed decision making by consumers, businesses, governments, and industry bodies.”

Calling OpenSC a “profit with purpose” startup, O’Gorman said it would “help stamp out unscrupulous operators who fish in illegal areas, bulldoze virgin forests, or engage in slave labor.”

Austral Fisheries has committed to implement OpenSC across its entire toothfish fleet in 2019, the WWF said. The company is part of the Maruha Nichiro Group, the world’s largest seafood company. Its president, Shigeru Ito, chairs the Seafood Business for Ocean Stewardship Council coalition which represents 20 percent of the global seafood market.

Leo Jakobson is a New York-based journalist who has spent much of the last 15 years covering the employee engagement and recognition business. Before that he covered the East Coast side of the Internet boom and bust, and wrote about politics in New York City. Disclosure: Jakobson owns no cryptocurrencies.

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