On Electric Vehicles, Congolese Cobalt and Corruption
International security experts and climate change activists have long hoped to replace gasoline vehicles with Electric Vehicles (EVs), to curb society’s oil addiction and combat climate change. Due to recent engineering breakthroughs, EVs will begin to replace gasoline vehicles in the next few years. The plummeting price of lithium-ion batteries – which dropped by 85% between 2010 and 2020 – is a key driver of this. The most expensive material in today’s lithium-ion batteries is cobalt. 60% of the world’s cobalt comes from the Democratic Republic of Congo (DRC).
Sourcing Congolese Cobalt
Sourcing cobalt from the DRC entails two major risks. First, corruption is common in the country’s government bodies. Second, 20% of the DRC’s cobalt is mined in the informal sector – often by forced child laborers. To avoid being complicit in serious human rights violations, companies must reliably track cobalt from mine to market.
The DRC is at a crossroads. Battered by 75 years of brutal Belgian colonial rule, followed by a half-century under a cruel homegrown dictator, the country now hosts the world’s largest UN peacekeeping force to prevent the ethnic violence that has characterized the past few decades. The DRC’s current constitution came into force in 2006. Just ten years later, President Joseph Kabila triggered a constitutional crisis by staying in office beyond his term limit. In 2019, current President Felix Tshisekedi took office after a controversial election. It was the first peaceful transition of power in the independent DRC.
Legal Tools to Combat Corruption and Tainted Supply Chains
The international community uses various legal tools to combat corruption and compromised supply chains in the DRC.
In December 2016, New York hedge fund Och-Ziff admitted to paying over $100 million in bribes to DRC government officials in exchange for deeply discounted mineral concessions, thereby violating the US Foreign Corrupt Practices Act. In October 2018, the Ontario Securities Commission reached a $30 million settlement with Anglo-Swiss mining giant Glencore. In the settlement agreement, Glencore subsidiary Katanga admitted that it had failed to sufficiently describe “the elevated risk of public sector corruption in the DRC”. In December 2019, Glencore announced that it was under investigation by the UK Serious Fraud Office for potential bribery.
On the supply chain front, regulators and plaintiffs have both been active. The US Securities and Exchange Commission (SEC), empowered by the 2010 Dodd-Frank Act, requires listed companies to report on whether they use certain minerals from the DRC. Minerals named in the SEC rule include cassiterite, columbite-tantalite, gold and wolframite – but not cobalt. In December 2019, a Washington DC-based human rights group sued Apple, Google, Tesla and other companies on behalf of DRC families alleging that their children were killed or injured in cobalt mines.
Transition to Cobalt-Free Batteries
In addition to legal tools, engineering workarounds can help remove corruption and human rights violations from EV battery supply chains. Some of the cobalt in lithium-ion batteries can be replaced by nickel and manganese. Coupled with robust compliance and mine-to-market tracking, this is an acceptable short-term approach.
In the long term, for both ethical and business reasons, EV manufacturers should phase cobalt out of their batteries entirely. This should be done gradually, to avoid an abrupt impact to the DRC’s economy.
In June 2018, Tesla CEO Elon Musk tweeted that Tesla uses “less than 3% cobalt in our batteries & will use none in next gen”. Yet in early 2020, Tesla was reportedly negotiating cobalt purchases from Glencore. In April 2020, Glencore delisted its DRC mining subsidiary Katanga from the Toronto Stock Exchange, resulting in reduced compliance requirements.
Given the history of corruption and human rights violations in the DRC’s mineral industry, sustainable development requires that the country diversify its economy beyond mining. As Teslas and other EVs take to the roads around the world, they should not further corruption and human rights violations in the DRC.
Don’t Abandon the DRC
Despite challenges at home, the international community must support the people of the DRC as they fight the coronavirus, resurfacing Ebola, corruption, forced child labor, ethnic conflict and food insecurity. The DRC has the fourth largest population in sub-Saharan Africa, and it is projected to double by 2050.
After 9/11, international security experts paid renewed attention to fragile states as potential sources of borderless threats, like terrorism. However, due to a myopic focus on the Middle East, the DRC did not receive sufficient attention. A lesson of the present coronavirus pandemic is that human security threats can emerge from anywhere. Sustainable development in the DRC is therefore necessary for international security.