Hartford conglomerate United Technologies Corp. and Fairfield conglomerate General Electric – through their supply chains – may have funded an armed conflict in central Africa responsible for grave human rights violations, according to filings Monday with U.S. Securities & Exchange Commission.
UTC said 60 of its suppliers manufactured products in 2014 that may have contained conflict materials from either the Democratic Republic of Congo or one of 10 surrounding countries. However, UTC said its due diligence into the matter could not prove or disprove whether the conflict minerals from the African nations ended up in the final products made by UTC’s subsidiaries in 2014.
GE, in its filing, reported it believed some of the materials in its products may have originated from that African conflict area, but the conglomerate could not verify exactly where all of the conflict material came from. GE said more than 50 percent of its suppliers’ identified mineral processing facilities were conflict-free.
“GE performs due diligence on the origin of the minerals used in our supply chain to better understand, define and manage the risk that such minerals are contributing to conflicts. As a result of these efforts and our citizenship initiatives, we have made substantial progress in ensuring that the smelters and refiners in our supply chain have been verified to be conflict-free,” GE spokesman Dominic McMullan.
The SEC last year started requiring that publicly traded companies determine whether any of their products contained any of four identified conflict minerals – gold, tungsten, tin, tantalum. If so, the companies had to check whether those minerals came from central Africa, and if they did, whether they funded the armed conflict in the region. London nonprofit Global Witness, which pushed for the SEC rule, said the sale of these minerals in the area surrounding the Congo has funded armed groups responsible for the rape, murder, and pillage of civilians in the region.
UTC and GE said the conflict minerals in question – which are available in many places other than central Africa – are necessary to the production of their goods. Through its subsidiaries, UTC manufactures products such as jet engines, elevators, and air conditioners, and the conglomerate has made a specific point to create products that are as energy efficient as possible. GE manufactures products such as lighting, appliances, aviation equipment, medical devices, and oil & gas exploration equipment.
To follow the SEC’s rule, UTC sent surveys about conflict minerals to 1,690 suppliers representing $10 billion in spending by the company, with 1,175 sending the surveys back. GE identified 8,947 relevant suppliers and 2,347 significant suppliers, who identified 258 refineries in the GE supply chain that use gold, tungsten, tin, and tantalum.
In their reports, GE and UTC said they are working to get 100 percent compliance from their suppliers, working to make sure all their products are conflict-free, and establishing rules with their suppliers to use minerals from outside conflict zones.
