Case study of a Dutch Telecommunication Company: Critical Raw Material Supply and Human Rights Challenges

Abstract

Digitalisation pressures the earth's resources, especially critical raw materials (CRMs). The CRMs, are functional materials that meet current challenges and future demands in information and communication technology (ICT). The extraction and processing of CRMs are highly concentrated, mainly outside the European Union (EU). The EU is dependent on import supply. Due to growing demand, an increase in primary CRM mining is expected shortly. Moreover, research showed that primary CRM mining significantly impacts human rights abuse. The increased CRM demand and supply can have an increased effect on human rights challenges. A greater focus is being placed in the EU on preventing and mitigating human rights violations in the global value chain. However, there is limited research in the telecommunication industry on managing human rights in the context of primary CRM supply. The growing demand in CRMs for telecommunication products and technologies highlights the importance of incorporating strategies to secure their business within the telecommunication sector. Therefore, this research aims to answer the following question: What strategies can telecommunication companies deploy in response to human rights challenges in primary critical raw materials supply? The methodology is mainly based on a qualitative approach. The research includes scientific and grey literature reviews, expert interviews, internal documents, and expert workshops. Research data is analysed using the framework on human rights in primary critical raw material supply development.

The research provides an overview of human rights in primary CRM supply. It shows the drivers and barriers for KPN in how to deal with this changing environment. The main focus is on human rights in the context of Conflict Mineral (CM) supply instead of the EU CRM list. Companies don’t have a fixed strategy in place to manage human rights challenges in primary CRM supply. Secondly, a case study is performed on cobalt extraction in the Democratic Republic of Congo (DRC). The general finding was that many human rights challenges occur in primary cobalt mining in the DRC. Various human rights challenges occur in artisanal small-scale mining (ASM) as well as in large-scale mining (LSM). Furthermore, among telecommunication companies, there are different levels of advancement in human rights due diligence practices in CRM supply. However KPN has an emergent strategy on the topic, the company is behind their peers in the level of advancement. At last, a strategy is developed for managing the human rights challenges in primary CRM supply. Experts validated the strategy.

The thesis concludes that becoming a responsible Mineral Initiative (RMI) member and implementing the OECD framework would be a decent start. The RMI provides tools and resources to advance on the topic. Having limited resources and capacity and dealing with complex mineral supply chains makes that a suitable option for KPN. In the medium term, KPN should explore additional actions, which should be the building blocks to advance on the topic and strengthen the company's position.

Further research could focus on exploring case studies CRMs in relation with human rights challenges, and understand the interaction of the system in depth. Moreover, develop schemes and guidelines for responsible supply of all minerals in LSM and ASM sector that are linked to human rights challenges. This is important in order to ensure that companies have a strategy in place. A strategy were human rights challenges are well managed and ensure responsible CRM supply.