Mitigating the risk of future unintended consequences

Earlier this year, our team travelled once more to Rwanda, this time to consult with stakeholders of the mining and mineral trade sector and seek their views on blockchain technology, data tracking and value allocation.

Faithful to our mission to make innovation benefit all supply chain participants, particularly communities and businesses in resource-rich countries (otherwise known as conflict-affected and high-risk areas…), we have followed a regrettably unconventional approach in the design of the SustainBlock project. We asked people what they need.

From The New Times, “Rwanda’s Leading Daily” www.newtimes.co.rw

While most #blockchain4supplychain projects are at best designed with efficiency in mind, or in most cases to specifically complicate market access for marginalised mining actors, we primarily view that technology as an enabler for new forms of reliable information sharing.

SustainBlock is among the Origin Discovery (ODi) projects we support. It is designed to provide first-mile mineral supply chain insight to consumer-facing, product-manufacturing, mineral end-users — and overcome some of the challenges associated with mineral supply chain due diligence.

The identification of mining sites which are present in their supply chain (something they have yet to achieve) will enable final users of minerals to:

1. meet their supply chain due diligence obligations
2. fully manage provenance risk
3. access useful information towards measuring local impact

Another goal is to facilitate a reduction in the amount of resources spent by international companies to identify “conflict-free smelters or refiners” and instead promote resource allocation further upstream. Where a difference can really be made.

As we previously studied, blockchain can be relevant for ODi in that it allows supply chain intermediaries to provide information about their own suppliers, without the risk of that information being used for any other purpose (like sharing it with competitors). In turn, brands can now discover mines which are present in their supply chain without interfering with the confidentiality of commercial transactions along the way.

With that in mind, the question becomes: what information should and would mineral end-users access from those mines?

Our consultation process in Rwanda was articulated around three objectives:

• First-party update on challenges related to the mining sector and mineral supply chain due diligence
• SustainBlock project introduction and confirmation of alignment with local stakeholders’ interests
• Upstream data assessment, opportunities and constraints: as our team considers making local information available to distant stakeholders, we must align end-user expectations with the realities of information availability in resource-producing countries. Of particular focus are the issues of data availability, reliability, confidentiality, privacy and sovereignty.

Some relevant findings

• All stakeholders recognise the value of locally available data and the way such value is presently underutilised and/or captured by third-parties such as due diligence programs and international NGOs
• Government stakeholders generally support SustainBlock project objectives and the broader goal of improving the terms of the international mineral trade for Rwandan operators. No fundamental concern was expressed with regards to the use of data, which is already being exploited by international third-parties at the country’s expense
• Mining operators agree with our goal to leverage blockchain as a way to bridge the due diligence gap between miners and consumers, to potentially unlock value for parties involved in due diligence efforts. Their main interest is in a reduction of costs associated with due diligence, as well as providing further assurance to investors
• The local civil society, in particular the Rwanda Women Network, also endorsed SustainBlock as a way to facilitate genuine consumer-side engagement in support of mining communities, including to address gender-related challenges. Our colleagues at the Rwandan Extractive industry Workers Union also expressed keen interest in BetterChain’s stated objective to account for multiple sources of local feedback / incorporate all perspectives into the due diligence process.

In the SustainBlock piloting context, the main objective is to demonstrate the accountability link between a specific mine site and participating end-users. Government agencies, mining companies, traders note that information which is already shared with receiving international smelters (as part of due diligence efforts) may also be made available to end-users — particularly if it can result in financial support to local information collection. In that regard, government data is considered as the most immediately usable for pilot purposes. Of course, any data related to individuals which is not anonymised or aggregated is out of line.

Next, we must find out from consumers what type of mineral provenance information they really want to see. And that’s another story.

We wish to thank the European Partnership for Responsible Minerals for their incredible support along this journey, as well as our project partner iPoint.