One of the more substantial areas of disclosure in Apple's reporting its 2012 Supplier Sustainability analysis is in the area of conflict minerals. Apple provides a level of detail that is lacking in the rest of the report, especially when it comes to examining multi-tier behaviors and sub-SKU level material traceability. We might even describe Apple as an early leader in this area based on what we know are the early stage efforts of most other companies in complying with conflict minerals (Dodd-Frank) requirements. Specifically, Apple notes that it requires its suppliers "only use materials that have been procured through a conflict-free process and from sources that adhere to our standards of human rights and environmental protection."
Apple further reports that it was among the "first major electronics companies to completely map its supply chain in order to trace the materials used in our products back to their source." And since it started this effort, Apple has identified "218 Apple suppliers that use tantalum, tin, tungsten, or gold to manufacture components" as well as "the 175 smelters they source from." When it comes to tantalum, 41 of Apple's suppliers report using this metal, sourcing material from 15 smelters. 58 Apple suppliers use tungsten (with a more fragmented supply base of 38 smelters). For gold, the number of suppliers climbs to 169, with 87 smelters. And for tin, 179 suppliers source from 58 smelters.
Unlike other areas of its supply chain where Apple has disclosed little about multi-tier supplier development and training programs, Apple notes that in partnership with other companies, it is working "on an outreach program to train management at smelters about the need for conflict-free sourcing of raw materials...to date, more than 34 smelters have received onsite training and consultation through this endeavor." Yet what's not clear from this initiative is how effective Apple has truly been in deterring conflict mineral usage in practice. As our sister-site MetalMiner has covered (here, here, and here), there are ways companies can obfuscate the original source of materials. For example, if a smelter is using scrap product that originally came form a conflict region, there is no way to discover (as far as we know) this fact. However, this supplier may be in "on-paper" compliance if the recently mined raw material is certified conflict free, despite the supplemental use of scrap.