Tesla Is Deeply Committed to Responsible Material Sourcing, as Highlighted in its Conflict Minerals Report

Photo courtesy of Tesla, Inc.

Tesla published its Conflict Minerals Report for 2020, which outlined its operating principles and actions to identify unscrupulous suppliers. For the manufacturing of its products, the company strives to use only materials produced in accordance with the principles of responsibility. Any supplier that does not meet the requirements will be excluded from the supplier list if it does not take steps for responsible mining.

Tesla's supply chain is a hybrid of traditional auto and high-tech suppliers from around the world. The company seeks to obtain information from them about the origin of materials in order to avoid working with those that can be mined in violation of the principles of responsibility.

Many Tesla Tier 1 suppliers do not purchase all of their raw materials directly from mining/processing companies but instead get them from their own suppliers and sub-suppliers. Therefore, reliably determining the origin of all the products of the company's suppliers is a difficult task, but Tesla makes every effort to achieve this goal.

All of Tesla's supply chain partners are subject to their Supplier Code of Conduct, which is the foundation for ensuring social and environmental responsibility and ethical behavior throughout their supply chain, regardless of industry, region, or material. Tesla, along with its partners and independent third parties, conducts audits to ensure that these principles are in place. If there are reasonable grounds to believe that a supplier partner is in violation of their Code, Tesla will withdraw from this relationship unless the violation is satisfactorily addressed.

Pursuant to Tesla's Policy, supplier companies are expected to use reasonable efforts to ensure that parts and products supplied to Tesla are “DRC conflict free,” meaning that such conflict minerals do not benefit armed groups in the Democratic Republic of the Congo (DRC) or any adjoining country. “Conflict minerals” are defined as:

• columbite-tantalite (tantalum);
• cassiterite (tin);
• gold;
• wolframite (tungsten); and
• any derivatives of the above.

These materials are considered “conflict free” if they are found not to be providing any benefit to armed groups within the DRC or its adjoining countries. Tesla recognizes the importance of mining responsibly and in a way that contributes to economic and social opportunity and development in the DRC region.

Tesla is committed to ensuring that slave or child labor or human trafficking is not occurring within its supply chain. Tesla will not accept products or services from suppliers that engage in human trafficking in any form.

Tesla undertakes:

• Continuously evaluating its supply chain to address any risks related to conflict minerals, human trafficking, slavery, and child labor;
• Reviewing suppliers’ practices to ensure their compliance with Tesla’s Policy;
• Requiring from their Tier 1 suppliers to certify that their materials incorporated into Tesla products comply with the applicable laws related to conflict minerals, slavery, child labor, and human trafficking of the country or countries in which they are doing business;
• Disciplining contractors and appropriate parties who fail to meet the requirement of our Code and Policy, including potential termination of contract;
• Ensuring appropriate Tesla employees are aware of issues regarding conflict minerals, human trafficking, child labor and slavery, particularly with respect to mitigating risks within Tesla's supply chain;
• Investigating if Tesla has a reasonable basis to believe that a supplier may be engaging in human trafficking, slave or child labor, or use of conflict minerals; and
• Transitioning away from purchasing goods or services from any supplier that is believed to be engaging in human trafficking, slave or child labor, or use of conflict minerals if the supplier does not take corrective actions.

Due to Tesla's downstream position in its supply chain, any attempt to understand the origin of raw materials depends on cooperation with suppliers. In total for 2020, more than 80% of suppliers provided relevant information, but Tesla is aiming for 100%. Following verification, Tesla has uncovered no evidence to date that its suppliers’ sourcing of 3TG materials has contributed to conflict or human rights violations.

© 2021, Eva Fox. All rights reserved.

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Article edited by @SmokeyShorts, you can follow him on Twitter

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