Modern technology, most recently with the advent of the widespread use of smartphones, is the hallmark of progress and what sets us apart from prior generations. However, underneath these innovations that have undoubtedly transformed our lives, there is a dark underbelly. While novel technological innovations powered by lithium-ion batteries, including the ubiquitous smart device and the sleek electric car, may be shiny on the outside, inside lies an element that has led to the suffering of millions: cobalt.
Cobalt is a key component in rechargeable batteries. Although not formally on the list of conflict minerals because its profits do not predominantly fund conflicts, its extraction process is rife with grave human rights abuses. In December 2019, International Rights Advocates (IRA) filed a lawsuit in a US federal court on behalf of children in the Democratic Republic of Congo (DRC) against tech giants Apple, Alphabet (Google’s parent company), Microsoft, Dell, and Tesla, alleging that the companies are complicit in human rights abuses because they “are knowingly benefiting from and aiding and abetting the cruel and brutal use of young children in the Democratic Republic of Congo” in cobalt mines. They claim that the defendants are aware that the DRC’s mining sector depends on the labor of children, and that the conditions in the primitive mines make severe injuries and even death inevitable.
This blog examines whether a form of accomplice liability might be established in the context of complex and often muddy supply chains, such as that of cobalt in the tech industry. It will first proceed by explaining the cobalt supply chain originating in the DRC, and the human rights challenges present therein. It will then examine the application of civil liability for tech companies that purchase cobalt from the DRC under the US Trafficking Victims Protection Reauthorization Act (TVPRA), which forms the basis of IRA’s claims. In particular, it will explore whether corporate tech defendants have sufficient knowledge or intent in relation to harms occurring during cobalt extraction, as well as whether the procurement of cobalt is sufficient to constitute an act of assisting, supporting, or facilitating, and highlight some of the challenges that may prevent liability from being established.
Artisanal Cobalt Mining in the Democratic Republic of Congo
In a report from 2016, Amnesty International detailed the condition in the DRC’s cobalt mines, particularly their small-scale, artisanal mines. Miners face a number of risks, including lung diseases associated with breathing in cobalt and the threat of severe injury or death while working without sufficient safety gear in poorly constructed mines. Major accidents and mine collapses are common. Although the DRC Mining Code (2002) imposes minimum standards on artisanal mining, the regulation is poorly enforced and a number of mines operate clandestinely outside of designated zones. Furthermore, official safety protocols remain substandard. And although large scale mining companies have a better capacity to conduct human rights due diligence and construct safe mines, the majority of people in the region rely on income generated from small scale mining and thus a ban on artisanal mining would undoubtedly lead to increased poverty and instability.
Amnesty International notes that “[i]t is no secret that children mine cobalt in the DRC,” and they are particularly vulnerable because they are tasked with hazardous work such as carrying 20-40 kg bags on treacherous paths for 10-12 hours a day, and are exposed to physical and sexual abuse and economic exploitation on the job. Many children are also denied an education because they must work to help support their families. In assessing potentially wrongful conduct, this blog will specifically focus on child labor in the mines, which in many cases constitutes a form of forced labor.
A Complex Supply Chain
Amnesty International distinguishes at least seven steps in the supply chain from extraction to consumer products such as smartphones and electric vehicles. Roughly 75% of Congolese cobalt mined in the mineral-rich Katanga and Lualaba provinces is supposedly extracted by large scale mining and refining companies, but these companies in fact often source their minerals from artisanal mines, which complicates the supply chain. Because of its complexity and the many steps therein, the entire supply chain from mine to smart device is rather opaque.
An investigation by Amnesty International and Afrewatch of the Kolwezi mine in Lualaba revealed that the cobalt derived from child labor certainly enters the supply chain, despite purported efforts by companies to avoid it. Children mine and sell cobalt ore to adult miners or small-scale traders, who in turn sell it to licensed buying houses. Although the buying houses are required to purchase only from licensed artisanal miners, they have no obligation to inquire about the conditions in which the metal was extracted, including whether human rights abuses such as child labor occurred.
The buying houses sell the ore to the smelting company. Amnesty International identifies this moment as the “choke point” at which the source can still be tracked and potential human rights abuses identified; once the ore is processed, and essentially melted together, the exact source becomes almost impossible to trace. Thus, the actors after this critical turning point, including component producers, manufacturers, and ultimately the tech companies, would have a difficult time determining the source of cobalt. Indeed, according to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, these downstream companies are only expected to review (and trust) the due diligence process of the intermediary smelters that they do business with, but not necessarily conduct their own due diligence of the pre-smelting part of the supply chain.
Given that they exist at the juncture at which human rights abuses can be traced, smelting companies play a critical role in identifying potential risks so that they can be avoided. In fact, recent pressure has pushed major smelters toward taking at least some action to avoid purchasing cobalt mined with the use of child and forced labor. For example, one of the biggest smelters in the DRC and a subsidiary of Chinese company Huayou Cobalt, Dongfang Mining International (CDM), was identified in IRA’s lawsuit as a supplier of Apple and Microsoft. Huayou has long been criticized for its failure to conduct human rights due diligence. Possibly bowing to the pressure brought on by the lawsuit, Huayou announced that it will temporarily suspend purchases from two artisanal mines, “until it is sure the material they produce is free of human rights abuses.”
Another major smelter, also highlighted in IRA’s lawsuit, is the Swiss firm Glencore. Like Huayou, Glencore has long faced criticism for its dismal human rights and environmental track record. Recently, despite its plans to phase out the Mutanda mine that produced a fifth of the world’s cobalt last year, it also announced a deal with Tesla, which has agreed to source cobalt from Glencore for its new Gigafactory in Shanghai and its Berlin-based auto plant. Perhaps in light of the recent Tesla deal, Glencore has reiterated its commitment to rejecting cobalt from artisanal mines and prohibiting the use of child labor at its operations.
As the examples of CDM and Glencore show, intermediary smelting companies appear to be taking some proactive steps to ensure that the cobalt that they smelt is free from human rights risks by avoiding cobalt derived from artisanal mines. Nonetheless, as the Amnesty International and Afrewatch investigation revealed, many of the DRC’s 110,000 to 150,000 artisanal miners—including child laborers—sell their minerals to intermediaries, which in turn sell to companies like CDM. Thus, a high risk remains that cobalt from artisanal mines—using child labor—continues to end up in their smelters. Despite their professed commitment to identifying and assessing human rights violations, companies such as Glencore fail to provide detailed information to the public on steps they are taking to eradicate such risks, including, for example, by requiring their suppliers to report the source of the cobalt. Instead, they recognize that their model approach to human rights due diligence “is not consistently applied,” and that a risk of forced labor, modern slavery, human trafficking and other labor standards violations continues in their supply chains.
Because of the opacity of the cobalt supply chain, large tech companies argue that they have no way of knowing that the cobalt being supplied to them indeed came from a mine where human rights abuses occurred, and that they trust the intermediaries to ensure that the metals are human rights violations-free. Exacerbating the problem is the fact that cobalt is not on the list of official “conflict metals” subject to Section 1502 of the US Dodd-Frank Act that requires companies doing business in the US to conduct due diligence, and thus the cobalt mining sector is often overlooked in tech companies’ due diligence exercise.
However, given the prevalence of child labor and other human rights abuses in DRC cobalt mines, tech companies should know that there is a substantial risk that Congolese minerals are tainted by grave human harms. Tesla has even explicitly acknowledged the human rights risks of cobalt from the DRC, writing in its 2019 Impact Report that “[b]ecause Tesla recognizes the higher risks of human rights issues within cobalt supply chains, particularly for child labor in the [DRC], we have made a significant effort to establish processes to remove these risks from our supply chain.” However, the company does not explain how it does this, and their Human Rights And Conflict Minerals Policy does not encompass cobalt.
Although a number of avenues exist for seeking liability for human rights violations in US courts, including the Alien Tort Statute (ATS), the TVPRA provides for relief relating specifically to acts of forced labor. It is worth noting that unlike the ATS, which is generally not applied extraterritorially and which interprets aiding and abetting liability under international law stringently, the TVPRA generally applies to acts committed outside of the US, and includes a way to hold liable those merely benefitting from trafficking activity, even if they do not directly engage in it. For the purposes of this blog, the existence of the underlying crime of forced labor under the TVPRA will be assumed. This blog focuses on how remote actors, in this case tech companies who use cobalt in their products, may be legally responsible for their involvement in the cobalt supply chain that relies in part on forced labor. In particular, it looks at civil liability under § 1595 of the TVPRA, which because of its constructive knowledge standard might provide a greater avenue for relief than criminal liability under the TVPRA.
Participation in a Venture
TVPRA § 1589 criminalizes forced labor, including “knowingly benefit[ing], financially or by receiving anything of value, from participation in a venture which has engaged in the providing or obtaining of [forced labor]”. Although neither “participation” nor “venture” are defined in § 1589, another provision in the TVPRA on sex trafficking of children defines “participation in a venture” as “knowingly assisting, supporting, or facilitating a violation” and a “venture” as “any group of two or more individuals associated in fact, whether or not a legal entity.” Courts have observed that in order to be part of a venture within the meaning of the TVRPA, “more than receipt of a passive benefit” is needed, and the defendant must commit some “overt act” in furtherance of the “criminal ‘aspect of the venture’”. However, the overt act need not be participation in the forced labor itself.
For example, in Ratha v. Phattana Seafood Co., a case relating to forced labor allegations in Thai seafood factories, the claims against a joint venture set up to sell the seafood in the United States and a Thai corporation that was a member of the joint venture were dismissed because the plaintiffs failed to show that the companies “took some action to operate or manage” a human trafficking venture, and instead were merely purchasers of the seafood. Similarly, in BM v. Wyndham Hotels and Resorts, the defendant hotel brands, which franchised the branded property at which the plaintiff was trafficked, were not considered to be part of a venture with the victim’s traffickers, because the plaintiff failed to demonstrate that the hotel brands actually participated in the trafficking, or that any direct links between the victim and the brand existed; while the facilities where the trafficking occurred (and which were not named in the lawsuit) may have been part of the venture, the brands under which these facilities operated were not.
Based on this jurisprudence, it seems at first glance difficult to argue that corporations that purchase cobalt are part of a venture with those directly responsible for child and forced labor in the mines, given the lack of direct links between tech companies and the child laborers. As the court in Ratha noted, the mere act of purchasing is not enough to be part of a human trafficking venture. However, the IRA lawsuit makes several points in its amended complaint that are worth considering. First, the plaintiffs argue that, despite knowing that cobalt mines are rife with human rights abuses, tech companies failed to take any meaningful action to address the harms, and instead supported the expansion of a “hidden and secretive” supply chain. They argue that this was a deliberate strategy, employed to ensure that the tech companies would have access to a cheap and steady supply of cobalt. Furthermore, the plaintiffs estimate that the tech defendants named in the suit control up to 85% of the supply chain (along with their business partners), and that they “have more than sufficient control to implement any necessary changes to stop the horrific abuses of child miners.” Indeed, the recent Tesla-Glencore deal is an example of how much tech companies not only rely on Congolese cobalt, but are also important buyers without whom the cobalt industry would not be as lucrative.
Does the purchasing of cobalt from intermediary smelters and/or component manufacturers constitute an act of “assistance, support, or facilitation” of child labor? This blog argues that it should in the context of cobalt mining, if it can be shown that the companies have some sort of interest in maintaining the practice of using child labor, and were able to exert leverage over the supply chain to change it if they had wanted to. Indeed, unlike in Wyndham Hotels and Resorts, in which the revenue generated from the hotel rooms rented to the victim’s traffickers was presumably too small to conclude that the brand had an interest in the perpetuation of trafficking at its properties, tech companies purchase most of the world’s cobalt, and thus the interests of cobalt mines and tech companies are by their very nature intimately intertwined.
However, difficulty arises when there is no affirmative duty by tech companies to take steps to address child labor in the mines. Even if the use of child labor were more desirable for them, because it allows them to benefit from a steady and cheap supply of cobalt, their failure to act is likely not enough to constitute an overt act in furtherance of the system of child labor. And while Principle 19 of the UN Guiding Principles on Business and Human Rights emphasizes that the leverage that companies are able to exert in business partners must be taken into account when determining the mitigatory action we expect from transnational corporations, the potential to exert leverage does not necessarily mean that a failure to do so results in legal liability. Thus, without a positive obligation to conduct due diligence and undertake measures to eliminate child labor, it is difficult to demonstrate that a defendant engaged in some sort of overt act (or omission) that would make them part of a forced labor venture, unless corporate statements or other evidence could be obtained to that effect.
Constructive Knowledge Standard
TVRPA § 1595 allows victims of trafficking to seek a civil remedy from a defendant who “knowingly benefits, financially or by receiving anything of value from participation in a venture which that person knew or should have known has engaged in [human trafficking].”
The “should have known” standard, which is not found in criminal provisions of the Act, means that the defendant is not required to have actual knowledge, as constructive knowledge suffices. The defendant must at least know or should know that the venture it is part of has engaged in human trafficking. For example, in Wyndham Hotels and Resorts, the court held that defendant franchisors to a hotel brand did not know that trafficking was occurring at its branded locations, because the plaintiffs failed to provide facts that demonstrated how anyone beyond hotel staff should have known about the alleged trafficking. Also, in Ratha, the court held that the defendants did not have knowledge that their seafood supplier engaged in forced labor practices, even though advocacy groups had publicly criticized the working conditions in the supplier’s factory, because “conflicting and sometime unsubstantiated general reports”, especially in the context of a factory which the defendants “did not own, operate, or have any control over”, were not sufficient to infer that the defendants should have known that trafficking existed at the factory. However, in Adhikari v. Daoud & Partners, the courts considered that the plaintiffs had adequately pled that the defendant allegedly knew forced labor was occurring because of statements made directly by victims to the defendant, in addition to “previously publicized complaints and incidents.”
Under the TVPRA, the defendant must also “knowingly benefit” from the trafficking venture, and courts have held that this, too, requires only constructive knowledge for civil remedies. For example, in Wyndham Hotels and Resorts, the plaintiffs overcame a motion to dismiss because they sufficiently alleged that the defendant hotels received royalties from the rooms rented out by its branded hotels in which the plaintiff was trafficked, despite the fact that the benefit was not derived directly from sex trafficking.
In the context of cobalt mining, the absence of any affirmative requirements on the tech companies to find out the original source of the cobalt means that their constructive knowledge that forced labor might have been involved is difficult to establish, because there is not affirmative duty on them to seek information about the source of the metals. Indeed, even robust international standards such as those indicated in the OECD Guidance do not expect downstream purchasers of cobalt to conduct a thorough due diligence of the mines. Instead, the expectation is that they rely on intermediary smelters to assure that no human rights abuses occurred in the supply chain.
However, given the prevalence of human rights abuses in the DRC, one can reasonably conclude that tech companies purchasing cobalt from the DRC should know that they are at least at risk of receiving material extracted by child laborers. Moreover, because metals from a number of sources are smelted together, including from artisanal mines with endemic human rights abuses, it would not be unreasonable to expect tech companies to assume that at least some of the cobalt is tainted by child labor. Indeed, it is clear from their public statements that they are aware of the risks.
That being said, is the general knowledge of a risk enough, or must the knowledge be more specific? The holding in Wyndham Hotels and Resorts, that the franchisor brands did not know that trafficking was occurring at its branded locations, suggests that the knowledge must reach a certain level of specificity. In that case, the plaintiffs argued that the defendants knew that sex trafficking occurred at its branded hotels throughout the country, but failed to show how the defendants should have known about trafficking at that specific location. However, it could be argued that unlike in the hotel industry, in which only a small percentage of their business is being used to further criminal sex trafficking, incidents of human rights violations—including child labor—are pervasive in the artisanal cobalt mines. Furthermore, to require a more specific degree of knowledge in the context of cobalt is impracticable, because of the way the smelting process muddies the supply chain.
Grave human rights abuses committed in relation to business activity will arguably only cease when those who hold the most leverage over the process genuinely commit to eradicating them. In the context of cobalt mining, those companies overwhelmingly belong to the tech industry. They are not only globally powerful, but also the primary purchasers of cobalt. In addition to mandatory due diligence laws (which some countries are already developing), the risk of legal challenges may form an incentive for tech companies to be more proactive about preventing human rights abuses in their supply chains.
However, even when applying broad liability constructions, such as those found in the TVPRA, establishing legal liability is not straightforward. Because there are multiple intermediaries between the mines and tech corporations, the existence of a venture is difficult to prove. Furthermore, the smelting process interrupts the “knowledge-chain” when it becomes difficult to prove precisely where the cobalt originated. That being said, US federal courts should take into account how the most powerful actors along the supply chain exert enough influence over their business partners to sway behavior up the supply chain, and rule accordingly. Finally, explicit due diligence obligation for purchasers of cobalt will not only hopefully encourage better practices in the mines, but will aid victims seeking redress for the violations they endure.
 18 USC 1989(b).
 Ratha v. Phattana Seafood Co. Ltd., 2017 WL 8293174 (2017) at *4, quoting US v Afyare, 623 Fed. App’x 272, 286 (6th Cir. 2016); see also BM v Wyndham Hotels and Resorts, Inc., 2020 WL 4368214 (2020) at *3.
 BM v Wyndham Hotels and Resorts, Inc., 2020 WL 4368214 (2020) at *4.
 Ratha v. Phattana Seafood Co. Ltd., 2017 WL 8293174 (2017) at *4.
 BM v Wyndham Hotels and Resorts, 2020 WL 4368214 (2020) at *6.
 18 USC 1589(a).
 BM v Wyndham Hotels and Resorts, Inc., 2020 WL 4368214 (2020) at *4.
 BM v Wyndham Hotels and Resorts, 2020 WL 4368214 (2020) at *6.
 Ratha v. Phattana Seafood Co. Ltd., 2017 WL 8293174 (2017) at *5.
 Adhikari v. Daoud & Partners, 697 F.Supp. 2d 674, 684 (S.D. Texas 2009).
 See BM v Wyndham Hotels and Resorts, Inc., 2020 WL 4368214 (2020) at *4.
 BM v Wyndham Hotels and Resorts, Inc., 2020 WL 4368214 (2020) at *4.
 BM v Wyndham Hotels and Resorts, Inc., 2020 WL 4368214 (2020) at *2.