Case Example

How companies in the UN Global Compact are taking action to advance corporate sustainability around the world.

LG Electronics and supply chain management in the Democratic Republic of Congo

Who are LG Electronics?

LG Electronics (LG) is a multinational electronics company, the flagship of LG Group, headquartered in Seoul, South Korea. LG Electronics has a presence in over 80 countries, manufacturing electronics and telecom products.

What was the challenge?

The Democratic Republic of the Congo (DRC) is a Central African country with vast mineral wealth, including reserves of cassiterite (tin), columbite-tantalite (a source of tantalum), wolframite (tungsten) and gold (known as 3TG). For many years, armed groups have financed their insurgency campaigns by smuggling minerals out of the DRC.

How was it addressed?

LG set out to ascertain the origin of the materials in its supply chain. LG does not directly source materials from the DRC and without careful due diligence cannot be certain that it is not indirectly financing conflict. LG explored the interaction between its core business and conflict dynamics, specifically the flow of funds through its supply chain to ensure that they are not supporting armed groups in DRC. LG is aiming to harmonize its conflict minerals reporting with the requirements of the SEC (although LG is not a listed company in the United States).

Suppliers must develop policies to prevent the use of conflict minerals or derivative metals sourced from mines controlled by armed groups. LG asks its suppliers to identify the smelters from which the metals are sourced. Identified smelters are asked to join the Conflict-Free Smelter (CFS) programme, requiring them to obtain certification. LG has also collaborated with the Korea Electronics Association to raise awareness of the issue among other industry participants, including the many tiers of suppliers.

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