Much of the problem has to do with hard-to-get, hard-to-trace minerals. Businessweek reports.
Last year, the Securities and Exchange Commission ruled that U.S. companies must begin reporting the origins of their minerals -- as well as the refineries and smelters used to process them -- by May 2014.
At least one company is seeking incremental gains. Last week, a Dutch startup called Fairphone unveiled what's being heralded as “the world’s first ethically-sourced smartphone.”
That’s supposed to mean the company’s supply chains won’t end up using, say, criminal gangs in poor countries or employers of improper child labor. But the handset is nowhere close to 100 percent ethically sourced.
“That would be nearly impossible,” says Fairphone's Bibi Bleekemolen.
At least 30 minerals go into the production chain: copper, cobalt, tin, tungsten, tantalum, to name a few. And each of the hundreds of components attached to the printed circuit board have their own suppliers and sub-suppliers.
What’s more, minerals found in smartphones often come from conflict zones, most notably the Democratic Republic of Congo, where many mines are controlled by warlords and armed groups that use the profits to bankroll the country’s brutal, ongoing battles.
The country holds about 40 percent of the world’s tin.
Fairphones are produced in a factory in China, where the startup -- which essentially crowdsourced its funding -- has set up a fund to ensure fair living wages and good working conditions.
By partnering with NGOs that track supply chains, the company has managed to ethically source only tin and tantalum for the current prototype. And technically, those two are only conflict-free: rebel groups don’t have access to profits, but they're not necessarily produced with fair labor practices.
There're already over 15,000 orders for Fairphones, which sells for $440 and are designed to be less energy-hungry and more easily recyclable than current smartphones.
They’re also in talks with mobile carriers such as Vodafone and Dutch group KPN, which ordered 1,000. The hope, Bleekemolen says, is to change the industry from within and make supply chains more transparent, so other companies can more easily identify and use ethically-sourced minerals.