Big insurers fail to tackle abuses in cobalt mining
Dutch insurance companies continue to invest billions in cobalt mining despite it being rife with human rights abuses, according to a new report Time to start caring about cobalt from Fair Finance Guide Netherlands.
Demand for cobalt has soared as it is essential for the batteries used in our smart phones, computers and electric cars. But child labour, deadly working conditions and forced evictions are common.
Image above: Cobalt miners work in highly dangerous unregulated conditions.
FFG Netherlands found the nine largest insurance groups in the Netherlands (Achmea, Aegon, Allianz, ASR, CZ, Menzis, NN Group, VGZ and Vivat) are insufficiently committed to preventing or tackling serious human rights violations in the cobalt sector. Under authoritative UN guidelines, insurers must raise concerns about cobalt extraction with companies that use cobalt when investing in those companies. But in practice, insurers hardly do this. Collectively, the nine insurance companies invest at least € 12.8 billion in 23 of the largest manufacturers of products containing cobalt, including companies such as Apple, BMW, Daimler, Microsoft and Volkswagen.
Demand for Cobalt
Cobalt is an important raw material for batteries used in electric cars, computers and smartphones. Due to the green energy transition, demand for the mineral has rocketed. However, it’s extraction often involves large-scale and systematic human rights violations, such as highly unsafe working conditions, child labor and forced evictions at the mines.
Looking the other way
"Most insurers are aware of the issues surrounding cobalt extraction. They can be expected to make demands on how cobalt is extracted when investing in companies that use this metal. But they are only discussing this with a fraction of those companies," says Titus Bolten of Amnesty International on behalf of the Fair Insurance Guide Netherlands. "Investors can play a key role in building better cobalt practices. The insurers say they want to follow the international guidelines for companies, but then they really have to do much more than what they show now."
UN guidelines for companies on human rights
The Fair Insurance Guide's study also looked at the extent to which insurers comply with other aspects of the UN guidelines for companies (2011). In addition to entering into discussions with companies in which they invest, insurers must also communicate publicly about their efforts and the outcomes of those. "Only Achmea and CZ publicly communicate something about their commitment to the cobalt problem, but that does not mean much,” says Bolton “During our research, CZ, Achmea, Menzis, Vivat, NN Group and ASR did provide more insight into their efforts on cobalt issues. Allianz, VGZ and Aegon did not. "
CZ, Achmea, Menzis, NN Group and ASR endorsed a call from the international investment community ("PRI") to address the greatest risks in the cobalt sector. Vivat promised to sign this call within a year. Aegon, VGZ and Allianz did neither.
All insurers score poorly
In the survey conducted by the Fair Insurance Guide Netherlands, no insurer was scored as ‘satisfactory’ – scoring at least 6 of a total of 10 points. CZ is the best performing insurer with 4.98 points, followed by Achmea (4.68), Menzis (4.60), Vivat (4.12), NN Group (3.72) and ASR (3.34). Allianz (1.50) and VGZ (0.1) barely scored points and Aegon did not score any points at all (0.0).
The Fair Insurance Guide is a collaboration of Amnesty International, Milieudefensie, Oxfam Novib, PAX and World Animal Protection, and is part of the Fair Finance International network.
The practical study "Time to start caring about cobalt" was carried out by SOMO.
In 2016, Amnesty International published the report “This is what we die for”: Human rights abuses in the Democratic Republic of the Congo power the global trade in cobalt
In 2017 Amnesty International published the report “Time to Recharge”: Corporate action and inaction to tackle abuses in the cobalt supply chain
For more information, please contact Ruud Bosgraaf: email@example.com, 06 23341533.