The idea of “conflict-free” products is spreading. Originating in the role of mineral industries in Africa, it centers on the concept that some products are ethically questionable because their ingredients or inputs are sourced from areas facing armed conflict, thereby contributing to instability and war.
To date, the idea of conflict products has mostly been applied to select, high-profile conflicts, but this could change. Activists and governments are moving to increase consumer awareness of the issue, reduce the trade in such goods, and change business behaviors.
3 KEY FINDINGS
- The idea of “conflict products” has mostly been applied to select, high-profile conflicts, but this could change.
- The concept of conflict products is expanding from its origins in the mineral industry to other categories.
- A number of indicators can signal the possible future emergence of a new conflict-product issue.
3 POLITICAL ISSUES
Another reason that something may earn the “conflict product” label is that it is somehow tied to a particularly prominent political issue. Thus, the idea is beginning to be applied to the Israeli- Palestinian conflict:
- Territories under dispute between Palestinians and Israelis are increasingly being seen as zones of conflict. The Netherlands, which is considered one of the most pro-Israel European countries, has suggested to retailers that all Israeli products produced in the Israeli settlements within the Occupied Territories be labeled as such. This could impact a variety of products, including cosmetics made in the occupied West Bank and wine produced in the Golan Heights, which have to this point carried a “Made in Israel” label.
- South Africa is also going to ban the labeling of products made in Israeli settlements beyond the 1948 borders established by the UN as “Made in Israel.”
- The Israeli company SodaStream is being targeted by pro- Palestinian activists because one of its main production plants is in a settlement in the West Bank.
Similarly, Western companies helping to exploit Tibet’s mineral resources have come under criticism from Tibetan exiles and their allies, who say they are assisting Chinese exploitation of an occupied territory.
OTHER FACTORS: Inotability and Corruption
Stability measures can suggest where future conflict is likely to occur. High levels of corruption suggest where the rule of law is likely to be absent and conditions for workers may be abusive.
Stability is a key indicator of future conflict, and various indices are available to help judge it. The Center for International Development and Conflict Management, for instance, produces a ranking of stability for all of the world’s countries. The 10 least- stable countries in the Center’s 2012 report were: Afghanistan, Congo, Burundi, Guinea-Bissau, Djibouti, Ethiopia, Pakistan, Nigeria, Mali, and Sierra Leone.
Corruption is another potential indicator of questionable outcomes, when combined with conflict. It sets the stage for exploitative and dangerous conditions.
Transparency International produces an index of perceived corruption levels that is considered authoritative. The most corrupt countries in the 2012 rankings are: Somalia, North Korea, Afghanistan, Sudan, Myanmar, Uzbekistan, Turkmenistan, Iraq, Venezuela, Haiti, Chad, Burundi, Zimbabwe, Equatorial Guinea, and Libya.
3 BUSINESS IMPLICATIONS
- Rising global transparency will make conflict products a steadily growing issue. There will be very few corners of the world without mobile phones, Internet connections, and ties to émigré communities ready to publicize an issue such as this.
- As part of efforts to manage risk and reputation, manufacturers will need to carefully examine supply chains for active or potential conflict resources and components. Anything sourced from an unstable or disputed area may become such a product. Retailers will need to educate themselves on this issue and work with suppliers if they see areas in which they want to provide conflict-free shopping experiences.
- Companies might also identify key inputs that are vulnerable to disruption because of conflict-product issues, and plan for alternate sourcing, revised formulations, etc.