The Responsible Sourcing Blockchain Network (RSBN), a blockchain network committed to strengthening human rights and environmental protection in mineral supply chains, has added Volvo as a member. RSBN has also moved its digital supply chain for cobalt beyond the pilot phase. It is progressing toward live use production computing environments from spring 2020.
“We have always been committed to an ethical supply chain for our raw materials,” said Martina Buchhauser, head of procurement at Volvo Cars.
“With blockchain technology we can take the next step in ensuring full traceability of our supply chain and minimising any related risks, in close collaboration with our suppliers.”
The RSBN has participation from founding members to assure the quality sourcing for cobalt. These members include:
- Ford Motor Company
- Volkswagen Group
- LG Chem
- Huayou Cobalt.
Starting immediately, Volvo Cars joins the RSBN as its newest member – with the expectation that:
- further partners from the auto, tech and mining sectors will join later
- involvement will move beyond tracing cobalt into other key battery metals like tungsten, tantalum, tin and gold.
RSBN, with its participants, is building what it describes as: “an open, industrywide blockchain platform to trace responsibly produced minerals from source through to end product”. A key player is RCS Global which has the responsibility for assessing each participating entity against responsible sourcing requirements set by the Organization for Economic Cooperation and Development (OECD) and other industry bodies.
“We are setting in motion a process of mainstreaming responsible sourcing practices across major industries,” said Dr Nicholas Garrett, CEO of RCS Global Group. “We’ve reached significant new milestones as we’ve moved beyond testing, proving the merits of this coupled technology and assurance model can extend to a wide range of participants across every tier of the supply chain and to other minerals. The early addition of Volkswagen Group and now Volvo Cars to this collaboration confirms that blockchain technology together with responsible sourcing assurance can help address critical sustainability issues impacting the entire industry.”
RSBN technology and pilot test phase
The RSBN platform is built on the IBM Blockchain Platform, and assured by RCS Global Group. A principle motivation is that this encourages cross-industry adoption. The solution is a network accessible to companies at every tier of the supply chain, and includes an onboarding assessment which verifies each members responsible sourcing practices. A governance board representing members is being formed to ensure the platform’s growth, functionality and adherence to good practice principles continues.
In initial testing, the RSBN blockchain demonstrated how cobalt produced at Huayou’s industrial mine site in the Democratic Republic of Congo (DRC) was traceable:
- first through a supply chain, to LG Chem’s cathode and battery plant in South Korea
- then on to its final destination, a Ford plant in the United States.
The RSBN platform captures an immutable audit trail. This delivers the data which provides the documentation for:
- the initial sourcing of ethical cobalt production
- its maintenance
- the ethical provenance, from mine to end manufacturer.
RCS Global Group builds on its supply chain mapping and auditing activities for global OEMs and key battery mineral supply chains. It has successfully assessed and validated each supply chain participant against:
- responsible sourcing standards developed by the OECD
- the good practice requirements of relevant industry organisations like the Responsible Minerals Initiative (RMI) Blockchain Guidelines.
Volvo, Volkswagen and Ford involvement
Volvo’s electrical vehicle (EV) involvement is ramping up in 2020 and 2021, with the arrival of its Polestar 2 and XC40 Recharge. Volvo Cars envisages its practical implementation starting in spring 2020. It will be the first company in the consortium to fully apply the RSBN solution to its LG Chem supply chain. It also plans to apply RSBN principles to other minerals found in its batteries, including nickel and lithium in the future.
In parallel, Volkswagen is working with its battery suppliers to address the need for supply chain due diligence. It is now aiming to increase its supply chain mapping and auditing activities within its battery mineral supply chains. As an extension of these activities, through the RSBN, and other initiatives, Volkswagen is adopting technology which:
- improves supply chain traceability and transparency
- connect this information with the sustainability performance of its supply chain partners.
In the same vein, Ford, launching to global its all-electric Mustang-inspired SUV in 2020, says the RSBN will become an important tool in its efforts to strengthen transparency and visibility into the Ford global mineral supply chain. Expanding this network beyond cobalt to other battery minerals will multiply the RBSN’s potential impact on:
- human rights protection
- labor practices.
“As a founding member of the network, we are pleased that the project is moving to an operational phase. This will further strengthen the human rights protection and responsible sourcing efforts in mineral supply chains. This becomes even more important as we start to launch our next generation of all-electric vehicles starting next year.” Lisa Drake, VP Global Purchasing and Powertrain Operations, Ford Motor Company
Enterprise Times: what does this mean
The initial focus on cobalt makes sense. However, the RSBN will acquire greater credibility of it is able to add expansion to include:
- other battery-relevant minerals, especially lithium and nickel
- common metals like tin, tantalum, tungsten and gold (also known as 3TG).
Ethical sourcing has the potential to have a significant role when considering sales, especially EV sales. Potential customers for the largest change in automobile manufacturing might turn away if stories come to light about unethical key minerals inclusion in products.
Conversely, if the RSBN works as intended, it might offer the very reassurance which attracts buyers to EVs. In this context, blockchain can be seen as an enabler.