Ethical Blockchain: Ford and IBM Team Up to Protect Workers

Ford Motors recently announced a blockchain pilot for IBM’s platform. The pilot will be used to verify that Ford’s cobalt sourcing does not support human rights abuses.

Huayou Cobalt, LG Chem and RCS Global have also signed on to use the fledgling blockchain technology, which will trace and validate ethically sourced minerals to ensure compliance with sourcing standards developed by the Organization for Economic Cooperation and Development.

The pilot has already begun and focuses on cobalt produced at Huayou’s industrial mine site in the Democratic Republic of Congo (DRC). Using blockchain, the cobalt is tracked along the supply chain – from Huayou’s mine to LG Chem’s smelter in South Korea, and then finally to a Ford plant in the U.S.

DRC is the largest cobalt producer in the world. The African nation mines about 60 percent of the global cobalt supply, but reports of human rights abuses plague the growing cobalt industry in the region.

These troubled reports from DRC’s mining industry come at a time when the cobalt market is booming. Cobalt is a key ingredient in Lithium Ion batteries, which are used for high-tech products like smartphones and electric cars.

As electric cars, laptops, and smartphones enter more markets at affordable prices, manufacturers around the world are vying for battery metals. The average electric car uses about 20 pounds of cobalt, creating a frenzy around a metal that once had little demand.

The traditional method of enforcing industry standards relies on third-party audits to verify compliance. Ford and IBM’s new pilot streamlines the process to create a secure network of validated parties, as well as immutable data that can be accessed by all network participants in real time.

This type of network would allow metal dealers to sell raw materials on a larger market, while enforcing humane working conditions as a prerequisite for membership.

The pilot is meant to function across industries, so the big idea here is to create a system that can function as a global marketplace for ethical, authenticated participants.

“We remain committed to transparency across our global supply chain,” said Lisa Drake, vice president, global purchasing and powertrain operations, Ford Motor Company. “By collaborating with other leading industries in this network, our intent is to use state-of-the-art technology to ensure materials produced for our vehicles will help meet our commitment to protecting human rights and the environment.”

Built on IBM Blockchain Platform and powered by the Linux Foundation’s Hyperledger Fabric, the pilot is expected to be completed by the middle of 2019.