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Transnational Governance of Sustainable Commodity Supply Chains

Due to their key role in the energy transition and digitalization, demand for metallic raw materials will continue to rise over the upcoming years. An electric car, for example, requires around six times the amount of metals as a conventional car. For this reason, the stability and resilience of supply chains is becoming ever more important. The vulnerability of commodity supply chains and the possibility of disruptions in the supply of raw materials are increasingly perceived as a security risk. Strategies to diversify supply chains, trading partners and the production of goods are therefore gaining attention.

As an industrial country, Germany is particularly dependent on raw material imports. In 2020, Germany imported metals worth €53.35 billion, a large percent of which came from outside of Europe. Raw materials thus ranked 6th among the top imported goods. That is why German policy can play an important role in shaping sustainable supply chains and promoting respect for human rights.

This research project focuses on the enforcement and implementation of voluntary and binding standards. In so doing, we are looking at the role of central actors such as companies, states and civil society in supply chain networks. By analysing the supply chains of copper from the Andean countries Peru and Chile and of platinum from two countries in southern Africa, Zimbabwe and South Africa, we seek to compare and contrast two supply chains under different contextual conditions. For example, China plays a central role in the copper trade, but hardly any in the platinum supply chain. This diversity enables both general and material- as well as country-specific results.

The project focuses on the following question: how can the German government and, in particular, German development policy implement standardised governance mechanisms in the raw materials sector? The aim is to analyse the potentials and risks along raw materials supply chains from a sustainability perspective. Based on this, we identify entry points for the sustainable design of commodity supply chains both by corporates and politics, for example in the form of multi-actor partnerships. The focus is on the various stages of the supply chain - from extraction to refining and processing.

The project cooperates closely with the Research Network Sustainable Global Supply Chains.

Duration: July 2020–June 2023

The project is funded by the Federal Ministry for Economic Cooperation and Development.

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