Chinese Approaches to Overseas Responsible Business – Insights from the DRC Cobalt Industry

Click here to read a summary of the report. 

This research report aims to increase the knowledge of European business and policy makers regarding Chinese approaches to practicing business operations in overseas contexts responsibly. This is important, as China represents 52 percent of the total value of imports of products on which the EU is strategically dependent, and because the sourcing of some of these products, such as cobalt, is associated with serious problems related to responsible business. Increased knowledge is essential for drafting European strategies to improve responsible business practices in Chinese overseas supply chains, for which this report provides recommendations.

Part I of the report discusses the features of Chinese approaches to responsible business, predominantly defined in China as ‘corporate social responsibility’. In general, responsible business is a popular topic among Chinese actors. The Chinese government and many Chinese companies operating overseas attach importance to communicating about responsible business. However, compared to Europe, Chinese approaches focus relatively more on charitable activities and on topics that are less sensitive to China’s political system. Chinese responsible business approaches are shaped by two main factors: international interactions and the Chinese state.

Part II of the report investigates how the findings of Part I unfold in practice by analysing Chinese responsible business approaches in the cobalt mining sector of the Democratic Republic of Congo (DRC). This industry is dominated by Chinese companies and is crucial for the development of many green technologies. However, responsible business problems abound in the sector. As interviews and primary sources indicate, the Chinese state, through its embassy in the DRC and high-level interactions, plays an important role in shaping responsible business policies of Chinese companies on the ground. These policies reflect Chinese priorities, such as community development and upholding China’s national image, and adhere mainly to directives from Chinese state institutions.

At the same time, Chinese companies in the sector demonstrate awareness of international priorities regarding responsible business by increasingly addressing issues such as human rights and responsible sourcing, instead of solely focusing on community development. They are also keen to emphasise their adherence to international standards and cooperation with foreign auditors. Recent publications by Chinese state institutions indicate that this movement towards increased alignment with international practices is also increasingly supported by China’s government. Nonetheless, problems in the cobalt supply chain continue. These are not only China-specific, however, and are often rooted in the fragile political, social, and economic environment of the DRC. Solutions are to be found in increasing collaboration with industry-wide platforms on responsible business, and in further supporting the DRC to strengthen accountability and enforcement mechanisms.