10/30/2019 Unraveling the Secret Supply Chain Behind an AmazonBasics Battery

Illustration: Kelsey Niziolek

Unraveling the Secret Supply Chain

Behind an AmazonBasics Battery
One of Amazon’s smallest and most popular products has a
surprisingly large footprint

Sarah Emerson
Oct 30 · 12 min read

heard the “pop!” from my living room as a brand-new pack of Amazon

batteries spontaneously exploded on the kitchen counter, oozing a gritty
black substance in fits and spurts. The small, unassuming item is one of
Amazon’s most popular “in-house” products sold under the AmazonBasics label. With
nearly 20,000 customer reviews, its popularity dwarfs that of most other AmazonBasics
items, which include electronics, homewares, and random odds and ends.

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The batteries are also highly rated — had I received a defective set? I scoured the
comments page for the alkaline battery for reviews containing the word “explode,”
revealing dozens of experiences like mine. One person said the batteries had burst in
their wife’s breast pump. Others had toys and appliances ruined by leaky fluid. Some
customers blamed this on alleged Chinese manufacturing, but Amazon vaguely claims
in the product’s description that they are “made in Indonesia using Japanese
technology.”

Over the past month, I have tried to uncover the hidden life cycle of this simple
AmazonBasics battery. Amazon is fiercely secretive about its corporate footprint and
masks its operations through a discrete network of outsourcing, making its supply
chain hard to unravel. Its AA battery is no different. The product is indeed made in
Indonesia, but not by Amazon, I learned. The company buys the batteries from a
supplier and reskins them as its own, much like Trader Joe’s and its eponymous food
brand. Amazon has never voluntarily divulged the sources of AmazonBasics items, but
it confirmed OneZero’s reporting on where its AA batteries come from.

Faster, cheaper delivery always comes at a cost — to

humans and the environment.
Though I discovered where the batteries were made, I was unable to locate the source
of their materials, for example. The difficulty in understanding the supply chain of
even a simple component shows how Amazon’s operations are deliberately designed to
be a black box. This secrecy allows the commercial titan to be ruthlessly competitive,
delivering cheaper items faster than rival stores. But it also makes it harder for
consumers who wonder whether their purchases are ethically or sustainably sourced to
even begin finding answers. Beyond obscuring why merchandise might be defective —
or explosive, in my case — it hinders those of us who just want to know: Where does it
all begin?

. . .

here’s a plain white building in West Java, Indonesia, where workers

meticulously assemble batteries for Fujitsu, a Tokyo-based technology
company and covert supplier for AmazonBasics. Unlike Amazon’s

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distribution centers, which are emblazoned with its black-and-orange logo, nothing
outwardly betrays that a popular AmazonBasics item is made here.

Technically, Fujitsu’s subsidiary FDK runs the alkaline factory. You’ll find it in the West
Javanese city of Bekasi, one of Indonesia’s liveliest industrial centers. I decided to call
the subsidiary after stumbling across a review for the AmazonBasics batteries that
mentioned, without elaborating, that they appeared to be “manufactured by Fujitsu.”

An FDK employee confirmed to OneZero that AmazonBasics is an authorized

distributor of its batteries and per their agreement is required to buy at least $100,000
of its product annually.

Amazon later confirmed to OneZero that FDK is one of the companies that works with
AmazonBasics.

The Fujitsu building in West Java, Indonesia. Photo: Google Maps

Fujitsu is one of the world’s oldest information technology companies, founded in 1935
in prewar Japan, with its roots in one of the country’s industrial zaibatsu, or family-
owned business monopolies. The company went on to create Japan’s first homegrown
computer and today boasts a global retail empire of hardware, software, and personal
gadgets. In 1989, FDK expanded into Indonesia as FDK-Intercallin, eventually opening

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a production plant there — becoming the sole maker of Fujitsu alkaline batteries
outside of Japan.

According to historians, Japan is revered for perfecting the modern battery’s secret
sauce: a finicky black powder called electrolytic manganese dioxide that helps to cycle
energy through the device.

“The Japanese were early in figuring out how to manufacture electrolytic manganese
dioxide,” said Jay Turner, a professor of environmental studies at Wellesley College.
The product had always required pristine manganese dioxide, a compound that was
difficult to mine without impurities. “But around World War II, they figured out how to
manufacture a pure form of it that’s better than the natural stuff.”

All the experts OneZero spoke to said that Indonesia, a nation of 264 million people, is
not a huge player in the battery industry, which has long been dominated by countries
like China, Japan, and Korea. Amazon’s investment in a Southeast Asian market,
therefore, is peculiar.

“If anything, Amazon should have greater control

over its AmazonBasics supply chain… The fact that
they haven’t been doing this for so long is kind of
suspicious.”
FDK declined to comment on the conditions of its Indonesian factory. Lax
environmental standards may be one explanation for the factory’s location. Other
factories in Bekasi are responsible for carcinogenic air pollutants and putrid river
waste. Fujitsu’s sustainability report shows that its Indonesian operations are the
dirtiest, ranking the highest on greenhouse gas emissions, water usage, and waste. In
2016, its Bekasi site produced 16 times the amount of waste as Fujitsu’s next-worst
emitter, Fuchi Electronics in Taiwan.

“On the Indonesian regulation front, I would say if anything it’s limited or not well-
enforced, so the risks are low [for a company like Fujitsu],” said Alexis Bateman,
director of the Massachusetts Institute of Technology Sustainable Supply Chains
project, which aims to empower businesses to adopt sustainable development
strategies through research.
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Indonesia has another quality that’s a boon to battery makers: its deposits of precious
natural resources.

Fujitsu declined to comment on the source of its battery materials and whether it’s
tapping into Indonesia’s rich manganese supply. There is zero publicly available data
on where the company gets its materials, save for an agreement that says it will not buy
conflict minerals (tantalum, tin, gold, tungsten, and cobalt) from suppliers that fund
human rights abuses. But battery analysts say that companies such as Tesla and Apple,
which require batteries of a very different kind, may be looking to Indonesia as
resource stockpiles begin to peter out. Tesla is notably in talks to build a battery factory
in Central Sulawesi; meanwhile, the Indonesian government is enforcing an export ban
on nickel and copper, possibly to bolster its own battery operations.

Thanks to a product sheet, however, we know that Fujitsu’s battery is made using
manganese dioxide, graphite, zinc, and potassium hydroxide. It also likely contains
paper, nylon, PVC, and steel. It’s unclear what, if any, percentage of these materials are
recycled or recyclable.

“The materials aren’t toxic, they don’t pose a significant threat to human health, and
they’re not that heavily regulated,” Turner said. “The alkaline is basically refined dirt in
a cylinder.”

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But their production isn’t so benign. Manganese is linked to human rights abuses,
occupational safety violations, and child labor, according to RCS Global, a social
responsibility consulting firm. Seventy-six percent of manganese comes from South
Africa, China, Australia, and Gabon, RCS Global notes, but there is “virtually no
comprehensive traceability” along the supply chain. In other words, while there’s a
significant chance that manganese may have been mined in abusive conditions, it’s
difficult to pinpoint if a specific company is benefitting, because the mineral is filtered
through a number of intermediaries. (The same is true of other minerals.)

Basically nothing is being done to address the risks of manganese production, says the
Responsible Sourcing Network, a nonprofit that focuses on human rights abuses in
labor. Zinc mining has also been found to release harmful emissions into the air, such
as sulfur dioxide, which can be toxic to human health.

“At Amazon, we are strongly committed to ensuring that the products and services we
provide are produced in a way that respects human rights and the environment and
protects the fundamental dignity of workers,” an Amazon spokesperson told OneZero.
“We engage with suppliers that are committed to these same principles, and we set
exacting standards for suppliers of goods and services for Amazon and Amazon’s
subsidiaries.”

. . .

he battery becomes less trackable the further it progresses down the chain.
This is overwhelmingly due to U.S. shipping rules that allow companies to
move product virtually in secret. And as Amazon expands into all modes of
transport — cars, trucks, air and ocean freight — its logistics will likely become even
more invisible.

“Amazon is big not because it’s offering new things, but because of its command of
logistics,” said Jean-Paul Rodrigue, a professor at Hofstra University who studies
transportation, logistics, and freight distribution. “Commercial shipments are subject
to private contracts, and Amazon is under no obligation to reveal this information to
anyone. Only a ship’s manifest would, for customs purposes,” he added.
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In 2015, the Greek container ship COSCO Beijing left Jakarta, Indonesia, with 410
pallets of AmazonBasics alkaline batteries. The product filled four cargo containers and
was dispatched by PT FDK Indonesia out of Bekasi, with Amazon Fulfillment Service
listed as the consignee (or seller). The ship briefly stopped in Malaysia and Singapore
before crossing the Pacific to the Port of Long Beach, California, and then on to Seattle,
Washington, where its cargo was unloaded and taken to an unknown destination.

This is according to the shipment’s bill of lading, acquired by Panjiva, a supply chain
research unit at S&P Global Market Intelligence that purchases commercial shipping
data from the U.S. Customs and Border Protection to provide global import and export
insights for its customers. The 2015 shipment was the only one that Panjiva could find,
possibly because Amazon conceals most of its shipping documents, but one had fallen
through the cracks.

The next leg of the battery’s journey, from its warehouse to your doorstep, is more
speculative. On the particular box that I purchased, small letters say “imported by
importer” in Spanish, above the address for Amazon’s facility in Mexico City. Below
that, in German, an address for Amazon’s Luxembourg facility is also given.

Amazon operates 75 fulfillment centers and 25 sortation centers across North America
— a footprint so large that there’s an Amazon warehouse within 20 miles of half the
U.S. population, according to Curbed. Globally, Amazon has more than 175 operational
fulfillment centers. The company also dispatches an estimated 48% of its own packages
through its last-mile delivery service, Amazon Logistics. But unlike UPS or FedEx,
which offer detailed tracking information, Amazon Logistics scrubs any data that
precedes an item’s arrival at an Amazon site. For example, when I ordered a box of
AmazonBasics batteries, my tracking number began with “TBA,” denoting that it was
delivered via Amazon Logistics, and only went as far back as its departure from an
Amazon warehouse in Newark, California. Amazon acknowledged but would not
explain why tracking is assigned only after a product has left a fulfillment center.

Faster, cheaper delivery always comes at a cost—to humans and the environment.
Amazon has been accused of underpaying, surveilling, and overworking the people
that it contracts as drivers. In August, a BuzzFeed News report exposed the fatal
conditions that Amazon creates for its next-day delivery drivers, resulting in
consequences for which Amazon refuses to take responsibility. Its delivery emissions
are also shocking; according to one estimate, Amazon shipments produced 19 million
metric tons of carbon in 2017, or the equivalent of nearly five coal power plants.

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. . .

onsumers are most intimate with the end of a battery’s life cycle — its use
and eventual disposal. These are the phases that environmentalists are also
most preoccupied with as electronic waste becomes a (literal) growing
concern in our technological era.

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The AA battery accounts for nearly half of AmazonBasics’s battery sales, capturing 46%
of those online purchases, according to data provided to OneZero by 1010data, a
company that provides consumer transaction insights. One dollar out of $10 spent on
AmazonBasics is spent on batteries, and the AA alkaline battery accounts for roughly
4% of the label’s overall sales. This has put AmazonBasics at the top of the online AA
battery market, above familiar brands like Energizer and Panasonic.

“Amazon’s ability to aggressively market its in-house battery brand has helped it
become the leader in online household battery sales, but national brands like Energizer
and Duracell are competing aggressively to maintain their share,” said Matt Pace,
senior director at 1010data.

Despite the battery’s widespread use, some experts say its environmental impacts are
insidious and vastly underestimated. “The greatest burden lies far upstream of the
manufacturing facility itself,” in the extraction of raw materials, researchers at MIT’s
Department of Materials Science and Engineering wrote in a 2011 study on the life
cycle of alkaline batteries.

“Of the phases… directly within control of the battery manufacturing industry, the
manufacturing facility has the largest impact [through electricity use],” the study
noted. U.S. battery production sources the bulk of its energy from fossil fuels, it adds,
with renewables accounting for just a fraction of these power needs. Together, sourcing
and processing add up to 88% of a single-use battery’s environmental impact.

Using the MIT study’s data, Turner co-authored a 2015 paper published in the Journal
of Industrial Ecology, estimating that “it takes more than 100 times the energy to
manufacture an alkaline battery than is available during its use phase.” And when the
entirety of a battery’s emissions are added up — including sourcing, production, and
shipping — its greenhouse gas emissions are 30 times that of the average coal-fired
power plant, per watt.

All of which is to say: An appliance powered by an alkaline battery consumes more

carbon than an appliance that’s plugged into an electrical outlet, according to the
study.

Still, conversations about the environmental footprint of batteries largely revolve

around end-of-life disposal, recycling, and “upcycling.” Most states allow people to
throw their spent batteries in the trash in lieu of voluntary or mandatory collection
programs. (California is the exception, considering all batteries to be hazardous waste,
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though the state offers only vague guidelines on what to do with them.) But while
batteries are one of the largest sources of heavy metals in waste streams, there is no
broad U.S. policy that classifies various battery types as toxic or nontoxic or that
dictates their disposal. Regarding the alkaline battery, policymakers currently disagree
on whether it’s harmful when landfilled, the MIT study notes.

“The problem is they’re really small and really distributed, so to collect and recycle
them takes a lot of energy,” Turner said. “By the time you’ve done this, you’ve used
more energy than you’ve saved in the process.”

Fujitsu says consumers can decrease waste by replacing portable batteries with its
“long-lasting” alkaline or rechargeable batteries. Though Amazon claims to be working
toward closing its own waste loop, it appears to be doing less than other prominent
battery sellers to incentivize recycling. Only its rechargeable batteries contain recycling
information, but Amazon says it may soon include this information for its disposable
batteries as well.

The impact of an Amazon battery may seem inconsequential when compared to the
company’s fossil fuel alliances, labor abuses, and billions of dollars in military
contracts, but it matters at a time when Amazon claims to be doing better on climate
change. In September, CEO Jeff Bezos announced an ambitious “Climate Pledge” after
several thousand Amazon employees demanded the company adopt a climate action
plan. The commitment is a big one, putting Amazon on a track to reach net zero
emissions by 2040 and relying solely on renewable energy company-wide by 2030. But
hidden in the pledge is the fact that Amazon has only just begun to track its carbon
footprint, a whopping 44.4 million metric tons in 2018, nearly equivalent to the output
of Switzerland or Denmark. The company says this equation includes production —
and Amazon told OneZero that it calculates its footprint in accordance with industry
standards, and that private-label items are accounted for — but its reporting is overly
generalized, combining things as disparate as “business travel” and “Amazon-branded
product manufacturing” together under “emissions from indirect sources.” By merging
these emissions, Amazon is hiding what portion of that number originates downstream
from outsourced manufacturing.

“If anything, Amazon should have greater control over its AmazonBasics supply chain,”
Bateman said. “The fact that they haven’t been doing this for so long is kind of
suspicious. It’s not like they’re a new company.”

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. . .

never discovered why my AmazonBasics batteries exploded. An Amazon

spokesperson said the company had once investigated the problem, even
bringing in a third-party testing lab to inspect the product’s design. “We
thoroughly investigate any and all concerns of this nature to ensure the safety of our
products,” the spokesperson told me. My unused pack now sits in a cupboard,
collecting dust because I don’t know how to recycle it.

The complexity of Amazon’s battery is concealed by its everyday utility — ping-ponging

across the globe in relative secret, which is how Amazon wants it to remain, and how it
likely will.

“Why should Amazon reveal its supply chains to its competitors?” Rodrigue asked.
“Their supply chain is their advantage.”

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