Prior to the November 1 closing of the reopened public comment period on SEC’s proposed conflict minerals regulations, several companies and individuals filed new or updated comments. Among the commenters are two organizations serving environmental, health and safety auditing practitioners.
The comments support (a) the use of Performance Audits as an appropriate audit standard for the Conflict Minerals Reports under SEC, and (b) appropriate auditor expertise and certification beyond ISO19011 for various audits within a conflict minerals management system.
The Auditing Roundtable is a professional organization dedicated to the development and professional practice of environmental, health, and safety (EHS) auditing. Founded in 1982, the Roundtable represents the voice of the profession with more than 800 members. The Roundtable’s comments can be read here.
The Board of Environmental Auditor Certification (BEAC) is an independent, nonprofit corporation established in 1997 to issue professional certifications relating to environmental, health, and safety auditing and other scientific fields. BEAC was originally created as a joint venture between the Institute of Internal Auditors (IIA) and The Auditing Roundtable. BEAC is a member of the Council of Engineering and Scientific Specialty Boards (CESB), a third-party accreditation board, and is recognized by the American Chemistry Council (ACC); the American Industrial Hygiene Association (AIHA); the American Society of Safety Engineers (ASSE); the Auditing Association of Canada (AAC) ; the Global Reporting Initiative (GRI); and the National Organization for Competency Assurance (NOCA). BEAC’s comments can be read here.
Posted in Auditing, conflict minerals, EHS, Governance, sustainability
Tagged audit, auditing, BEAC, coltan, compliance management, Conflict Minerals, Congo, corporate responsibility, csr, Dodd-Frank, DRC, environmental compliance, gold, HSE, internal audit, SEC, Securities and Exchange Commission, supply chain, sustainability, tantalum, tin, tungsten, wolframite
Last Friday, the US State Department issued its statement on conflict minerals supply chain traceability. Section 1502 of the Dodd-Frank Act requires that the State Department – in parallel with the SEC – provide guidance on due diligence activities to companies.
The Department stated that
… it is critical that companies begin now to perform meaningful due diligence with respect to conflict minerals. To this end, companies should begin immediately to structure their supply chain relationships in a responsible and productive manner to encourage legitimate, conflict-free trade, including conflict-free minerals sourced from the DRC and the Great Lakes region. Doing so will facilitate useful disclosures under Section 1502, as well as effective responses to any discovery of benefit to armed groups.
The Department specifically endorses the guidance issued by the Organization for Economic Cooperation and Development (OECD) and encourages companies to draw upon this guidance as they establish their due diligence practices. We encourage companies, whether or not they are subject to the Section 1502 disclosure requirement, that are within the supply chain of these minerals to exercise due diligence based on the OECD guidance and framework as a means of responding to requests from subject suppliers and customers.
Companies should no longer be in a “wait and see” mode. Basic planning, assessment and program development can – and should – begin now.
If nothing more, companies should evaluate whether the OECD Guidance is the appropriate reference point. As we pointed out in an earlier post, that guidance contains a number of pitfalls and auditor impairments that may deter its use by many companies.
Posted in Auditing, conflict minerals, EHS, Governance, HSE, Risk, risk management, sustainability
Tagged audit, coltan, compliance management, Conflict Minerals, Congo, corporate responsibility, Dodd-Frank, DRC, environmental compliance, gold, HSE, internal controls, OECD, SEC, Securities and Exchange Commission, supply chain, sustainability, tantalum, tin, traceability, tungsten, wolframite
It is not uncommon for EHS auditors to be asked (or ask themselves) “If you find a noncompliance during your audit, do you report it to the regulators?”
The answer depends on the company and audit program, but a recent news item caught our attention due to a variation on the theme.
We have no information other than what is publicly available here, but it appears that an organization managing a voluntary electronic waste management certification program found alleged significant non-conformities at a specific company seeking certification. As a result, the organization declined to issue its certification to that company.
So far, so good, but the story doesn’t end there…
In its declination letter to the company, the organization states:
Further, there is substantial reason to believe that such exports may violate Public Act 095-0959 (Electronic Products Recycling and Reuse Act, recycler requirements) of the State of Illinois, the Federal CRT Rule, (40 CFR Parts 9, 260, 261, 271; Cathode Ray Tubes; Final Rule) as well as the waste importation laws of Hong Kong/China. Further, while it is not our policy to disclose the results of certifying body audits, we can state that the audit only further substantiated all of our concerns.
In an apparent contradiction to the “policy” referred to in the above statement, the organization’s cc’d “Selected news media”, the Illinois State Environmental Protection Agency and the US Environmental Protection Agency Enforcement on its letter, which can be seen below the signature block.
It is certainly possible that the company themselves had made prior disclosure to the regulators on this issue. But this event may cause companies pursuing voluntary programs/certifications to carefully consider how the company and auditor will manage regulatory non-compliances that are found or alleged in the course of related audit activities.
UPDATE: Reports today indicate that the company is taking legal action against the certifying organization stating that the allegations on which the organization based its decision – as well as its disclosure to the press and regulators – are false.
Posted in Auditing, Compliance, EHS, HSE, risk management
Tagged audit, auditing, compliance management, corporate responsibility, disclosure, e-waste, EHS, electronic waste, EMS, Environment, environmental compliance, environmental risk, internal controls, ISO, recycling, risk management
The Elm Consulting Group International LLC today announces a groundbreaking cost effective tool to support companies preparing for conflict minerals traceability audits or customer inquiries.
The delay in SEC’s final rule triggered many questions from companies about planning and pre-audit preparation. This led us to a solution that is valuable in almost any foreseeable final regulation scope/content and companies planning responses to customer inquiries – yet significantly reduces costs during this period of uncertainty.
Elm’s Self-Implemented Conflict Minerals Audit Preparation© (SICMAP℠) is conceptually similar to a self-audit checklist. SICMAP℠ is a spreadsheet tool that maximizes the use of internal company staff for cost reduction and implementation flexibility to develop and review conflict minerals programs in advance of third party auditing.
SICMAP℠ focuses on basic program elements equally relevant to companies responding to customer inquiries/procurement requirements and those working to comply with the upcoming SEC regulations on conflict minerals. Successive and more complex tasks – for both program development and audit preparation – are identified based on initial SICMAP℠ findings, lessons learned from working through the SICMAP℠ process, and the final regulatory requirements once they are known. The final rule, when published, will clarify the level of detail for some of the efforts.
Screenshots (which can be enlarged by clicking on them) show some of the features and functionality in SICMAP℠ include:
- “At a glance” color-coding indicates progress/status of both program development and audit preparation
- Live links to reference materials on the internet
- Summaries of language from the U.S. legislation (which will not be changed by SEC’s final regulations)
- Step-by-step pragmatic guidance on specific program elements
- Highlights of emerging international initiatives in comparison/contrast to SEC audit standards
Sample Page Showing Detailed Guidance
Topics covered in an intuitive and pragmatic way include:
- Initial scoping
- Reasonable assurance and representative sampling concepts reflecting SEC auditor standards
- Information management systems
- Internal controls
- Supply chain mapping
- Communications planning and content
- Scrap materials – special definitions and challenges in traceability efforts
- Considerations in selecting an auditor and preparing for the site visit
Summary Tracking Page With Color Coding. This image shows covered topic tabs along the bottom.
The tool is based on Elm’s experience as one of four firms worldwide that have completed conflict minerals traceability independent audits. Elm’s tantalum traceability audits in 2010 resulted in the first ever “Conflict-Free Smelter” designation*, covering sites in the US and Japan.
We continue to recommend that companies move forward with planning activities, but defer third party audits until planning is substantially complete and the SEC regulations are final. As with almost any new management program, a formal third party audit should be the last step of the implementation process – not the first.
SICMAP℠ will be commercially available beginning June 6, but feel free to contact us beforehand with questions.
* Issued by the industry association sponsoring the audits. The Conflict Free Smelter (CFS) program is emerging as the leading conflict minerals third party certification program for smelters by the electronics industry.
Posted in Auditing, conflict minerals, Governance, HSE, Risk, risk assessment, risk management, sustainability
Tagged audit, cassiterite, coltan, columbite, compliance management, Conflict Minerals, Congo, corporate responsibility, Dodd-Frank, DRC, Environment, environmental, environmental compliance, environmental risk, gold, HSE, internal audit, internal controls, SEC, Securities and Exchange Commission, supply chain, sustainability, tantalite, tantalum, tin, tungsten, wolframite
On Tuesday May 31, The Elm Consulting Group International LLC will formally announce a major development in our conflict minerals traceability services.
Lawrence Heim, Elm Director and leader of the firm’s conflict minerals services:
SEC’s delay in promulgating their final conflict minerals rule has resulted in a significant amount of uncertainty within affected companies. Many of these companies are challenged by cost constraints as they seek information, guidance and solutions to yet-unknown compliance standards. Our announcement next week provides a highly cost-effective solution in balancing these challenges.
If you would like to receive the announcement and related information directly, send an email to Lheim@elmgroup.com.
Posted in Auditing, conflict minerals, Governance, HSE, risk management, sustainability
Tagged audit, cassiterite, coltan, columbite, compliance management, Conflict Minerals, Congo, corporate responsibility, Dodd-Frank, DRC, EHS, Environment, environmental, environmental compliance, internal audit, internal controls, SEC, Securities and Exchange Commission, supply chain, sustainability, tantalite, tantalum, tin, traceability, tungsten, wolframite
The new issue of iPhoneLife magazine highlights Elm’s use of iPads for environmental, health and safety audits in a short feature.
Unfortunately, the article indicates we use them for energy audits, which is not the case. We have contacted the editor to inform them of their error.
Interestingly enough, the current issue also reviews various notetaking apps for anyone interested in reading up on the subject.
Posted in Auditing, EHS, Governance, H&S, Health & Safety, HSE, sustainability
Tagged compliance management, EHS, EHS Auditing, Environment, environmental, environmental compliance, Health & Safety, internal audit, iPad, risk management
Following a successful implementation of the iPad for HSE auditing, Elm is today rolling out environmental compliance audit protocol modules for field testing this week.
“We believe this is the first formal environmental audit protocol implemented in the iPad form factor,” said Lawrence Heim, Director of Elm’s Georgia operations and the firm’s lead for iPad service development.
The protocols are reflective of a traditional paper-based format proven in the field over a number of years. Modules selected for field testing are waste generation, Emergency Planning and Community Right-to-Know (“EPCRA”) and ozone depleting substances.
“In our view, this as a potentially dramatic step forward in HSE auditing. While version one does not automatically generate audit findings or reports, it has other significant strengths in addition to the benefits already seen by Elm from iPad implementation,” Heim said.
Elm highlights the following features:
- Flexibility. The protocol can be used in a manner matching auditors’ own personal styles in collecting audit data. Handwritten notes are captured in any format, including different “ink” colors, “highlighters”, and line weighting. While the initial protocol version is based on Elm’s standard audit process, other custom formats can be developed virtually without limitation.
- Adaptability. Elm’s iPad HSE protocol can be used alongside existing audit systems for initial data capture and organization prior to entering the information into less user friendly, highly structured audit systems. Also, the resulting PDF file can be attached into other HSE audit systems as supporting documentation.
- Merging related documents into the protocol. Documents such as state regulations, permits, plans, applications, agency correspondence and enforcement agreements can be incorporated into the protocol itself without effort of retyping, restructuring or reformatting. Once the appropriate document is merged, auditors are able to write notes and highlight text directly in the document. Further, by using a cellphone camera, additional documents can be captured and merged into the protocol in a few minutes while on-site.
- Languages. The iPad application in which the protocol was created can drastically reduce the need to translate audit protocols and related documents between languages. Audit documents are captured in their source format and original language, eliminating language translation costs/errors and allowing auditors to use their local language.
“We fully expect a successful test, with only minor changes to Version 1 being necessary. Additional environmental compliance modules are already in initial stages, awaiting our assessment of the field trials. Health and safety modules will be developed soon after,” Heim stated.
Posted in Auditing, Compliance, EHS, H&S, Health & Safety, HSE, Safety
Tagged audit, auditing, EHS, Environment, environmental, environmental compliance, EPA, H&S, HSE, internal audit, internal controls, iPad, OSHA, protocol, Safety
We recently announced our trial of and results from using an iPad for EHS auditing. These articles were intentionally short and provided summary information.
We were subsequently contacted by the Editor of EHS Journal to provide a more detailed article for their respected publication. That article is now available.
We invite you to read it.
Posted in Auditing, Compliance, EHS, H&S, Health & Safety, HSE, risk assessment
Tagged audit, auditing, compliance management, EHS, Environment, environmental, environmental compliance, environmental risk, health and safety, HSE, internal audit, iPad, risk management, Safety
The Elm Group International, LLC is accepting entries for a drawing to win an environmental compliance audit priced at $1.00 fixed rate for labor fees. The contest winner gets 5 consecutive days of one Elm staff member’s time to conduct an environmental compliance audit in the U.S – for $1.00 in labor cost. The rules and limitations (posted in the entry form) set forth the details of this offer.
Patrick Doyle, founder of Elm: “Elm has been financially successful ever since its founding in 2003. Even in the midst of the worst global economic collapse since the 1930s, Elm posted record revenues in 2009. In light of that, we wanted to have some fun in 2010. Part of that was investing in new technology such as the iPad, which proved to be very successful in the field. This give-away is another opportunity for us to have fun, while also providing real benefit to the winner.”
“There is a bit of a thrill in this for us,” said Lawrence Heim of Elm’s Georgia operations. “We certainly don’t know what type of company or site will win and I have no idea where I will be traveling to for this assignment.”
“I am not sure if anything like this has been done before. We had some initial trepidation about the idea, but our enthusiasm and excitement won over,” according to Robert Bray of Elm’s California operations, who just completed his tenure as the President of The Auditing Roundtable. “And we have the chance to help a company with their environmental management costs. Everyone wins.”
Click here to complete the entry form.
Posted in Auditing, Compliance, EHS, Environment, HSE, risk management
Tagged audit, auditing, compliance management, EHS, Environment, environmental, environmental audit, environmental compliance, HSE, internal audit, loss avoidance