Leading EHS Audit Organizations Comment to SEC on Conflict Minerals Regulations

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.

 

EHS Journal Article on Sustainability, Financial Valuation

Recently, Elm posted a piece discussing comments from Kevin Parker, the CEO of Deutsche Asset Management, an investment firm with three-fourths of US$1 trillion under management.

We expanded that original post for EHS Journal, who just published it.  The expanded version dives deeper into trends in the past decade supporting Parker’s assessment of why capital markets are bullish on carbon-intensive investment opportunities even in light of this era of sustainability.

View the article in its entirety here.

US State Department Issues Conflict Minerals Traceability Statement

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.

Elm Launches Groundbreaking Low Cost Conflict Minerals Audit Preparation Tool

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.

Elm’s iPad Auditing Featured in One of the World’s Most Visited Websites

Elm is featured in today’s issue of the on-line news source Mashable for our innovative use of the iPad for HSE auditing.  The article can be read here.

With a reported 30+ million monthly pageviews and an Alexa ranking under 250, Mashable ranks as one of the world’s largest websites. The website has a large following on many social networks.  As of February 2011, it has over 2 million Twitter followers and over 425,000 fans on Facebook.

Elm Hosts Webinar on Using the iPad in HSE Auditing

Join us for an upcoming webinar Friday, February 25 about using the iPad in HSE audits.  We will present an overview of our experiences in using the device on actual audits over the past 6 months.

Included in the presentation will be a discussion of

• evaluating its potential use and fit within organizations/existing audit processes;
• benefits and limitations; and
• a detailed step-by-step simulation of an audit using Elm’s selected application (smartNotes), including actual screen shots.

The hour-long presentation will be followed by an open question and answer period.

Click here for a full description.  There will be a morning session and an afternoon session.  Click here for the afternoon session.

We hope you can participate.

Leading Edge Information Technology to Support Elm’s Conflict Minerals Traceability Services

The Elm Consulting Group International LLC (Elm) earlier this week launched our Conflict Minerals Traceability Service in response to recent US legal and international economic policy developments concerning “Conflict Minerals”.  Conflict Minerals are defined by the United States’ Securities and Exchange Commission (SEC) and the international Organization for Economic Cooperation and Development (OECD) as tin, tantalum, tungsten, gold and the ores from which these materials originate.

Today, Elm announces an enhancement to the Conflict Minerals Traceability Service.  We will be leveraging cutting-edge information technology through our relationship with Sentiment360, a leading Internet data monitoring and analytics company.  Using Sentiment360, Elm’s unparalleled depth of information review – far beyond standard data reviews – may yield critical insight into conflict mineral provenance.

Lawrence Heim, Director at Elm: “As audit activities get closer to the mining and exportation of the ore, concern increases over the veracity of the information.  These concerns have been expressed by the SEC, OECD and by trade associations developing conflict minerals traceability programs.  The public and nongovernmental organizations (NGOs) also have similar apprehensions.”

“In discussions with Sentiment360 soon after Elm broadcast information about our Conflict Minerals Traceability Service, we concluded there is an excellent fit for Sentiment360 in these audits,” Heim continued.

Scott Marticke, Chief Operating Officer for Sentiment360:  “Lawrence reviewed with us the audit frameworks and associated information needs for these complex audits.  It became clear that Sentiment360’s proven real-time data mining and analysis technology addresses specific concerns from many stakeholders on data quality/validity related to mineral sources.  We are excited to be working with Elm on this global issue.”

Sentiment360 is based in Atlanta and provides real time analysis of information trends across global Internet social networks, forums, Blogs, news, video and image sites.   They have been engaged by Fortune 500 companies and US governmental agencies to scour online and internal documents and monitor/analyze online conversations.  Contact Scott Marticke, COO, at (404) 920-4687, or visit us on the web at http://www.sentiment360.com.

Now Available – Summary Review/Comparison of Conflict Mineral Supply Chain Traceability Audit Programs

Elm has developed a short summary review of conflict minerals audit programs based on our industry-leading first-hand experience conducting these audits, and leveraging our extensive international senior-level health, safety and environmental (HSE) auditing expertise.

If you are interested in receiving our summary document, please send us an email (lheim@elmgroup.com) or feel free to call us.  We look forward to hearing from you soon.

 

Joseph Cotier, CPEA joins The Elm Consulting Group International LLC

The Elm Consulting Group International LLC, a specialty health, safety, environmental and sustainability (HSES) management consulting firm, is pleased to announce the addition of Joseph B. Cotier, CPEA as a Director of the firm beginning January 3, 2011.

“Joe brings 22 years experience in HSE auditing excellence and client focus to our team” said Patrick Doyle, Elm’s founder and Managing Director.  “He is a perfect complement to the firm.”

“I have known Joe personally and professionally for close to 20 years and know first hand about his expertise and exemplary qualifications.  We are very excited to have him become a part of Elm” said Robert Bray, Elm Co-Founder and Managing Director.

Cotier said, “I am happy to be a part of Elm and look forward to continuing to have a positive impact on the HSE auditing field – driving innovation both in the US and across the globe.”

Joseph B. Cotier, CPEA, has completed more than 350 EHS audits and management systems consulting projects in more than 35 states and 20 countries.   He has experience in a wide range of industries including petroleum refining and chemical manufacturing, electric utilities, breweries and consumer and pharmaceutical products manufacturing. Mr. Cotier is an air emissions expert with particular strengths in emissions inventories, leak detection and repair, and a wide variety of MACT programs.  Joe his has performed inspections and managed compliance orders as a Senior Air Pollution Control Engineer for the Connecticut Department of Environmental Protection. He is a BEAC Certified Professional Environmental Auditor and recently completed his fifth year on the Board of Directors for The Auditing Roundtable, the leading professional association for HSE auditors.   He served as Secretary, Vice President and President, and now serves the Roundtable as Director on the Board.

Mr. Cotier will be working out of Glastonbury, Connecticut and can be reached at jcotier@elmgroup.com, +1-860-794-3617 (cell) or +1-860-430-1653 (office).

The Elm Consulting Group International LLC Launches iPad Environmental Audit Protocols

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.