Elm attended this week’s EICC Extractives Supply Chain Workshop VI on conflict minerals, where approximately 200 attendees were present from industry associations, manufacturers from a range of industries, retailers, law firms, the OECD and representatives of several Central African organizations in the minerals trade.
It is Elm’s opinion that a clear rift exists between policy development/governmental organizations and the companies who are expected to implement conflict minerals traceability programs. Elm observed the following points being voiced most frequently in open discussions with panelists and in “hallway discussions” between attendees:
- Governmental and quasi-governmental organizations are almost universally pointing to the recently finalized OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High-Risk Areas and the Supplement on Tin, Tantalum and Tungsten as THE answer to all traceability program needs. In contrast, many of the US companies present who have attempted to apply the Guidance consider the document unusable and unrealistic. The most common complaints: a major lack of actionable, specific implementation steps/detail and the uncertainty about how the Guidance will comply with SEC requirements.
- Similarly, a confusing array of new standards, initiatives, policies and documents are emerging from a range of industry groups, non-governmental and quasi-governmental organizations – almost all of which are seeking funding. Attendees questioned the value and cost to the affected companies and raised concern over possible conflict with SEC regulations and auditor standards. Also noted: practically every one of these emerging initiatives includes its own separate third party audit program.
- Impacted companies are highly concerned about the availability and confidentiality of supplier information. Specific examples brought forth: exposing potentially sensitive information including business/supplier relationships; the reality that few supply chain levels will be able to directly identify mines of origin in information-gathering questionnaires; and the unique information availability challenges of the scrap supply chain.
- Recognition that the gold supply chain is significantly different from that of the other conflict minerals and a unique – and far more complex – solution will be needed for reasonable traceability.
Fundamentally, US companies that are impacted by Section 1502(b) of the Dodd-Frank Act are seeking pragmatic implementation guidance/support that
- reduces the risk of non-compliance with the upcoming SEC regulations,
- maintains business confidentiality,
- supports conformance with customer requirements/contractual mandates, and
- is based on a framework of reasonable expectations.
Elm’s recently announced Self-Implemented Conflict Minerals Audit Preparation© tool (SICMAP℠) is available to support companies seeking such solutions. Feel free to contact us to learn more.