The Conflict Minerals regulation is intended to support the international efforts to reduce trading in minerals sourced from conflict zones (‘conflict minerals’). It primarily requires companies that buy products containing Tin, Tungsten, Tantalum or Gold (3TG) to report on the procurement source of these minerals, and this in turn affects the entire downward supply chain.
In 2010, the US Congress passed the ‘Dodd-Frank Act’, with rules requiring SEC-listed companies to disclose whether they use conflict minerals in their products. They need to declare this by determining whether any level in their supply chain utilized minerals which originated in the Democratic Republic of Congo (DRC) Zone. Additionally, starting January 2021, a new law will apply across the EU – the ‘Conflict Minerals Regulation’ by OECD, to check if the imports into EU are from a responsible supply chain of minerals and not from conflict-affected and high-risk areas.
These two regulations bring new challenges like having to deal with gaps in traceability and lack of proper documentation, which are critical in compliance assessments and declarations. Not all suppliers are able to deliver the required documentation to prove that they have done their due diligence while declaring their supplies to be ‘free of conflict minerals’.
Since the Conflict Minerals regulation requires annual reporting, there is an ongoing annual effort to reach out to suppliers and collect the latest compliance declarations. In the US, the Responsible Minerals Initiative (RMI), has developed the Conflict Minerals Reporting Template (CMRT), which is the standard now for Conflict Minerals declarations.
We provide support to clients to put a Conflict Minerals compliance program in place, which covers different aspects such as supplier training and orientation, as well as the annual efforts in CMRT Collection from suppliers. We provide an online platform for supplier engagement, while also ensuring the program is proactive with a direct outreach to suppliers.