Your company may be required to disclose detailed information about your products and supply chain if conflict minerals are contained in any of your products. The SEC rule recognizes the following four resources as conflict minerals, regardless of their country of origin:

• tin
• tantalum
• tungsten  
• gold.

The rule was enacted by the SEC, as a requirement of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, in order to help bring an end to the violent conflict in the Democratic Republic of Congo and neighboring countries. It requires certain companies that use conflict minerals in their products to ascertain and disclose whether the minerals in question originated in the DRC or adjoining countries, if their sale directly or indirectly benefited rebel groups, and other information about the origin and use of the minerals.

 

The SEC ruling requires action only of companies that:

• are publicly traded in the U.S.
• file specific public reports with the SEC under sections 13(a) or 15(d) of the Exchange Act 
• "manufacture or contract to manufacture" products that contain conflict minerals; and 
• use conflict minerals that are "necessary to the functionality or production of a product."
   

Companies that are required to file disclosure forms with the SEC must do so in a new 'Form SD' by May 31, 2014, covering products manufactured during the 2013 calendar year. Disclosure forms are required to be filed by the same date, May 31, every year following, relating to products from the previous year.

 

For affected companies, the SEC conflict minerals rule presents a unique challenge in relation to both transparency and traceability. The problematic nature of compliance with the rule stems from the complexity and lack of transparency that characterizes the mining industry in the geographic area, as well as the inherent difficulty in distinguishing minerals that originate in different locations from one another. Companies using 3T and 1G minerals are required to trace the conflict minerals that are present in their products back through the supply chain in a way rarely done before. The information exposed will then be made available to every stakeholder, from NGOs to customers, for scrutiny. Fresh approaches and protocols will need to be established to meet these new paradigms for traceability and transparency. However, they are also opportunities for organizations to gain a better understanding about their supply chains and engage with stakeholders in positive way.

 

• Research industry-specific materials databases, as these can aid investigations into which materials and parts may contain conflict minerals.
• Explore the collaborative supply chain analysis tools that are being developed by many industry associations and are designed to help assist companies with the process of compliance (for example, the Automotive Industry Action Group's collaboration with iPoint on the iPoint Conflict Minerals Platform, or iPCMP).
• Identify the elements within the company that are best suited to engage with suppliers and track the conflict minerals back through the supply chain.
• Disclosing in accordance with the SEC ruling is complex and there is a high level of legal accountability. Making use of internal and/or external expertise would help ensure efficient and accurate compliance.

Here are a few of the many interesting sustainability events happening in the coming month that we think worthy of your attention. It seems the West Coast wins this time!

October 14 - 17, San Francisco, CA - GreenBiz's VERGE San Francisco brings together innovators, entrepreneurs and public officials to address efficiencies in energy, buildings and transportation. For more information or to register visit www.Greenbiz.com/events/verge/2013/10/san-francisco. 

October 29, Palo Alto, CA - The 2013 Data Center Efficiency Summit, sponsored by the Silicon Valley Leadership Group, convenes more than 300 data center operators, engineers, vendors and government personnel for a full day of end-user case studies. To learn more and register visit www.svlg.org. 

 

November 5 - 8, San Francisco, CA - The 2013 BSR Conference focuses on "The Power of Networks" and how they make change happen. For more information visit www.bsr.org.