Frequently Asked Questions (Conflict Minerals)

What are conflict minerals?

While definitions vary between countries and associated legislation, conflict minerals are generally understood to include: columbite-tantalite, also known as coltan (the metal ore from which tantalum is extracted); cassiterite (the metal ore from which tin is extracted); wolframite (the metal ore from which tungsten is extracted); gold; or their derivatives, which are believed to be financing conflict in the Democratic Republic of the Congo (DRC) or an adjoining country.

Due to the complexity of tracking and identifying ores and derivatives, Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act only deals with the four principal metals (also known as 3TGs) derived from the aforementioned ores. It is important to note, however, that the Organisation for Economic Cooperation and Development (OECD) does not restrict the definition of conflict minerals to 3TGs sourced from the DRC, but rather includes minerals from conflict-affected and high-risk areas more broadly.

What are smelters?

Smelters are organizations that purchase raw materials from mines, recyclers and scrap suppliers and melt them down to produce metals intended for use in production. Manufacturers that use tin, tungsten, tantalum or gold (3TGs) at some point within their supply chain must purchase metals from a smelter.

Smelters are considered a pinch point in the conflict minerals supply chain. Ore and recycled metals go through smelters or refiners before becoming commercially viable 3TGs. This makes smelters a fitting audit-point to determine the source of 3TGs. However, because smelters purchase raw ores and recycled materials from many different locations, once the metals have been smelted, it becomes near impossible to accurately trace their sources.

What is the Dodd-Frank Wall Street Reform and Consumer Protection Act and how does it relate to conflict minerals?

The Dodd-Frank Act is a regulation passed by the Obama Administration in 2010 to increase liability among companies and curb unethical business practices. Section 1502 of the Dodd-Frank Act requires U.S. publicly-traded companies to perform due diligence on their supply chain, identify whether conflict minerals are present within their products and submit a report to the U.S. Securities & Exchange Commission. These reports are public disclosures and must be made available on U.S. publicly-traded company websites.

Who is in scope of the Dodd-Frank Wall Street Reform and Consumer Protection Act?

The Dodd-Frank Act only applies to U.S. publicly-traded companies. However, because regulatory requirements trickle down through the chain of production, private companies that do business with their public counterparts, or private organizations that do business with public companies, will also be affected.

In terms of conflict mineral reporting, suppliers to U.S. publicly-traded companies will be required to submit reports to their customers concerning the sources of tin, tungsten, tantalum and gold (3TGs) that exist within their products. Publicly-traded companies require this information to fulfill their regulatory filing and due diligence requirements. Therefore, in many cases, participation in these due diligence processes are a stipulation in contracts.

What does the Dodd-Frank Wall Street Reform and Consumer Protection Act mean for private and/or non-U.S. companies?

If you do business with a publicly-traded U.S. company, you will be required by your customer to take action. They have specific legal requirements they must meet and require your cooperation to do so. As such, participating in these due diligence processes is often essential to doing business with these firms and written into the service agreement.

Even if you do not have tin, tungsten, tantalum, or gold (3TGs) in your supply chain, you must still submit that information to companies that request it, given it is a requirement of the U.S. Securities & Exchange Commission.

What is the European Union (EU) conflict mineral rule?

Due to enter into force in January 2021, the EU conflict mineral rule (EU 2017/821) obliges EU importers of tin, tungsten, tantalum and gold (3TGs) to undertake due diligence to ensure their supply chains are not contributing to armed conflict and instability in the Democratic Republic of the Congo (DRC) and surrounding countries. In-scope companies must maintain documentation demonstrating compliance and the results of mandatory, independent third-party audits of their supply chain.

Who is in scope of the European Union (EU) conflict mineral rule?

The EU conflict mineral rule places due diligence obligations on union importers. In the context of EU conflict minerals, a union importer means any natural or legal person declaring minerals or metals for release for free circulation, or any natural or legal person on whose behalf such declaration is made. Enforcement will occur at the Member State level, with each state responsible for assigning an authority to conduct on-the-spot inspections of importers and review five years’ worth of mineral and metal import data.

What other conflict mineral regulations and standards should I be aware of?

In addition to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the European Union (EU) conflict mineral rule, there are a range of other regulations and standards companies and their suppliers may need to comply with. These include, but are not limited to:

  • The EU Non-Financial Reporting Directive: Requires companies to produce corporate social responsibility disclosures on matters relating to the environment, social and employee issues, workplace diversity, human rights (including conflict minerals) and anti-bribery and anti-corruption (ABAC) in order to increase transparency and accountability.
  • Emerging Chinese conflict mineral guidelines: China is advancing its efforts to address conflict mineral issues by incorporating the Organisation for Economic Cooperation and Development (OECD)’s responsible minerals guidance into a national standard (called the “Standard”), and by creating legally binding oversight and a supervision rule (called the “Rule”). Both the standard and the rule are expected to be published by the end of 2017.
  • The IPC-1754, 1752A and 1755 standards: Various standards relating to conflict mineral compliance, with which companies and suppliers may be asked to align to secure contracts, membership in particular trade groups and more.
  • Corporate social responsibility (CSR) and environmental and social governance (ESG) programs.

What is my role in helping our customer comply with global conflict mineral rules?

If you are reading this, it is likely your customer is required to collect conflict mineral data from its suppliers. Companies will request that their suppliers complete and submit a Conflict Minerals Reporting Template (CMRT).

Once received, these forms help companies identify the presence of tin, tungsten, tantalum and gold (3TGs) in supplied products. This information can then be rolled up into a Conflict Mineral Report (CMR) and submitted to the U.S. Securities & Exchange Commission, and other relevant conflict mineral regulatory enforcement bodies.

For more information on how to complete a CMRT, read about common mistakes and best practices in our blog post.

What is a Conflict Minerals Reporting Template (CMRT)?

The CMRT is the industry standard for conflict mineral data collection, used by the majority of in-scope companies to complete supply chain due diligence.

The CMRT was developed by the Conflict-Free Sourcing Initiative (CFSI) and is regularly updated to better support companies as they complete their regulatory requirements. It is available as a free-to-download Excel file.

The CMRT file is broken down by tabs and contains a number of questions. Suppliers fill in their responses and submit the file to their customers. Based on the answers provided in the CMRT, the data can be programmatically validated by a software solution provider such as Assent Compliance, allowing companies to quickly analyze and utilize their data.

To download the latest version of the CMRT, click here. To learn about common mistakes and best practices when completing your CMRT, check out our comprehensive article here.

How do I submit requested information to my customer?

When your customer asked you to complete a Conflict Minerals Reporting Template (CMRT), they should have included details on how to submit the form. If not, contact your customer and inquire how they would like you to return the CMRT.

If your customer is an Assent Compliance client, you will have received an email requesting the CMRT along with a unique link to your very own Supplier Portal. This portal allows you to easily submit your file and supporting documentation directly to your customer’s compliance manager. If you have any additional questions about this process, your email also contains contact information to request support.

To download the latest version of the CMRT, click here. To learn about common mistakes and best practices when completing your CMRT, check out our comprehensive article here.

What makes a smelter high-risk?

Smelters in the Democratic Republic of the Congo (DRC) or adjoining countries that are known to source from mines using conflict minerals or refuse to meet conformance standards with international due diligence efforts tend to be classified as high-risk. Many Responsible Business Alliance (RBA, formerly the EICC) members rely exclusively on due diligence into smelters administered by the RBA Responsible Minerals Initiative (RMI, formerly the CFSI).

You can read more about high-risk smelters here.

What do I do when a high-risk smelter is reported in my supply chain?

Most companies will conduct a review of their supply chains against the criteria identified as high-risk. This review needs to be conducted periodically throughout the course of due diligence activities, and must be responsive to changes to information concerning smelters and customer inquiries. Many companies will demand the removal of smelters from the supply chain if they are deemed to be high-risk. The choice to remove or retain the smelter is left to the company, and should be in line with company policies and positions concerning the use of conflict minerals from unethical sources.

You can read more about high-risk smelters and how they might affect your supply chain in our guide, available here.

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