Last week, OECD made available the complete final report on downstream company pilot program implementation of its conflict minerals due diligence framework. We have not completed our review and summary, but the report can be downloaded for free here. Of particular initial interest to many may be: the illustrative list of products (page 12) key trends (pages 15-18) learnings and recommendations from pilot participants (pages 60-64). Among the recommendations is one that Elm has voiced for two years: that the audit/auditor standards be upgraded from the generic ISO19011. However, the recommendation references ISO/IEC 17021, which brings its own unique concerns and challenges. list of 3T smelters (pages 70-75). It is important to understand that this list does not include gold refiners, nor is the list exhaustive or limited to ”approved” or “certified” smelters. We hope to have additional analysis and insights available soon.
Read more →Elm has been selected by The Auditing Roundtable to lead their newly formed Working Group to develop a professional auitdor guidance intended for use by non-CPAs in applying the “generally accepted government auditing standards” (also known as “GAGAS” or the Yellow Book) to audits of Conflict Minerals Reports under SEC’s conflict minerals regulations. Lawrence Heim, CPEA, Director of Elm’s Conflict Minerals services: ”The Board of Directors agreed to take on the challenge of developing this guidance, and doing so as rapidly as possible to serve the regulated community. I am honored that the Board asked me to play a role in that process.” Heim continued: “Given the importance, visibility and global impact of of this guidance, the Board recognizes how critical broad-based input and consensus will be. The Working Group’s first order of business is to present to the Board for their approval two lists: one of recommended professional peer reviewers and one of organizations/entities from whom input will be sought as stakeholders.” The Working Group will hold its first meeting in conjunction with the Roundtable’s national meeting in San Diego January 28-30, 2013. Elm has been a vocal proponent of strong auditing and auditor qualification/independence standards in the conflict
Read more →Elm announces CM CheckPointSM, a new rapid and highly cost-effective conflict minerals program assessment method/deliverable to be available late January 2013. CM CheckPointSM is intended for companies who have already begun program development or implementation and are looking for high-level “navigation checks” – rather than deep dives – from a third party to confirm strategic direction, alignment with SEC regulations and/or project status. Features of CM CheckPointSM include: Assesses from a high-level perspective practices/status/available documentation against the three-step process for SEC regulatory compliance (plus reporting/auditing) and the 5-step process of OECD Due Diligence framework and related supplements Reviews from a high-level perspective the framework, strategy, procedures, and generalized level of implementation at the company’s corporate level Topic/element/task general completion status indicators of Complete, Partially Complete, Not Started, Not Applicable Severity rankings for identified gaps/deficiencies reflecting potential importance to program implementation or potential audit outcome Can be used to confirm site-level program implementation/consistency with corporate expectations Automated summary report generation on-site with intuitive visual indicators Comment fields for each topic and sub-element allow highlighting of relevant data, findings or limitations encountered Minimal disruption – requires a single Elm assessor and only a few days on site, including on-site summary reporting Evolutionary steps in
Read more →With 2013 looming, the past 2 months have been a whirl of meetings, conference calls, proposals, RFP development support and project work. Through all that, a few questions companies are asking in this regard are becoming almost universal. A handful of these questions and thoughts specific to SEC regulatory compliance are below. We hope you will find these informative and helpful. How far back in the supply chain do I need to go? The preamble to the final rule makes it clear that issuers may satisfy the Reasonable Country of Origin Inquiry obtaining and relying on representations from the company’s direct (Tier 1) suppliers. However, you must have reason to believe the representations are true and additional efforts may be required to either (a) identify/monitor “applicable warning signs or other circumstances” indicating that materials may originate from Covered Countries or are not scrap, or (b) confirm the accuracy/credibility of information from those suppliers. How can I be comfortable relying on information provided to me by my suppliers? This is a difficult question but one that should be approached with an attitude of what auditors call “professional skepticism”. For example, one company recently released a letter to its customers clearly stating that
Read more →Since the US Securities and Exchange Commission adopted their final conflict minerals rule on August 22, Elm and our Conflict Minerals Consortium partners have seen an explosion in proposals, RFPs and related meetings, which we expected. Also expected was the concurrent growth of firms marketing themselves as conflict minerals experts or having off-the-shelf technological solutions. We offer the following points to consider when evaluating possible business partners for a long, unprecedented, complex – and likely costly – journey. A little due diligence on your consultants may provide you a smoother due diligence process for conflict minerals. You may find it worth asking your potential conflict minerals advisors, consultants and solutions providers questions like those below. Even a 60 second review of Google search results on the expert can be revealing. When did the expert start working on conflict minerals matters? The issue began to come forward in the electronics industry back in 2008, but gained real momentum in 2010 with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010. A very small number of external advisors/consultants have direct experience going back to 2010, or even 2011 for that matter. Did the expert participate in public
Read more →Elm is pleased to be a charter member of the Conflict Minerals Consortium, announced last month. The Consortium has had great success in its short life. Numerous team-based proposals involving Consortium members have been submitted to a range of companies, with our first win less than a week after the group’s launch. Other exciting announcements are coming soon as well. Meeting and conversing with a “Who’s Who” of the Fortune 250, Elm and other Consortium members have successfully highlighted our cross-functional expertise to retailers, consumer products, heavy industry and manufacturers of electronics, semiconductors and medical devices. Feel free to contact us or visit the Consortium’s website for more information.
Read more →A recent report about the general state of conflict-minerals-readiness has spurred much on-line conversations and articles. Research firm IHS published the results of its analysis of electronics companies, summing things up As of August, the percentage of electronics component manufacturers with available conflict minerals information amounted to only 11.3 percent of the peer group… Moreover, a webinar last month sponsored by KPMG and the law firm King & Spalding polled over 1000 participants (only 21% of whom were from the electronics industry) on their current program status. Only 22% of those polled have done anything more than establish a company policy on conflict minerals, with 68% indicating they have not developed any strategy or do not know where they stand. Even though the electronics industry has generally been on the forefront of conflict minerals program advocacy and development, this isn’t completely unexpected. The final SEC rule was adopted only two months ago, and most companies were waiting for the final rule to begin working on their programs. Companies are now talking amongst themselves about how each are tackling the massive scope of conflict minerals due diligence and program development. This is to be expected and can help companies create solutions
Read more →In response to yesterday’s passage by the US Securities and Exchange Commission of the final conflict minerals regulation, today marks the official launch of an international consortium formed to provide comprehensive services globally for conflict minerals due diligence, traceability, auditing and disclosure for companies impacted by conflict minerals requirements. The group, called the Conflict Minerals Solutions Consortium, was initiated by The Elm Consulting Group International LLC. Lawrence Heim, Director of Elm, stated “We don’t believe that any single entity is able to provide similar comprehensive services due to the complexity of global supply chains and material flow. Our goal was to assemble a unique and highly qualified group to serve the wide range of companies and potential requirements.“ Heim continued, “We tried to assemble project team members who are not directly working in existing conflict minerals audit/traceability programs such as those under OECD or electronics industry groups. We believe this independence will foster development of new solutions that may be more efficient and/or effective than those currently available.” Members of the Consortium include recognized experts globally representing: HSE/sustainability auditing Management systems program development RoHS/REACH/EPEAT program development Mining industry auditing/traceability program development Traceability software CSR integration/reporting Legal advisory (US and Africa)
Read more →The final SEC regulation on conflict minerals, passed earlier today by a 3-2 vote, is now available for download. Most of the attendees in the auditorium, including Elm, had a difficult time hearing the substantive commentary made on the final regulation by John Fieldsend of the SEC’s staff (we understand the audio on the webcast was far superior to what those of us in the audience experienced). Therefore, we will be publishing a summary of key points before the end of the week. In the meantime, SEC’s official meeting summary is here and click here to download from the SEC website.
Read more →Two years after its initial rankings, activists Enough! have issued their updated rankings on electronics companies’ progress on conflict minerals. Even CNN picked up this up and reported it on the front page of CNN.com. A quick review of the summary report indicates that Enough appears to have addressed some of the points from our critical review of the initial 2010 rankings. However, our comments concerning the three flawed questions remain substantially valid. Although we have not yet analyzed the detailed responses behind the summary report (those responses are available here), we plan to do so soon. Similarly as we look even further ahead, we anticipate updating our own report on the financial impact of Enough’s rankings.
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