Our friends at Resource Consulting Services (RCS) have released their latest newsletter with interesting and valuable information on a range of natural resource policy issues, including updates on the Conflict Free Tin Initiative and their views from Mining Inadaba 2013. View the newsletter here.
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 →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 →Respected law firm Cooley LLP has published an overview of the latest documents (filed November 21) in the legal challenge to SEC’s final conflict minerals regulations. These filings provide more detail about the technical and legal arguments to be brought against the US government in the case. The filings can be accessed here and here and Cooley’s article is here. The filings state that SEC has agreed to an expedited “briefing schedule” for their purposes, with final briefs to be filed by March 29, 2013 in an attempt to “ensure that outstanding uncertainty about the validity of the Rule and the statute will be resolved as soon as feasible.” We expect that SEC’s plans for issuing interpretive guidance on the rule may be delayed until after the March briefing is concluded. And in a closely-related development, Amnesty International announced that they filed a petition to “intervene to defend new regulations that require corporations to investigate and disclose whether their sourcing practices finance armed groups in the Democratic Republic of the Congo (DRC)… the organization, which is represented by Public Citizen Litigation Group, has filed a motion to intervene in the lawsuit so that it can help defend the regulations.”
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 →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 →Anticipating a final rulemaking by SEC on conflict minerals, the American Law Institute and American Bar Association (ALI-ABA) has announced a webinar sponsored by ABA’s Business Law Section on the matter to be held September 12 ,2012. The participants include: Planning Chair and Moderator Jeffrey W. Rubin, Hogan Lovells LLP, New York City. Mr. Rubin will be giving a substantive presentation as well. John C. Bullock, Esq., Cheshire, CT Lawrence M. Heim, CPEA, The Elm Consulting Group International LLC, Atlanta, GA Bob E. Leet, M. Sc., Intel Corporation/EICC, Portland, OR Irma Villarreal, Kraft Foods Company, Northfield, IL Virtually all ALI CLE programs are accredited in all US jurisdictions. Specific MCLE information for this course is not yet available.
Read more →Source 44, a leading provider of supply chain sustainability solutions, and The Elm Consulting Group International LLC (“Elm”) today announced they have formed a cooperative relationship that will provide a range of conflict minerals traceability and due diligence offerings. The firms are both leaders in developing groundbreaking technology and solutions that can help companies meet conflict minerals regulations outlined in Section 1502 of the Dodd-Frank Act. This announcement comes ahead of the imminent ruling expected by the U.S. Securities and Exchange Commission (SEC) on the scope of Section 1502 and the nature of the relevant reporting requirements. “Some time ago, we realized that information management tools will be a critical component of conflict minerals traceability programs,” said Lawrence Heim, Director in Elm’s Atlanta office. “We were struck by Source 44’s functionality, user interface and dashboard, as well as the auditability of the source information within the system.” Source 44 is a leader in accessing, managing and leveraging information technology to drive sustainable supply chain management. Elm has extensive experience and expertize in environmental/sustainability management systems development and auditing, including conflict minerals. Together, the firms will be able to provide a seamless solution offering for conflict minerals due diligence traceability program development,
Read more →The WSJ reported yesterday that SEC is considering toughening certain aspects of their 2010 conflict minerals proposal. The statements made in the article corroborate information provided to Elm last week by reliable sources. If the final rule passes as the article indicates and as we have been told, the official Conflict Minerals Report (CMR) audits will be conducted as Attestation Engagements and only by CPAs. The proposed rule stated that SEC and GAO felt that the audits could be done as Performance Audits, allowing EHS auditors to do those. That sentiment was also clear during the SEC’s Roundtable in October. However, we understand that SEC stands ready to finalize their determination that CMR audits must be filed rather than furnished, making the audits part of the Form 10-K and other SEC forms. If the CMR audits were to be “furnished” as the proposed rule indicated, there would be more flexibility in who could be considered appropriate auditors. One implication of this decision is that the credibility of information relied upon in due diligence processes – including any of the nice supporting audits listed in the recent GAO report – will be heavily scrutinized before CPAs and company senior management sign off on the CMR audits.
Read more →The highly-touted Solutions for Hope (SfH) Project in the DRC has received global publicity as a potential model for future conflict-free mineral sourcing within the DRC. As part of the project, an independent audit of the operations was conducted to evaluate conformance of the operation to the OECD Due Diligence Guidance. This work was conducted by Gregory Mthembu-Salter, a consultant to the United Nations Group of Experts. This audit document, which forms the basis of SfH’s conflict-free mine claims, is available on the SfH website. (NOTE: When we began writing this piece, the link to this audit report functioned properly. At the time of our publication, the link appears to have become corrupted, therefore we include the document in its exact form as originally downloaded from the SfH website on April 5, 2012. SfH OECD audit report) With the world carefully watching the SfH project, one expects the highest attention to detail and scrutiny at each step in the process. However, with all due respect to Mr. Mthembu-Salter (whom Elm will be meeting at the end of this month at the ITRI Conflict Minerals Programme in Cape Town South Africa), it is unlikely that an SEC Conflict Minerals Report (CMR)
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