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 →Two recent news items from the UK’s International Business Times illustrate interesting developments in the area of conflict minerals. The group known as Anonymous (referred to as “hacktivists” for their use of hacking as a tactic to promote their activist causes) targeted semiconductor manufacturer Intel and European metals trader Traxys in attacks yesterday and today. The first article highlights Anonymous’ attacks of Intel that claim “mining companies that provide coltan to Intel are working in DR Congo”. The article did not indicate what evidence Anonymous relied on in making the accusation. According the article, Anonymous dumped personal information such as usernames, password, emails as well as a heap of emails and payments database on [an activist website] as part of Operation Green Rights, which Anonymous launched last year against major oil companies… The second article offers more details on the Traxys attack, including text from emails that Anonymous claims support their position that the company is engaged in trading illegally-sourced materials. The article only includes excerpts from emails received by Traxys, and does not mention responses to those by Traxys. We note this because we ourselves occasionally receive unsolicited emails from traders offering to sell a variety of ores, metals and recyclables.
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)
Read more →Top law firm Akin Gump recently published an Alert containing their in-depth analysis of the letter from Senator Leahy and others to SEC expressing views on the final SEC conflict minerals regulation yet to be promulgated. Akin Gump noted Leahy’s comments on the SEC’s apparent position that the conflict minerals report (CMR) be “furnished” rather than “filed”. The practical impact of the “furnished” vs. “filed” distinction is that “furnished” information is not automatically incorporated by reference into a reporting issuer’s filings with the Commission and is not subject to liability under Section 18 of the Exchange Act. Section 18 of the Exchange Act makes reporting issuers liable for “false or misleading statements” if investors rely on such statements when purchasing or selling securities at a price which was affected by such statements. Reporting issuers who are required to “furnish” information to the SEC as an exhibit to an annual filing may still be subject to liability for violations of Sections 13(a) or 15(d) of the Exchange Act if they fail to furnish a required exhibit or if the required exhibit is “unreliable”. Penalties for such violations may be injunctive, civil or criminal and may also extend to individual executives of
Read more →The Elm Consulting Group International LLC has released an analysis of whether a discernible correlation exists between consumer sentiment on conflict minerals and consumer buying decisions in the electronics industry. The report provides valuable insight to companies planning conflict minerals management programs, public messaging initiatives and related internal expectations. We recognize that 2011 is the first year of broad public awareness about conflict minerals. It is possible there has not been enough time for the topic to have permeated consumer consciousness and priorities. In addition, perhaps the consumer sentiment rankings we relied on are not viewed as valid, credible, accurate or actionable by the general public*. These points are valid, but this is the best information currently available. The analysis concludes: Based on the findings from this small sample, consumers are not likely to differentially punish or reward companies (in financially material sales figures) in response to conflict minerals disclosures or programs, at least in the near term. Supporting this conclusion, we highlighted a contrast between HP and Apple. For 2011, HP ranked number 1 in the Enough Project ratings; Apple ranked in the middle tier of the ratings and also was the subject of intense public criticism over corporate
Read more →As it has done each January for the past 7 years in conjunction with its annual meeting in Davos-Klosters, Switzerland, the World Economic Forum (WEF) has released its annual review of Global Risks. We have enjoyed the previous years’ report and find them incredibly interesting, primarily due to the insights provided about linkages and correlations of risk areas. This year’s report – as did the 2011 report – contains a “microsite” that allows a meaningful interactive user experience in exploring the risk topics/geographies and related linkages. Click on the Data Explorer tab to the right of the Report Viewer window – the controls are highly intuitive. The Report goes well beyond HSE and sustainability matters to be sure, but well worth mentioning here and the time spent reviewing the report.
Read more →We are pleased to have as a guest contributor Jeffrey W. Rubin. Mr. Rubin a partner of Hogan Lovells US LLP practicing in New York, and is the Chair of the Federal Regulation of Securities Committee in the Business Law Section of the American Bar Association. He can be contacted directly at jeffrey.rubin@hoganlovells.com. The views he expresses below are solely his own. Certainly one of the most frequently viewed pages on the SEC’s website these past few months has been the page announcing upcoming SEC meetings to adopt rule proposals. Interest in the timing of the SEC’s adoption of its final conflict minerals rules has perhaps prompted most of those views. Although Section 1502 of the Dodd-Frank Act required the SEC to promulgate regulations by last April, that date passed with the SEC caught between the Scylla of a statutory mandate and calls by the Congressional conflict minerals sponsors and NGOs for prompt and strict adoption of the final rules, and the Charybdis of companies’ concerns regarding the extraordinary burdens the rule will impose upon them. Contrast, for example, the SEC’s estimate that the aggregate additional burden on companies as a result of the rule will be 153,864 hours of
Read more →After the devastating tsunami in Japan early in 2011, we began exploring the interrelationship of green/ethical procurement (such as conflict minerals) with business continuity/disaster recovery planning. Now, an article from leading electronics supplier Digi-Key states that lead times are delayed up to almost 6 months for a significant amount of the world’s production of tantalum capacitors as a result of the flooding in Thailand, combined with raw material supply impacts of conflict minerals laws/policies. Of course, higher prices are also expected. ”Combine those two things together and that put a big strain on the supply of raw materials in the market as well as pricing,” said Joe Porter, vice president tantalum product marketing at Kemet Corp. based in Greenville, S.C. We continue to believe that significant opportunities exist for business continuity/disaster recovery planning efforts to incorporate growing green/ethical procurement initiatives. Robust sustainability risk assessment exercises are essential in identifying relevant gaps and areas for improvement. Feel free to contact us for more information about how we can help.
Read more →A new study on the economic impact of SEC proposed conflict minerals rule was released earlier this week by Tulane University. The study evaluated cost estimates from SEC , National Association of Manufacturers (NAM) and IPC and provides what they … Continue reading →
We are pleased to announce that the U.S. Securities and Exchange Commission (SEC) has selected Lawrence Heim of Elm’s Atlanta office to sit on the expert panel for Panel 2 of their previously announced public roundtable on the proposed conflict … Continue reading →
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