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 →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 →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.
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 Government Accountability Office (GAO) has published its report to Congress (mandated as part of Section 1502 of The Dodd-Frank Act) that assesses the effectiveness of Section 1502(b), describes issues encountered by the SEC in carrying out the provisions of the Act, reviews non-covered companies that have conflict minerals necessary to the functionality or production of a product manufactured by such companies; and reviews the rate of sexual-and gender-based violence in war-tom areas of the Democratic Republic of the Congo and adjoining countries. Because the final rule has not yet been promulgated, the GAO report – as stated by SEC in their June 22, 2012 written comments to the report - “examines the steps the SEC has taken toward issuing a conflict minerals disclosure rule; stakeholder-developed initiatives that may help covered companies comply with the anticipated rule; and any additional information available on the rate of sexual violence in the eastern Democratic Republic of Congo.” Key Points from the Report The following are excerpts from the report on what we think are key points. Some stakeholders’ efforts to improve their initiatives through expansion and harmonization have been hindered by the uncertainty regarding potential due diligence and disclosure requirements stemming from SEC’s delay
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