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 →International tin industry association ITRI is hosting its biennial international conference in Cape Town, South Africa on April 23 – 25, 2012. Following the conference on April 26, ITRI will hold a one-day seminar on conflict minerals. Elm is pleased to have been selected to present on audit requirements under the US Securities and Exchange Commission (SEC), their relationship to traditional environmental auditors/auditing practices and how this impacts conflict minerals due diligence programs/activities intended to support compliance with the upcoming SEC regulation. The complete program, covering a wide range of critical topics and featuring renowned experts on the subject including many from the affected African countries/economies, is available here.
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 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 social
Read more →We welcome David Schatsky as a guest contributor. David is principal analyst and founder of Green Research, a research, advisory and consulting firm focusing on clean tech, alternative energy and sustainability. He is at work on a study of the impact of the conflict minerals regulations on U.S.-listed companies and their suppliers. David is also the founder/editor of the website Dodd-Frank Section 1502, a valuable and timely compendium of news items on conflict minerals issues. Hundreds of people turned out on Tuesday, December 13 for a day-long discussion titled, “Transparency, Conflict Minerals and Natural Resources: What You Don’t Know About Dodd-Frank.” The event was held at the National Press Club in Washington, D.C. and was co-hosted by The Brookings Institution, a public policy think tank and Global Witness, a non-governmental organization that works to end conflict and poverty poor, often resource-rich, countries. The day was organized in two parts. The morning was focused on Dodd-Frank Section 1504, dealing with extractive industries disclosure. The afternoon focused on Section 1502, the conflict minerals disclosure. Rep. Jim McDemott (D-Wash) opened the session and Sen. Benjamin Cardin (D-Md.) presented the closing comments. The Rev. Jim Wallis spoke at lunch. The full agenda and list
Read more →If you missed this morning’s broadcast of the webinar on conflict minerals sponsored by MetalMiner and Aravo with Elm as a presenter, you can watch the replay here. Please feel free to contact us if you have questions or comments about the presentation.
Read more →UPDATE: For the latest information on the 2012 relaunch of the tool, click here. Elm has released a demonstration version of its pioneering Self-Implemented Conflict Minerals Audit Preparation© tool, or SICMAP℠. The demo contains abridged content, but retains the functionality, pragmatic approach and simplicity of the full version. “While we originally designed SICMAP℠ to assist companies in preparing for audits, we have seen an unexpected interest in use of the tool as a conflict minerals program development guide/framework”, said Lawrence Heim, Elm’s conflict minerals services leader. ”The demo version was made available because of the increased demand and interest.” To request a copy of the demo version, contact Lawrence Heim at lheim@elmgroup.com.
Read more →IPC has announced a pilot study of the OECD due diligence guidance that will run until June 2012. Elm confirmed that this study is an OECD-lead study intended to help the OECD identify important changes to their document. We recently wrote about views expressed by companies who tried to implement the Guidance earlier with little success. Another post dealt with the inconsistencies between the OECD Guidance and SEC standards for auditors and auditing engagements. It appears that OECD has capitulated – essentially reverting the status of their “final” standard back to a draft. While that may be good news to some extent, critical questions arise about the uncertainty it creates in the content of SEC’s upcoming final regulations, as well as how the project timing will impact companies seeking to implement a program to meet 2012 or even 2013 reporting.
Read more →Recent reports in the New York Times and Christian Science Monitor (CSM) about the impact of Section 1502 of the Dodd-Frank Act on the Democratic Republic of Congo (DRC) sparked both controversy and debate in the media and in on-line conversations. The CSM article contains an interview with Eric Kajemba who, according to the CSM, is founder/director of Observatoire Gouvernance et Paix (OGP), an NGO based in Bukavu, and has worked in the minerals trade. Mr. Kajemba provided insight into DRC’s mining sector in the twelve months since the law’s passage. Among his more interesting quotes: … It is true that there is no official embargo on the Congo today, and that the Dodd-Frank law did not call for such an embargo. But the truth is that as soon as the Congolese export ban was lifted, the Electronic Industry Citizenship Coalition (EICC) [an electronics industry body] in the United States imposed a de facto embargo. Traders here only had time to sell their stock and then everything stopped again! Now most of the minerals seem to leak out through smuggling. … There are a lot of initiatives that have been proposed, but this has added to the confusion. We need one approach. The centres de négoce and tagging are
Read more →In a letter dated July 28, 2011, the leaders of the House Committee on Financial Services submitted additional comments to the SEC on the yet-to-be-finalized conflict minerals regulations. The Committee Leaders, Congressmen Spencer Bachus, Gary Miller, Robert Dold and Steve Stivers, provided their recommendations on specific elements of a transitional implementation plan for Section 1502 of the Dodd-Frank Act. Key points brought forth in the letter include: The State Department’s most recent map of Conflict Zone Mines is incomplete, the mine sites are inaccessible, the Congolese Ministry of Mines cannot obtain verifiable information, and the information in the map is insufficient for companies t use in effective due diligence. Creation of a new temporary category – “indeterminate origin.” This would exempt companies from filing SEC reports when the origin is not possible to ascertain. Due diligence efforts would still be required and proper filings made once the source is determined. Retaining the “indeterminate origin” classification as permanent for scrap materials. A call to establish a de minimis standard for conflict minerals. It is interesting to note that the letter explicitly indicates the need for a “multi-tiered certification system, especially at the smelter and refinery level”. Such a program is not
Read more →ITRI reported the following yesterday: The Organisation for Economic Co-operation and Development (OECD) is expected to make a formal request that the US Securities and Exchange Commission (SEC) makes explicit reference to existing, internationally agreed due diligence guidelines when it releases new “conflict minerals” reporting rules shortly. The SEC is in the final stages of considering the interpretation of the US Dodd-Frank Wall Street Reform and Consumer Protection Act and may release the new ‘rules’ sometime in August. The OECD believes that its own guidelines, together with those set out by the UN Group of Experts on the Democratic Republic of Congo, can be used to help clarify definitions of “not DRC conflict free” and “DRC conflict free” under the US law. OECD has drafted a letter to SEC and is looking for companies or associations willing to support the concept of progressive due diligence and improvement of mining circumstances in the central African region, and to request clarification of the expectations for company reporting in terms of the ‘conflict mineral’ issue. Elm recently reported on certain US industry views on the OECD standard, which includes general concerns about potential inconsistencies with SEC auditor standards. These concerns are relevant to
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