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 →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
Read more →As has become habit with SEC, the highly publicized June timeframe for publication of the Commission’s final rule on conflict minerals (Section 1502 of the Dodd-Frank Act) will pass by without action. SEC Chair Mary Shapiro stated in a budgetary hearing last March that she anticipated the final rule in June, establishing yet another informal deadline and setting some expectations in the regulated community. The Commission did not meet this week, nor is a meeting scheduled for today, Monday or anytime in the next 7 days. Rules are voted on in Commission meetings for adoption, then publication. Federal law requires public notice of Commission meetings at least 7 days in advance (except for emergency meetings, which typically involve enforcement actions, not rule making). There is talk in some circles of an August publication timeframe. Of equal interest is how – or perhaps whether – Shapiro responds to this week’s letter from 58 members of Congress demanding July 1 action on the rule or a June 29 written response explaining the Commission’s reason for the inaction/delays. We have heard that the letter could possibly go completely unanswered. With the government’s attention on yesterday’s Supreme Court decision on health care, and politicians
Read more →A letter to SEC Chair Mary Shapiro was filed by 58 House Democrats on Friday June 22 concerning the delay in finalizing rules on conflict minerals and disclosures of payments made to governments by extractive industries. The letter expressed disappointment that “the Commission has exceeded the statutory deadline for final [conflict minerals] rules by more than a year” and that “there is no sign that a final version of either rule will be published soon.” The group admonished the Commission by stating “there is no clear reason for the delay” and that “the Commission has had more than enough time to consider and respond to all of the substantive comments.” The letter closes with “We urge you to schedule a vote on the final rules to implement Sections 1502 and 1504 by July 1, 2012. If a vote cannot be scheduled by this date, we request you respond to this letter with an explanation regarding the extended delay and provide us with a definitive date for a vote on these two rules.” The deadline for the response to the Congressmen is June 29, 2012.
Read more →Based on our ongoing dialogs with clients and other companies, and our attendance at last week’s EICC-GeSI Conflict Minerals Workshop in Philadelphia, we have a few predictions about the upcoming second report on OECD’s downstream pilot program on the implementation of their due diligence guidance. The report was originally scheduled for release last month, but is not yet available and we don’t know when it will be published (although we would expect in advance of the next meeting the first week of May). As our client base consists more of heavy industry, hard metals and non-electronics consumer products, some of our predictions stand in contrast to “conventional wisdom.” Especially for US companies subject to DF1502, there is an increasing recognition that the makeup of the downstream pilot participants is heavily skewed toward the electronics industry, and the results of the pilot are therefore not representative of heavy manufacturing or other non-electronics sectors. At the same time, we expect an increased awareness of conflict minerals (CM) issues in pilot participants which means a related increase in uptake of basic program elements such as company policies on conflict minerals. Many companies (arguably most companies (a) outside the electronics industry and (b) not
Read more →The World Gold Council (WGC) has released the exposure draft, dated March 2012, of its Conflict-Free Gold Standard. According to the press release, The objective of the Standard is to create absolute trust that the gold produced under its guidelines neither fuels armed conflict, nor funds armed groups, nor contributes to human rights abuses associated with these conflicts. The WGC press release, which contains a link to the draft, is available here.
Read more →Do you have questions about conflict minerals programs or cultural/business contexts of conflict minerals in Central Africa? In just over a month, Elm’s Lawrence Heim will be presenting at ITRI’s Conflict Minerals Programme in Cape Town South Africa as part of ITRI’s International Tin Conference 2012. He is joining a panel of world renowned experts from Central African countries including DRC, the United Nations (UN), US Agency for International Development (USAID) and more. These recognized experts, covering a range of topics relevant to cultural and business implications of conflict minerals in Africa, include (alphabetically): Patrick Amisi, Minister of Mines, Maniema, DRC Banny Banza, Vice President Stakeholders Committee Katanga, Head of SAESSCAM Katanga Bali Barume – BGR Yves Bawa – Pact Cyprien Birhingingwa, South Kivu civil society Assheton Carter, Senior Vice President, Pact Joseph Ikoli – DRC Eric Kajemba, OGP (civil society) (to be confirmed) John Kanyoni, FEC & Association des Comptoirs, North Kivu and DRC Bob Leet – EICC/Intel Gilbert Leya – Katanga Paul Mabolia, ICGLR Committee on Illegal Exploitation of Natural Resources, DRC Joseph Mbaya – Rwanda Kay Nimmo – ITRI Henry Nkeng – MONUSCO – Centre de Negoce Dr Emmanuel Nkurunziza, President of Stakeholders Committee Rwanda, Director General
Read more →With little fanfare, OECD published its Final Draft Supplement on Gold v. 3.0. Based on – but significantly longer than – the Supplement on Tin, Tantalum and Tungsten, the gold supplement offers far more details concerning the reality of program development and implementation. We take this as a positive sign that OECD is indeed paying attention to the input from the pilot program participants and is willing modify their documents/approach.
Read more →During our recent research on the financial impact of consumer sentiment about conflict minerals, we conducted a deep review of the Enough Project’s rankings of electronics companies’ conflict minerals programs. These rankings are frequently referred to in publications and in social media venues such as twitter. As we are auditors by vocation and predilection, we took an in-depth look at the data collection tool/approach, the data itself and interpretation thereof. Our review found that the rankings Reflect outdated and incomplete information, Appear to contain bias, and Are inconsistent in applying their scoring system. Flawed questions. Several of the questions in the survey are flawed because they ask for solutions and information that did not exist at the time of the survey – and still don’t today. For instance: Question: Has the company published the refiners it uses for 3TG? This fails to recognize the existence of legally-binding non-disclosure and confidentiality agreements that are common between suppliers, especially in the electronics industry. Even today, concerns about confidentiality are unresolved and no company has published a list of its 3TG refiners. Confidentiality agreements are many times necessary to protect key intellectual property and valuable trade secrets related to the products manufactured and similar
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