A recent report about the general state of conflict-minerals-readiness has spurred much on-line conversations and articles. Research firm IHS published the results of its analysis of electronics companies, summing things up As of August, the percentage of electronics component manufacturers with available conflict minerals information amounted to only 11.3 percent of the peer group… Moreover, a webinar last month sponsored by KPMG and the law firm King & Spalding polled over 1000 participants (only 21% of whom were from the electronics industry) on their current program status. Only 22% of those polled have done anything more than establish a company policy on conflict minerals, with 68% indicating they have not developed any strategy or do not know where they stand. Even though the electronics industry has generally been on the forefront of conflict minerals program advocacy and development, this isn’t completely unexpected. The final SEC rule was adopted only two months ago, and most companies were waiting for the final rule to begin working on their programs. Companies are now talking amongst themselves about how each are tackling the massive scope of conflict minerals due diligence and program development. This is to be expected and can help companies create solutions
Read more →UPDATE: To help keep clients and others informed, we have added new insights and commentary based on further discussions with a variety of stakeholders. Our review of the final SEC regulation on conflict minerals is now available. While we strive to be first in presenting you important information, this time we chose a different path. In the days since the rule was adopted, we have had many discussions with clients, other companies, legal authorities, the SEC directly and others who raised a variety of points, preliminary interpretations and questions. Along with the technical substance of this complex ruling, our review also incorporates a number of unique insights from these discussions that are not reflected in other analyses. We have also included guidance on what companies should be doing in the next 12 months to prepare for the first reporting deadline and customer demands. We are using a stunning new presentation format (prezi) that is more effective than standard formats at communicating information/context and emphasizing key points. Prezi requires no new software or downloads and is easy to use: Full screen mode provides the optimum viewing experience. Click on the full screen icon near the lower right hand corner of the viewer. Navigate manually through
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 →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 →The SEC will meet at 10:00am August 22 to vote on the final conflict minerals regulation in addition to conducting other business. Read the announcement here.
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 →On June 21, 2012, The UN Security Council released the interim report on DRC (document number S/2012/348). As stated in the report, “the Group’s primary role is to investigate and document evidence regarding the procurement of military equipment, including weapons and ammunition, by armed groups active in the Democratic Republic of the Congo, as well as their related financial networks and involvement in the exploitation and trade of natural resources” [Paragraph 5]. Therefore, the majority of the report details the existence and activities of armed groups in DRC and adjoining countries, including April’s defection from FARDC lead by General Bosco Ntaganda. But the report also “evaluat[es] the impact of its due diligence guidelines for importers, processing industries and consumers of Congolese mineral products…” [Paragraph 7]. Regarding those findings, The Group has established that market uncertainty resulting from the lengthy delay in the publication of the [US Securities and Exchange] Commission rules, together with the fear of potential 100 per cent “conflict free” demands in [the companies’] reporting obligations, has led most industry actors to pull out of the market in the eastern Democratic Republic of Congo rather than conduct due diligence on their supply chains. [Paragraph 151]. Last August, we
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.
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