Is Your Company Prepared for Conflict Mineral Compliance?
According to PwC’s Conflict Minerals Survey, only 4 percent of public companies in the United States have completed a draft of their conflict minerals report—90 percent haven’t even begun or have only developed initial drafts.1
Reporting requirements for the SEC’s Dodd-Frank mandated conflict minerals rule are due May 31, but a significant number of public companies are still in the early stages of preparing their disclosure.2
6,000 companies directly impacted by the new rule are focusing on how tracking and reporting conflict minerals in their products will affect their global reputation and supply chain practices.3
Conflict minerals—tin, tantalum, gold, and tungsten—originating in the Democratic Republic of Congo (DRC) are being used to finance a brutal civil war. In an effort to promote conflict-free manufacturing, companies such as Intel joined the Electronic Industry Citizenship Coalition (EICC) and its Conflict-Free Smelter program in 2011. Together, they are encouraging mineral processing plants to provide proof that they do not fund the ongoing war by using these minerals in their supply chain.
At the Consumer Electronics Show in January 2014, Intel CEO Brian Krzanich announced that all Intel microprocessors manufactured in 2014 will be conflict-free.4 In doing so, Intel became the first manufacturer in its sector to introduce conflict-free products to the market.
The task of researching its supply chain and eliminating conflict minerals has given Intel a significant commercial advantage, catching the attention of its business partners, consumers, and investors.
Let’s take a closer look at just how important these minerals are to the tech industry:
- Tungsten — allows mobile devices to vibrate and contains wear-resistant properties
- Tantalum — used to store electricity in flat mobile devices
- Tin — lines the circuit board under the keyboard
- Gold — coats the wiring and is the highest value metal inside mobile phones and laptops
The growing importance and awareness of conflict minerals is taking social media and tech blogs by storm. Media attention has encouraged over 120 companies across the globe to come together in identifying conflict-free smelters and refiners.5
In January of 2014, the Conflict-Free Sourcing Initiative announced that it has identified and approved several conflict-free smelters and refiners for all four minerals. This announcement is considered a major step forward in improving the quality of the supply chain for these metals.
The benefits to reporting conflict minerals are evident. Companies are proving to investors they have a clear and precise way of tracking their supply chain while promoting a positive public image. Stakeholders are looking to see that companies are taking a step-by-step approach to eliminating the use of conflict minerals, as well as improving the transparency of their procurement. As a result, companies are improving their metric systems for tracking material information in the future.
1"2014 Conflict minerals survey: Where companies stand on their compliance efforts-this year and beyond." (2014). PricewaterhouseCooper. Retrieved from https://www.pwc.com/us/en/audit-assurance-services/publications/assets/p...
2"Industry Associations Launch Conflict Minerals Compliance Center." (2014). Environmental Leader. Retrieved from http://www.environmentalleader.com/2014/01/22/industry-associations-laun...
3Ray, T. "CES: Intel’s Krzanich Says Its Chips to Be Free of 'Conflict Minerals." (2014). Barron’s. Retrieved from http://blogs.barrons.com/techtraderdaily/2014/01/06/ces-intels-krzanich-...
4Pendergast, J. "Conflict Minerals 101." (2009). Enough Project. [Video]. Retrieved from http://youtu.be/aF-sJgcoY20
5"Conflict-Free Sources for All Four Conflict Minerals Now Identified." (2014). CSRwire. Retrieved from http://www.csrwire.com/press_releases/36666-Conflict-Free-Sources-for-Al...