Stakeholders Applaud As First Round of SEC Conflict Minerals Reports Filed

With today marking the deadline for conflict minerals disclosures to be submitted to the Securities and Exchange Commission (SEC), NGOs and sustainable and responsible investors are celebrating a significant milestone in the effort to bring transparency and due-diligence to the trade in conflict minerals from…

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June 2, 2014
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7589121486_1bcd068829_oWith today marking the deadline for conflict minerals disclosures to be submitted to the Securities and Exchange Commission (SEC), NGOs and sustainable and responsible investors are celebrating a significant milestone in the effort to bring transparency and due-diligence to the trade in conflict minerals from the Democratic Republic of Congo (DRC) and Great Lakes Region (GLR) of central Africa.

For four years since the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, interested investors, human rights groups, and companies have been working together to successfully implement Section 1502 of the Act, designed to end the trade in conflict minerals from the DRC and GLR. The submission of these reports, detailing company efforts to perform human rights due diligence to determine the source of four conflict minerals – tin, tungsten, tantalum, and gold (3TG) –signifies a momentous achievement for all those working to advance supply chain transparency and accountability for egregious human rights abuses.

Despite the complexity of the global conflict minerals supply chain, these reports prove that end-user due diligence is both possible and effective. Not only are companies learning important details about the origin of their raw materials, but investors and consumers are now privy to company activity information that will help them make responsible investment and consumption decisions. Furthermore, the fact that some companies are going beyond the minimum reporting requirements demonstrates that end-user due diligence can be an important tool to generate innovative conflict-free sourcing initiatives.

As the review process begins, a number of NGOs and sustainable and responsible investors (SRIs) have released a list of criteria to offer guidance and assist in evaluating the reports. Expectations Shortlist: Company Conflict Mineral Reporting and Activities features information stakeholders would expect to see in the SEC filings, on the issuers’ websites, or in sustainability reports.

The Responsible Sourcing Network (RSN), which has been organizing multi-stakeholder comments regarding Section 1502 of the Act since 2010, previously collaborated with the Enough Project to release a white paper, Expectations for Companies’ Conflict Minerals Reporting, in 2013. The new Expectations Shortlist offers more guidance to companies in the hopes of advancing corporate due diligence activities and improving information disclosed in future reports. Stakeholders expect companies to:

  • Clearly state activities implemented regarding conflict minerals.
  • Use an industry standard.
  • State efforts to advance conflict-free products.
  • Disclose a smelter list linked to issuer.
  • List percentage/number of identified conflict-free smelters in supply chain.

The passage of Dodd-Frank Section 1502 has inspired interested stakeholders to leverage their influence along the value chain to reform the minerals sector in the DRC and GLR. Initiatives like the Conflict-Free Smelter Program, the Public-Private Alliance for Responsible Minerals Trade, and the International Conference of the Great Lakes Region certification mechanism have emerged all along the supply chain, implementing activities past the basic requirements of the SEC rule. These efforts demonstrate the critical role supply chain transparency legislature can play in effecting real change.

RSN commends the stakeholders and companies who have taken proactive steps, working towards a conflict-free minerals industry that positively contribute to a peaceful and prosperous GLR.

Photo courtesy of the Responsible Sourcing Network.