Conflict Minerals Reporting: Best Practices to Meet Your Deadline

Conflict Minerals Reporting: Best Practices to Meet Your Deadline

Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act obligates U.S. publicly-traded companies to demonstrate due diligence in their supply chains and report on their use of conflict minerals, which are defined as tin, tungsten, tantalum and gold (3TGs).

In-scope companies must submit a report annually to the U.S. Securities and Exchange Commission (SEC) detailing these efforts. With the May 31, 2019, filing deadline fast approaching, in-scope companies should leverage the following best practices to ensure their forms are submitted on time.

Know Your Deadlines

The annual report, called a Form SD (Specialized Disclosure), identifies the use of 3TGs in products that were manufactured or contracted for manufacture in the calendar year prior to the submission deadline. As such, companies must prepare a report on products manufactured in 2018 before the May 31, 2019, deadline. The Form SD must be submitted on the Electronic Data Gathering Analysis and Retrieval System (EDGAR).

Understand the Requirements

If a company determines that 3TGs are present, it must make an effort to determine whether the minerals originated in the Democratic Republic of the Congo (DRC) or its adjoining countries. This can be accomplished through a Reasonable Country of Origin Inquiry (RCOI). The company must also determine whether the minerals were derived from recycled or scrap sources, and document these efforts in the Form SD.

If the process determines the 3TGs originated in the DRC, companies must exercise due diligence on the source and chain of custody, and describe the process in a Conflict Minerals Report (CMR) listed as Exhibit 1.01.

Follow Organisation for Economic Co-operation & Development Guidance

Companies submitting a CMR must conform to a recognized due diligence framework such as the Organisation for Economic Co-operation and Development (OECD)’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. The guidance has become the de facto international standard for responsible mineral reporting and consists of a five-step framework.

The steps are as follows:

  1. Establish strong company management systems.
  2. Identify and assess risk in the supply chain.
  3. Design and implement a strategy to respond to identified risks.
  4. Carry out independent third-party audit of supply chain due diligence.
  5. Report annually on supply chain due diligence.

A CMR should detail how each step of this framework is being met.

Leverage a Third-Party Solution

A third-party supply chain data management solution can provide companies with the tools and resources required to meet their conflict mineral requirements. Assent’s Corporate Social Responsibility Suite allows users to survey suppliers, conduct smelter risk assessments, prepare a CMR and more. For more information, contact us at