Independent Report Reveals Weaknesses in Conflict Minerals Due Diligence

Independent Report Reveals Weaknesses in Conflict Minerals Due Diligence

An independent study recently found 95 percent of corporate conflict mineral policies were not aligned with the Organisation for Economic Cooperation and Development’s (OECD) Due Diligence Guidance for Responsible Mineral Supply Chains. Further, the study noted most company’s responsible sourcing programs did not consider issues beyond tin, tungsten, tantalum and gold (3TGs), or locations outside of the Democratic Republic of Congo (DRC). This is concerning given the expanding scope of responsible sourcing regulations and standards, which require companies to conduct due diligence for an increasing range of materials.

Is your conflict minerals program aligned with the OECD guidance? Can it scale alongside an expanding regulatory environment? Download the Conflict Mineral Handbook to find out.

About the Study

The study, carried by London-based sustainability consulting company Kumi on behalf of the OECD, analyzed the public policies of over 300 downstream companies within the Responsible Minerals Initiative (RMI) industry group. It found most policies aligned with the OECD guidance in terms of ensuring (i) strong management systems and (ii) audit capabilities for due diligence however, as a result of only focusing only on 3TGs, companies exposed themselves to greater risk of not being able to identify additional problematic substances. Therefore, most companies performed poorly in (iii) risk assessment; (iv) risk management and (v) reporting.

The Need for Program Expansion

As the mineral substances, in-scope countries and related definitions associated with responsible sourcing expand and evolve, it is imperative companies have a due diligence program in place that is able to evolve in tandem. In particular, the study suggests companies should look out for changes in a few key areas:

  1. Corporate responsible sourcing programs need to begin thinking beyond 3TGs. This is due to rising concerns surrounding source traceability for mica, copper and cobalt.
  2. Companies are being encouraged to include issues outside of the DRC and adjoining countries, given the OECD considers responsible sourcing to be a global concern requiring a global response.
  3. While the term “conflict” in “conflict minerals” is primarily used in reference to the human rights impacts of mineral sourcing, this term is expected to be expanded to encompass a broader review of issues including the environmental and economic impacts of mineral sourcing.

While most of the policies examined in the study were focused on Dodd-Frank 1502 compliance, the above points highlight the need for companies to widen their responsible sourcing framework to include an evolving list of problematic human rights, environmental and economic issues, along with diverse mineral and material substances, and new geographic locations.

Staying Ahead of A Changing Regulatory Landscape

To prepare for these impending changes, companies need to begin to expand their understanding of – and capacity to respond to – a full spectrum of responsible sourcing obligations. This is where the Assent Compliance Corporate Social Responsibility (CSR) Suite excels. The CSR Suite, which includes a dedicated Conflict Mineral Module, offers a complete, cost-effective solution for compliance with not only conflict minerals, but also human rights, anti-bribery and anti-corruption, and environmental regulations.

The CSR Suite allows you to:

  • Survey suppliers on a range of CSR criteria from one centralized location
  • Assess and validate supplier responses
  • Track compliance from interactive campaign dashboards
  • Mitigate the risk of damage to your company’s reputation
  • Respond to audit requests with agility
  • Quickly adapt and expand your program needs as new concerns are raised around the globe

To learn more about how the CSR Suite and Conflict Mineral Module can strengthen your responsible sourcing program, download the Assent Compliance Platform and Product Suite Guide (free download).

For more information or to speak with our conflict mineral experts, contact