As companies prepare their first required reports on conflict mineral use to the U.S. Securities and Exchange Commission, the SEC, key investors and human rights groups have released a paper that sets expectations for the contents of the inaugural reports required by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
As companies prepare their first required reports on conflict mineral use to the U.S. Securities and Exchange Commission, the SEC, key investors and human rights groups have released a paper that sets expectations for the contents of the inaugural reports required by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Expectations for Companies’ Conflict Minerals Reporting describes the content that responsible investors and human rights advocates expect to see in a company’s Specialized Disclosure Form and/or Conflict Minerals Report. These disclosures will include information on the use of minerals sourced from the Democratic Republic of the Congo or neighboring countries, where egregious human rights abuses linked to the mining industry have plagued the region for 15 years.
“Investors would like to see their companies establish baselines the first year and specify the steps they are taking so we can then measure improvements in transparency and accountability reporting over time," Patricia Jurewicz, Director of Responsible Sourcing Network and co-author of the paper, says. "Our paper provides a set of specific indicators that can be tracked to allow for comparability between annual reports.”
Both Responsible Sourcing Network and the Enough Project, authoring organizations of the paper, engaged with the SEC throughout the process of defining the reporting requirements for section 1502, which began in 2010.
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Darren Fenwick, Senior Government Affairs Manager at the Enough Project and co-author of the paper, says:
“Advocates for a clean minerals trade wish to understand how issuers, who are connected to the Congo through mineral sourcing, are addressing their connection to the conflict that has resulted in millions of deaths. Additionally, companies whose reports show compliance benefit from positive public sentiment and increased brand recognition.”
The paper details the expectations for companies’ successful reporting, including:
- Constructing key elements of a vigorous internal conflict minerals policy and steps for implementing a program
- Metrics that companies should track to effectively determine their actions to accurately assess the origin of their minerals
- Commitment to only using minerals from smelters that have been audited as conflict free by a credible program such as the Conflict-Free Sourcing Initiative as they become available
- Building a clean minerals trade by 1) Committing to sourcing conflict-free minerals from Congo and the surrounding region; and 2) Implementing OECD due diligence processes to determine if an issuers’ minerals are contributing to the conflict
Stakeholders also encourage companies to take compliance beyond the 1502 reporting requirements to help create a peaceful and secure Congo by participating in diplomatic efforts and contributing to alternative livelihood projects in the region.
In an effort to facilitate proper transparency around the potential sourcing of conflict minerals, global supply chain sustainability site Ecodesk launched a monitoring tool for businesses to track conflict mineral use in supply chains earlier this summer.
Published Sep 5, 2013 6pm EDT / 3pm PDT / 11pm BST / 12am CEST