Supply Chain
CFSI Helping Companies Comply with New EU Conflict Minerals Legislation

The Conflict-Free Sourcing Initiative (CFSI) today announced it is available to help companies navigate compliance with the pending conflict minerals legislation recently voted on by the European Parliament.

In addition, the CFSI says it is adopting a risk-based approach to its audit program to bolster audits of smelters and refiners of tin, tantalum, tungsten and gold worldwide.

The draft EU legislation on conflict minerals requires importers and processors of tin, tantalum, tungsten and gold to self-certify via independent, third-party due diligence audits of smelters and refiners that their products do not directly or indirectly finance conflict and serious human rights abuses.

Downstream” companies that use tin, tantalum, tungsten and gold in manufacturing consumer products also will have to provide information on the steps they take to identify and address risks in their supply chains with regard to conflict minerals. Companies that import and process ores can use existing industry programs such as the CFSI Conflict-Free Smelter Program (CFSP) to fulfill this requirement, and companies that manufacture consumer products can rely on these certifications from industry programs to make informed sourcing decisions.

The new EU legislation recognizes OECD Due Diligence Guidance, which recommends independent third-party audits at identified points in the supply chain. The CFSP claims to be the only existing industry program that audits tin, tantalum, tungsten and gold smelters and refiners for conflict minerals sourcing, which will enable responsible sourcing to continue under the new rules.

The CFSI is developing a risk methodology to help member companies make conflict-affected determinations under the new law. Although the CFSI has traditionally focused on the Democratic Republic of the Congo and surrounding areas to meet Dodd-Frank Act requirements, the organization says it recognizes that conflict and its connection to mineral sourcing is not limited to central Africa and is updating its protocols to accommodate an expanded definition of “conflict-affected and high risk.”

The CFSI will require smelters and refiners to assess their sourcing’s impact and make a credible determination, based on internationally recognized methods, on whether their sourcing patterns risk financing conflict and serious human rights abuses.

The CFSI recently published its new Conflict Minerals Reporting Template (CMRT 4.0), a multi-industry tool designed to facilitate transfer of information throughout the supply chain in support of conflict-free sourcing. It is widely used by companies to survey their supply chains, understand which smelters and refiners are being used, and from where they are sourcing materials. CMRT 4.0 includes an updated Standard Smelter List and numerous translation improvements.

In January 2014, CFSI called on more companies to join over 120 businesses from seven different industries to become conflict-free. Shortly thereafter, the organization reported that it had validated conflict-free smelters or refiners of all four conflict minerals for the first time in its five-year history, and called on more smelters and refiners to join the effort to become conflict-free by undergoing CFSI’s conflict minerals audit.

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