In May 2014, the Dodd-Frank Act will make conflict mineral disclosure mandatory. Most organizations are on board with adhering to the requirements but may be confused about the best way to proceed.
“The deadline is quickly approaching, and that's driving a lot of concern about getting conflict minerals figured out,” Chris Caldwell, president and CEO of the risk and compliance application provider LockPath, told EBN. “Every company wants to do the right thing and properly report and assess its use of conflict minerals. Clarity is coming to the market, and now it's about execution.”
Though Dodd-Frank impacts only publicly traded companies, which number about 6,000, but will also impact all the organizations in the supply chain of those public companies.
Perhaps the most confusing element for many organizations is looking within the supply chain to figure out which partners use conflict minerals, how those materials are being used, and which industries are affected. The key is creating a successful supplier program. Michael Rasmussen, founder of GRC 20/20 Research, offers the following framework for creating such a program.
- Ownership : Designate a specific person to take responsibility for the organization's conflict mineral compliance program.
- Collaboration : Encourage every department and organization role, including supply chain management, procurement, corporate compliance/ethics, and legal, to get involved in the program.
- Policies, procedures, and training : Create a corporate code of conduct that describes the organization's ethics and values in relation to human rights within its operations and supply chain.
- Understanding the organization's products : Catalogue the organization's products and break out all the materials used in producing them to determine which ones use relevant minerals.
- Assessment : Drill into the supply chain to get to the smelter and mine.
- Due diligence : If minerals from affected areas are found in products, determine whether the minerals are connected with armed militias.
- Audit: Examine the organization's Conflict Mineral Report to ensure its accuracy and integrity.
- Reporting: File disclosure forms for the SEC, including a Conflict Mineral Report.
- Remediation: When an issue is found, remove facilities from the supply chain.
We've invited Rasmussen to be our guest in an online chat about this topic. We'll be gathering in the EBN chat area on Thursday, Sept. 12, at 2:00 p.m. ET/11:00 a.m. PT. Come on by, and invite your colleagues to join us with their most pressing questions.