Compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 has been slow in coming on many fronts. Publicly traded companies have confronted the reality of the cost of complying with the conflict minerals reporting rules. A new offering from UL's Information & Insights (I&I) division hopes to help the industry streamline reporting while increasing compliance.
Tulane University Law School's Payson Center for International Development released a study this month that looked at the market impact of Section 1502 of the Dodd-Frank legislation, which applies public disclosure law to conflict minerals, including tin, tantalum, tungsten, and gold. The study found that, as of June 2, issuers had leveraged $709.7 million of in-house and external resources to set up programs to gather and report information under the requirements.
The average issuer invested $545,962 of time and effort to comply with the law, the center said. Issuers with less than $100 million of annual revenue spent an average of $190,330. The expenses were largely related to “in-house corporate time, external human resources, an IT evaluation and IT system expenses.”
Large OEMs are putting pressure throughout their supply chains for organizations to trace and understand the origin of the minerals in their components. In its most recent Supplier Responsibility Progress Report, Apple said it would publicize the names of suppliers that continue to source minerals from conflict regions. Clearly, conflict minerals have taken center stage.
At the same time, the task of tracing and eliminating conflict minerals is daunting at best. “The number and diversity of products that companies manufacture, sell, or design is huge, and the need to understand each of those products, along with the underlying components and subcomponents, is not only a massive task but also incredibly complex,” Ryan Lynch, business development manager for UL I&I, told us.
Last month, his company launched its WERCSmart Conflict Minerals Platform, which includes:
- A SaaS platform that delivers real-time product-attribute intelligence
- Database and decision-support tools for collecting and reporting information from suppliers and to support sourcing decisions
- Assessment tools for vetting products, investigating sources, and monitoring sustainability performance improvement across the supply chain
- Program development and advisory services to help companies design and implement due-diligence practices for sourcing raw materials and complying with traceability requirements
“We've really focused on understanding the information that supply chain professionals, design chain workers, and engineers need when they are building, designing, and sourcing products,” Lynch said. “We want to help our customers improve their supply chain and be in a better position to make and defend claims about the products they are making.”
UL is hoping to create a solution that is cost effective and simple to use for small and midsized organizations being impacted through relationships with large organizations. “A lot of companies have established policies and procedures but have had a hard time gathering information,” Lynch said. “It has been done spreadsheet and email.”
Let us know how your organization is tackling conflict minerals compliance in the comments section below.