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UL Supports OEMs in Conflict Mineral Reporting Efforts

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

(Image: UL)

(Image: UL)

“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.

9 comments on “UL Supports OEMs in Conflict Mineral Reporting Efforts

  1. Susan Fourtané
    October 15, 2014

    Conflict minerals is a long due issue. It's nice that it's taken a more front seat now. Apple's initiative of reporting them is good and will have a good impact. Others might do the same.

    -Susan 

  2. ahdand
    October 15, 2014

    @Susan: Well true it's a good start by Apple to show the world that they care about other factors than just business. It can be an indirect marketing tool but still has created a good impact

  3. Daniel
    October 16, 2014

    “Well true it's a good start by Apple to show the world that they care about other factors than just business. It can be an indirect marketing tool but still has created a good impact”

    Nimantha, you are right and in many cases Apple is able to set industrial standards and guidelines. They proved it ones with Foxconn, when Chinese labour exploitation news spread.

  4. Daniel
    October 16, 2014

    “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.”

    Hailey, it's a good initiative from Apple. Actually what's the requirement for such evidences? It's all are internal/back end matters. When it comes as a product customers are not concerned about the whereabouts; for them quality and functionality of products are important.

  5. Susan Fourtané
    October 16, 2014

    Nimantha, 

    Apple cares about other things, too, not just business. Apple has one of the best environmental policies and recycling programs. Apple doesn't do marketing of any kind. They don't need to waste time and money in marketing. 

    -Susan

  6. Hailey Lynne McKeefry
    October 20, 2014

    @Susan, I think we will see more big OEMs jump on the bandwagon. It's a great story from a PR point of view–and that does make a difference.

  7. Hailey Lynne McKeefry
    October 20, 2014

    @Jacob, the thing about the conflict minerals reporting is that organizations have to report what they know about whether they are buying products from conflict mineral countries. THey need to make a good effort to find out. However, over time, we'll see what all of this means in practical terms. What is a good effort? Will organizations stop using these sources rather than have to report that they are using them? I don't know.

  8. Daniel
    October 21, 2014

    “the thing about the conflict minerals reporting is that organizations have to report what they know about whether they are buying products from conflict mineral countries. THey need to make a good effort to find out. However, over time, we'll see what all of this means in practical terms. What is a good effort? Will organizations stop using these sources rather than have to report that they are using them? I don't know.”

    Hailey, thanks for the clarification. The advantage is others can know the real source and from where they can source good raw materials.

  9. Susan Fourtané
    October 22, 2014

    Hailey, 

    Yes, I agree. It helps when there is a PR point of view.

    -Susan

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