Conflict Minerals Reporting Best Practices for Complex Manufacturing Companies

As a complex manufacturing company, complying with conflict minerals regulations requires more than just conducting due diligence on your supply chain. It involves effectively collecting, analyzing, and reporting on conflict minerals to meet regulatory standards and promote responsible sourcing.

Overview of Conflict Minerals Reporting Requirements

According to the Dodd-Frank Act Section 1502 in the U.S., publicly traded companies must conduct due diligence on their supply chains and disclose whether their products contain conflict minerals (tin, tungsten, tantalum, and gold – commonly referred to as 3TG minerals). This information must be reported to the Securities and Exchange Commission (SEC) annually, with detailed disclosures on due diligence measures, the country of origin of the minerals, and any actions taken to mitigate risks associated with conflict minerals.

What is a Reasonable Country of Origin Inquiry (RCOI)?

A Reasonable Country of Origin Inquiry (RCOI) is an essential step for companies to trace the origin of 3TG minerals in their products. The inquiry is adaptable to factors such as company size, product range, and supply chain visibility. To satisfy the RCOI requirement, companies must obtain reliable documentation from their suppliers regarding the origin of their 3TG materials, proving that they did not originate in conflict-affected and high-risk areas (CAHRAs) or were sourced from recycled or scrap sources. Ensuring conflict minerals compliance requires that companies diligently verify this information and maintain comprehensive records.

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Standard Procedure for Collecting and Analyzing Conflict Minerals Data

Collecting and analyzing conflict minerals data can be complex and time-intensive, but adopting strategic approaches can simplify the process:

• Utilize Conflict Minerals Reporting Templates (CMRT) The Conflict Minerals Reporting Template (CMRT) is an industry-standard tool for collecting data from suppliers about the sourcing of 3TG minerals. By using the CMRT across the supply chain, companies can efficiently conduct supplier due diligence, ensuring responsible sourcing and compliance with both SEC and EU Conflict Minerals Regulation requirements.

• Identify Relevant Suppliers A critical step in managing supply chain risk is identifying suppliers who may use conflict minerals. This requires a thorough analysis of the entire supply chain, often involving third-party auditors to verify compliance and traceability back to smelters or refiners.

• Due Diligence on Suppliers Once relevant suppliers are identified, companies must conduct due diligence to ensure they are not sourcing conflict minerals from mines associated with forced labor or human rights abuses. This may involve reviewing supplier contracts, conducting site visits, and collaborating with industry groups to enforce responsible sourcing practices.

Best Practices for Reporting Conflict Minerals Information

Effective conflict minerals reporting requires a structured and detailed approach. Here are some best practices to help ensure compliance:

• Conduct a Comprehensive Supply Chain Analysis To accurately identify relevant suppliers, companies should analyze their entire supply chain, utilizing resources like the Responsible Minerals Initiative (RMI). Engaging with third-party auditors and industry groups helps gain transparency into the origin of materials.

• Develop a Robust Due Diligence Program A strong due diligence program is crucial for compliance. This may include conducting regular site visits, requiring suppliers to sign compliance agreements, and promoting best practices within the industry. The OECD Due Diligence Guidance offers a five-step framework for responsible sourcing, which serves as the international standard for ethical sourcing and responsible mineral sourcing.

• Maintain Clear and Detailed Records For SEC reporting requirements, companies must maintain transparent and organized records of their due diligence activities, including documentation on supplier contracts, site visits, and risk assessments. Clear records of these processes not only support compliance but also demonstrate a commitment to ethical supply chain management to stakeholders.

Tools and Resources to Simplify Conflict MInerals Reporting Process

For complex manufacturers, leveraging a third-party supply chain management solution is a valuable way to meet conflict minerals compliance requirements effectively. A robust solution provides deep insights into supply chain risk management and offers tools for supplier engagement and conflict minerals data validation. **

Acquis Conflict Minerals Software Solution** offers a comprehensive approach by

• Automating Data Collection
• Conducting Smelter Risk Analysis
• Centralized Compliance Data Management
• Enhancing Traceability Across the Supply Chain

Speak to our conflict minerals compliance experts to experience seamless responsible sourcing