The European Union (EU) has taken a significant step forward in the area of ethical sourcing with the implementation of the EU Conflict Minerals Regulation (Regulation 2017/821), effective since January 1, 2021. This regulation is central to the EU’s efforts in promoting responsible sourcing of minerals, especially those used in manufacturing electronics, automotive, and medical devices. By targeting conflict minerals sourced from conflict-affected and high-risk areas (CAHRAs), the EU aims to prevent the financing of armed conflicts and human rights abuses. This blog explores the compliance requirements of the EU Conflict Minerals Regulation, its implications for companies, and the broader impact on global supply chains.
The EU Conflict Minerals Regulation was enacted to ensure that minerals imported into the EU do not contribute to human rights abuses, such as unsafe working conditions, child labor, and other violations associated with mineral extraction in CAHRAs. The regulation specifically targets tin, tantalum, tungsten, and gold — collectively known as 3TG conflict minerals. These minerals are essential to industries like electronics, automotive, and consumer goods, making them vulnerable to unethical sourcing practices that fund violence in conflict regions. The regulation requires companies to adopt a conflict-free sourcing policy aligned with the OECD Due Diligence Guidance.
Unlike the Dodd-Frank Act in the U.S., which focuses on the Democratic Republic of the Congo (DRC) and adjoining countries, the EU regulation covers a broader geographic range. It encompasses any area recognized as a conflict-affected and high-risk area (CAHRA), which includes regions with unstable governance and areas experiencing political turmoil. This is a comprehensive approach to conflict minerals legislation, aiming to cover more regions affected by armed conflict or weak governance.
EU importers of 3TG are required to conduct due diligence in accordance with the OECD Due Diligence Guidance Conflict Minerals. The due diligence process includes:
Companies must maintain records of their sourcing and due diligence measures for at least five years, ensuring traceability and transparency within their supply chain. This documentation is essential for conflict minerals compliance as it demonstrates adherence to the conflict minerals rules set by the EU.
The reporting requirements for the EU Conflict Minerals Regulation aim to enhance transparency and accountability in mineral sourcing. Key reporting requirements include:
Although both the EU regulation and the Dodd-Frank Act in the U.S. seek to prevent conflict minerals from financing armed conflict, they differ in scope and implementation. The EU Conflict Minerals Directive applies to a broader geographic range and enforces a more extensive due diligence process, integrating conflict mineral compliance into corporate responsibility efforts through the EU Non-Financial Reporting Directive.
The EU Conflict Minerals Regulation applies primarily to EU-based importers of 3TG minerals. However, the regulation impacts both upstream and downstream companies:
Implementing the EU Conflict Minerals Regulation brings both challenges and opportunities for companies:
Acquis provides a comprehensive conflict minerals solution to help companies meet 3TG compliance requirements and manage the complexities of conflict minerals reporting:
Eliminate the uncertainty in your conflict minerals compliance and discover how Acquis can simplify your conflict minerals reporting. Book a demo today to see how our solution can address your unique needs in conflict minerals legislation compliance, allowing you to focus on running your business efficiently.
Take action today to build a responsible, ethical supply chain that aligns with global conflict minerals regulations.
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