Conflict Minerals

U.S. Conflict Minerals

In August 2012, the U.S. Securities and Exchange Commission (SEC) finalized conflict minerals regulations that require publically traded companies to report the origin of tin, tantalum, tungsten and gold – conflict minerals – contained in their final products. Electronics manufacturing companies across the supply chain are impacted by this regulation. Even if companies are not publically traded, they will likely have customer requirements that must be met.

IPC has played an integral role in advocating for the least burdensome regulations. As a result of IPC's lobbying efforts, the final rule provides burden relief to the industry by establishing a unified reporting schedule, creating an indeterminate category, implementing a phase-in period, and removing the requirement that a CMR report is required for any recycled or scrap materials contained in a product.

On January 31, 2017, Acting Securities and Exchange Commission (SEC) Chairman Michael S. Piwowar released a public statement directing the SEC staff to consider whether their 2014 guidance is still appropriate and whether any additional relief is appropriate.  The guidance was issued by the SEC after the April 2014 D.C. Circuit Court of Appeals’ finding that a portion of the SEC’s Conflict Minerals Rule violated the First Amendment. In an additional statement, the Acting Chairman raised questions regarding the effects of the regulation, including the negative impacts of a de-facto boycott.

On March 27 2017, the Department of State opened a 30-day comment period seeking input on responsible conflict mineral sourcing. This solicitation for comment follows a 45-day comment period that was provided by the SEC. In soliciting these comments, the State Department may be considering a more active role in ad­dressing the underlying issues in the DRC, either as a supplement to or replacement for the SEC regulations under Section 1502 of Dodd-Frank.

IPC April 28, 2017 Comments to Department of State (attached)

IPC March 16, 2017 Comments to the SEC on Conflict Minerals

European Union Conflict Minerals Legislation

On March 16, 2017, the European Union (EU) Parliament voted to adopt regulations regarding the sourcing of conflict minerals in high risk zones. The regulations, which require supply chain due diligence self-certification of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas, are mandatory for smelters and importers of raw materials and voluntary for downstream manufacturers whose products contain these minerals.

Other provisions in the regulation:

  • The regulation sets volume based exclusions for small companies
  • Metals are defined as ‘metals containing or consisting of tin, tantalum, tungsten and gold
  • The rules do not apply to recycled metals.
  • The Commission will adopt delegated acts to amend the volume thresholds of specific minerals and metals, setting out the criteria and methodology to be followed for that assessment.
  • The EU Commission will establish criteria for recognition of industry supply chain due diligence schemes

The European Union is actively considering their own conflict minerals legislation. The current proposal sets up a voluntary self-certification scheme for firms exercising due diligence over commodity supply chain for gold, tin, tungsten, tantalum and their mineral ores. The voluntary self-certification scheme would require companies to exercise due diligence to demonstrate that their products' mineral components did not finance human rights abuses, and would offer incentives ranging from EU public procurement contracts to funding possibilities for small and medium-sized enterprises (SMEs). The proposed scheme will only apply to companies placing raw materials on the market – such as Europe's 20 or so smelters – and not importers of products.

IPC extensively lobbied the EU Commission, highlighting the difficulties experienced by companies attempting to comply with the U.S. SEC conflict minerals regulations. IPC supports the EU Commission's proposal because it would concentrate on "upstream" actors and avoid imposing an extra burden on industry.

IPC is actively engaged in advocating on behalf of our members. IPC has met with EU Commission officials and submitted extensive comments urging them to proceed cautiously before implementing conflict minerals legislation especially in light of the negative, unintended effects of Dodd-Frank. IPC will continue its advocacy efforts to promote conflict minerals legislation that avoids actions to unduly burdens manufacturing and commerce industries or cause unnecessary disruptions of the minerals trade.

IPC whitepaper on the EU's conflict minerals initiative

More information on the EU's proposal can be found in a recent IPC blog article. Further, Signe Ratso, DG Trade, EU Commission, presented on the EU's proposal at an IPC conference. Her presentation is available to IPC members only. EU's Conflict Minerals Initiative by Signe Ratso, Director, DG Trade, EU Commission

IPC whitepaper on the EU's conflict minerals initiative

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