Minerals Sourcing
- IPC and its members deplore the violence and human rights abuses that are linked to minerals extraction in some parts of the world.
- At the same time, we are opposed to heavy-handed regulations that impose undue burdens on our members with little or no results to show for their efforts.
- IPC believes that collaborative, industry-driven approaches – such as those championed by the European Partnership for Responsible Minerals (EPRM), of which we are a member – are the best way to address this issue.
- The IPC Conflict Minerals Data Exchange standard is currently undergoing revisions to incorporate guidance from the Organization for Economic Cooperation and Development (OECD).
European Union Conflict Minerals Legislation
On 16 March 2017, the EU adopted a regulation on “supply-chain due diligence self-certification” for importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas. This regulation is aimed at addressing the link between conflict and the trade of minerals extracted in affected areas.
Under the rule, from 1 January 2021, importers, smelters and refiners of tungsten, tin, tantalum and gold (3TG) will have to carry out mandatory due diligence checks when annual import volumes exceed set thresholds. The regulation applies to all conflict-affected and high-risk areas in the world, thus going beyond the scope of the U.S. Dodd-Frank legislation, which was limited to the Democratic Republic of Congo and several neighboring countries. Two years after the date from which the regulation applies and every three years thereafter, the European Commission will assess the need to draw up additional legislative proposals targeted at downstream companies with 3TG in their supply chain. To that end, the Commission will look at the regulation’s impact on the ground and compliance by EU firms, as well as possible additional mandatory measures.
Leading up to 2021, there are several deliverables the European Commission is working on, including, among others, a non-exhaustive list of “conflict areas”, a transparency database, a handbook for operators, as well as criteria to recognize supply chain due diligence industry schemes.
IPC’s position: IPC supports efforts by public and private stakeholders to reduce human rights violations, violence, and environmental damage in conflict-affected areas. In collaboration with the Responsible Minerals Initiative (RMI), the Automotive Industry Action Group (AIAG), and the Japan Electronics and Information Technology Industries Association (JEITA), IPC has developed a cross-industry standard for the exchange of supply-chain data related to the due diligence of “conflict minerals” in manufactured products. This standard is currently being reviewed for appropriate revisions in accordance with the desire to support voluntary reporting under the EU Conflict Minerals Regulation.
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)