+ All Categories
Home > Technology > CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Date post: 27-Dec-2014
Category:
Upload: tord-dennis
View: 249 times
Download: 0 times
Share this document with a friend
Description:
The objective of the US Security and Exchange Commission’s (SEC) conflict minerals law is to draw attention to natural resources in electronics supply chains that have funded armed conflicts and human rights violations throughout the world. Learn how your company is impacted, and how you can elevate your supply chain integrity and transparency for regulatory compliance with recent legislation. Given at the Council of Supply Chain Management Professionals (CSCMP) 2014 Annual Global Conference http://cscmp.org/
21
Conflict Minerals in Your Supply Chain Tord Dennis Practice Leader [email protected] http://www.wspgroup.com /
Transcript
Page 1: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Conflict Minerals in Your Supply Chain

Tord Dennis

Practice Leader

[email protected]

http://www.wspgroup.com/

Page 2: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

What is the Conflict Minerals Rule?

TinTantalum

Gold

• The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in July 2010

• The SEC published the final conflict minerals rule in August 2012

• Final rule took effect beginning with the 2013 calendar year

• Conflict minerals are tin, tantalum, tungsten, and gold (and their derivatives) commonly known as 3TG

• Companies must conduct a reasonable country of origin inquiry (RCOI) to identify source of conflict minerals

• Disclosure to the SEC using Form SD must be completed by May 31 for previous year

• May need to include Conflict Minerals Report (CMR) and an independent private sector audit

Tungsten

Page 3: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

What does this mean to you?

• Do you file with the SEC?• Does your customer file with the SEC?

Page 4: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

What are you expected to do?

• Do you have conflict minerals in your product?• If so do they come from the DRC or “covered countries?”

Page 5: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Conflict Free Sourcing Initiative

• Consortium of more than 200 companies from seven different industries

• Runs regular workshops on conflict minerals issues and contributes to policy development and debates with leading civil society organizations and governments

• Provides a range of tools and resources including the Conflict-Free Smelter Program, the Conflict Minerals Reporting Template (CMRT), Reasonable Country of Origin Inquiry data and a range of guidance documents on conflict minerals sourcing

http://www.conflictfreesourcing.org/

Page 6: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Conflict Minerals Reporting Template (CMRT)

• Formerly known as the EICC/GeSI template

• The Conflict Minerals Reporting Template is a free, standardized reporting template developed by the CFSI

• The template also facilitates the identification of new smelters and refiners to potentially undergo an audit via the CFSI’s Conflict-Free Smelter Program

• For 2014 data / 2015 SEC filings download CMRT 3.01 (May 2014) from http://www.conflictfreesourcing.org/

Page 7: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

What should you do next?

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171484002

• Download and review the Final Rule• Consult with your Legal department• Begin developing a Due Diligence plan

Page 8: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Step 1: Applicability

Step 2: RCOI

Step 3: Due Diligence

Reporting: Form SD/ CMR/IPSA

Flow Chart from Final Rule

Page 9: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Do you have to file?

• STEP 1:APPLICABILITY

Rule applies to companies that file with SEC under Section 13(a) or 15(d) of the Securities Exchange Act (publicly traded companies, foreign private issuers)

However, suppliers to reporting entities will be affected by rule

Rule applies if conflict minerals are “necessary to functionality or production of a product”

Conflict minerals must be present in product

Intentionally added and not background concentration

Rule applies if a product is “manufactured or contracted to be manufactured” by a company

Focus is on whether entity has actual influence over the manufacture of product

- Branders of third party products potentially excluded

- Retailers may be excluded

Consult with your Legal department

Page 10: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Do you have any Conflict Minerals in your Products and where do they come from?

• STEP 2: RCOI

SEC final rule indicates that scope of RCOI must be conducted in good faith and “reasonably designed” to determine whether the conflict minerals originate from DRC or an adjoining country (“covered countries”)

The scope of the RCOI will depend on your company’s size, products, and supply chain, but the rule provides some guidance:

Representations, directly from facility at which conflict minerals were processed or indirectly through immediate suppliers (if reasonably reliable) are ok

“Conflict free” designations from a recognized industry group audit program are ok

Scrap and recycled content is exempt

Inquiry does not need to cover 100% of suppliers

Page 11: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

What Level of Due Diligence is required for Compliance?

• STEP 3: DUE DILIGENCE

Must conform to a nationally or internationally recognized framework

­ Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance is cited by SEC as meeting this requirement

Each company’s due diligence process will reflect the company’s unique circumstances

Independent Private Sector Audit (IPSA), if required, is a critical component

Effective due diligence will flow from a written plan; it will be difficult to demonstrate knowledge in absence of good data

Page 12: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Reporting

• File Disclosure with SEC by May 31 each year (if required)

• Form SD if RCOI or due diligence determines conflict minerals are not from covered countries or are from recycled or scrap sources (no CMR)

• Form SD + CMR (as exhibit to form) if conflict minerals originated from covered countries and are not from recycled or scrap sources

• Majority of issuers will have to complete a CMR

• Independent private sector audit (IPSA) may be required

• Audit is expected to address conformance with established framework and implementation of due diligence process

• End to end consistency of due diligence with a defined process (e.g., in a due diligence plan) is key to avoiding audit failures

• Post disclosure on company’s external website (include web address in filing)

Page 13: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Dedicate a Project Manager!

Decide on roles/responsibilities for compliance and align internally

Develop a written Due Diligence Plan and a roadmap covering RCOI, due diligence implementation, and reporting

Document in the Due Diligence Plan what is “reasonable” for your company and supply chain and/or what is REQUIRED by your customer

Add a “conflict minerals” policy to supplier contacts

Use available tools such as the CMRT Version 3.01 (May 2014)

Focus the scope of the RCOI

Initiate the RCOI with your direct suppliers

­ Focus on “company level” reporting but keep in mind that many companies are already focusing on “product level” reporting

­ Focus on suppliers with parts most likely to contain 3TG

­ Set a clear drop-dead deadline for responses

Compare smelters with those on “approved” lists such as the CFSI’s “Conflict-Free Smelters & Refiners” list - http://www.conflictfreesourcing.org/

 

Suggested Best Practices to meet the 2015 Filing Deadline

Page 14: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Do not underestimate the length/depth of your supply chain

Do not overestimate the accuracy of your supply chain info

The longest part of the process is waiting for your suppliers to respond – you can’t control this

Distributors can be a dead-end

Don’t rely completely on software

Leverage industry knowledge

Points to note

Page 15: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

This issue is not going away

Start today

CMRTs are required for each calendar year

SEC requires record retention for 7 years

Prepare a Due Diligence plan and identify internal resources

Add conflict minerals clauses to supplier terms and conditions

Source from conflict-free smelters

Encourage your smelters to join the Conflict-Free Smelter Program (CFSP)

View filings for the 2013 reporting period

Summary

Page 16: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Conflict-Free Smelter Program

http://www.conflictfreesourcing.org/

Page 17: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Conflict-Free Smelters & Refiners

http://www.conflictfreesourcing.org/

Page 18: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

WE PLAN, DESIGN, ENGINEER AND MANAGE BUILDINGS, TRANSPORT, INFRASTRUTURE, INDUSTRIAL, ENVIRONMENTAL, AND ENERGY PROJECTS

WHO IS WSP?

BUILDINGSFrom achieving the highest levels of sustainable design to creating inspirational spaces in a cultural buildings and designing iconic landmark structures: buildings are for people.

ENERGYFrom efficiency programs, to front end design, engineering and project management, we help to reduce energy demand and deliver future energy schemes to help create a sustainable future.

INDUSTRYWe help our clients to maximize industrial assets, improve efficiencies and translate the latest process technologies into workable designs – whatever the field or the scale of their operations.

ENVIRONMENTALWe help to manage environmental, sustainability and climate change issues to reduce risk, optimize opportunities, create competitive advantage and deliver responsible and sustainable businesses

MININGWe support operations throughout the life of a mine with expert advice from ore evaluations during exploration through rehabilitation plans for mine closures and everything in between.

TRANSPORT AND INFRASTRUCTURE

With over 5000 transportation and infrastructure professionals employed worldwide, our reputation as one of the foremost transport and infrastructure specialists has been developed over many successful global projects.

17,500EMPLOYEES

WORLDWIDE

$180.6M EBITDA*

$1.7 B n2013 Net Revenues

*Excluding restructuring charges

Page 19: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

WSP’s Conflict Minerals Services

Trusted advisors on conflict minerals requirements providing pragmatic business strategies for product compliance & supply chain management

• Support “end to end” conflict minerals process including: strategy development, country of origin inquiries, supplier data collection & risk assessment

• Strong industry background in materials sciences and supply chain engagement to collect and interpret complex data

• Due diligence experts: prioritize suppliers for due diligence, document due diligence per plan, etc.

• Prepare outbound Conflict Minerals Report Template (CMRT)

• Support Conflict Minerals Report (CMR) and Form SD preparation

Page 20: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Don’t Forget to Complete the Evaluation!

Download the conference app and rate this session.

Start by choosing: “Cornerstones and Tracks” on the main menu and follow the prompts to this session’s landing page.

Page 21: CSCMP 2014: Conflict Minerals in your Supply Chain - Tord Dennis (WSP)

Conflict Minerals in Your Supply Chain

Tord Dennis

[email protected]

http://www.wspgroup.com/


Recommended