Conflict Minerals Compliance Clock Ticks Away – Time’s Up
Corporations Should Have Comprehensive, Audit-Traceable Reporting Procedures in Place by Dec. 31; Supply Chain Risk Management Firm Source Intelligence® Urges Action Now for 2015 Reporting
CARLSBAD, CA, July 25, 2014 /3BL Media/ – The two-year grace period for U.S. conflict minerals reporting requirements for large companies ends in less than six months, posing a significant challenge for the nearly 98 percent of companies that recently indicated they could not fully determine whether their products or components contained “3TG” conflict minerals, a leading supply chain management firm announced today.
According to conflict minerals compliance filings in June 2014, most companies subject to the disclosure requirement of the SEC’s Dodd-Frank Act indicated they knew very little about whether their products or components contain tin, tungsten, tantalum or gold — dubbed “3TG” materials — from mines in the Democratic Republic of Congo (DRC) or adjoining countries. The U.S. and other countries have mandated conflict mineral reporting as a way to stymie the sale of these minerals to fund armed conflict in the DRC.
“As many companies discovered earlier this year, the process to thoroughly investigate highly complex supply chains can be cumbersome, tedious and overwhelming,” said Jess Kraus, CEO of Source Intelligence. “Today, just weeks after the first filing milestone, we are concerned that many companies don’t recognize that the clock is ticking – they have less than six months to figure this out in order to have their systems in place by the beginning of the next reporting year.”
“At the start of 2015, companies must have in-place the comprehensive processes and verification procedures in order to make authoritative declarations about their supply chains,” he added. “For the world’s largest brands, the grace period allowed by the SEC ends this year.”
Kraus said tracing raw materials back to the source can be overwhelming for many companies, but with sufficient lead time they can establish the systems and verification processes they’ll need to meet reporting rules for 2015 and beyond.
“Companies may be working with as many as 10,000 first-tier suppliers. Behind those suppliers are thousands more, further up the supply chain and spread out in a global web of routes and transactions,” Kraus said. “The task of tracing and verifying the original materials used in a product can be daunting and consume significant resources at a company. It’s not impossible, but does require sufficient lead time.”
Source Intelligence®, a California-based global supply chain risk management company offering next generation supplier compliance and engagement tools, is a leader in data collection, data assurance and data validation for thousands of companies who are subject to the Dodd-Frank Act and/or seek transparency in their supply chain for all regulated materials. Through sophisticated technology, unique verification techniques, multi-language supplier engagement teams and investigative experience, Source Intelligence has provided companies comprehensive source reports involving thousands of suppliers of raw, intermediate and finished goods.
For reporting year 2013, as a third-party provider of supply chain compliance solutions, Source Intelligence provided companies the ability to file detailed and comprehensive conflict minerals reports – in many cases with some of the highest completion rates, according to SEC filings.
Lina Ramos, Chief Business Officer
Denis Wolcott, The Wolcott Co.