Conflict Metals Requirements Included in Financial Reform Legislation

Electronics manufacturers and their customers are increasingly under pressure to stop the violence and atrocities in the Democratic Republic of Congo (DRC) by eliminating the use of illegally mined tin, cobalt, gold, and tantalum ores, key ingredients in electronics.  Late last week, House and Senate conferees agreed upon modified language for sec. 1502 of the financial reform legislation on conflict minerals, expected to be finalized in the next few weeks.

For the past several years, industry groups, including Electronics Industry Citizenship Coalition (EICC), the Global eSustainability Initiative (GeSI), the International Tin Research Institute (ITRI) Tin Supply Chain Initiative (iTSCi) and the IPC Solder Product Value Council (SPVC), have been working to provide transparency and accountability concerning the supply of raw materials coming from the conflict zones of the Democratic Republic of Congo (DRC). 

Now the U.S. Congress is now poised to implement heavy-handed legislation that is likely to result in total industry divestment from the DRC and adjacent countries — removing an important legitimate source of income in the resource-poor region in addition to clamping down on illegitimate mines.

IPC, other industry associations, and a number of affected companies, have been working with Congress for several months to find a solution that will further the goal of limiting violence in the DRC. Thanks to industry efforts, the final bill is less burdensome and more practical than the original draft. 

Because of relationships established by IPC members with their representatives during Capitol Hill Day, IPC staff was able to rapidly address industry concerns with key House and Senate conferees on the conflict metals language.

Once passed by the Senate and House and signed by the president, the legislation will require companies whose manufactured goods contain tin, tantalum, tungsten, or gold to:

  • Report annually to the SEC (Securities and Exchange Commission) if the minerals did originate from the Congo or adjoining countries. It is unclear what the obligation will be for companies who cannot determine from where the minerals originated. 
  • Submit a due diligence plan with the company’s annual SEC report that includes:

a.     A description of the measures taken by the company to prevent sourcing from the Congo;

b.     A description of the products manufactured or contracted to be manufactured that are not conflict free, the facilities used to process the conflict minerals, the country of origin of the conflict minerals, and the efforts to determine the mine or location of origin;

c.     An independent third party audit of the company’s due diligence plan; and

d.     A certification by the company of its due diligence report (there is no definition of “certify” included in the language so that obligation is vague).

Although reporting requirements only apply to companies required to report to the SEC, it is expected that these requirements will rapidly be passed through the entire supply chain.

The SEC is required to issue regulations within 270 days of enactment of the legislation. IPC will work closely with all member companies to shape the regulatory rule making process.

Upcoming IPC Webinar: The Movement to Ban Conflict Metals: It Can and Will Impact the Electronics Industry

Thursday, July 15 • 10:00 am—11:00 am Central time

This webinar will provide you with an overview of the initiatives to boycott conflict metals and industry and government efforts to address the problem.

What You Will Learn

  • Details of how legislation moving through the House and Senate could require SEC or Customs reporting for all products containing tin, gold, colbalt and tantalum
  • OEM initiatives being organized by the Electronics Industry Citizenship Coalition and the Global eSustainability Initiative whose members include industry leaders Apple, Cisco, Celestica, Dell, Ericson, Foxconn, Flextronics, HP, Huawei, IBM, Intel, Jabil, Motorola, Nokia, Phillips, RIM, Samsung, Sanmina-SCI, Sony, and Sun 
  • Plans for the International Tin Research Institute (ITRI) Tin Supply Chain Initiative to provide transparency and accountability concerning the supply of raw materials coming from the conflict zones of the DRC

About the Instructor

Anthony (Tony) Hilvers is vice president of industry programs for IPC and a registered lobbyist.  He is responsible for IPC’s industry segments including the printed circuit board and electronics assembly management councils, the printed circuit board suppliers council, the surface mount equipment manufacturers council and these councils’ associated events. He is also responsible for IPC’s Market Research, Government Relations and Environmental Policy Departments. 

Co-author of the presentation 

Fern Abrams is the director of government relations and environmental policy for IPC. She is responsible for advocating member positions in the areas of environment, health and safety, as well as tax, trade, intellectual property and other regulatory issues.  Current activities focus on lead-free and other materials restrictions, hazardous waste and environmental reporting and record keeping. 

 

One Comment

  1. Posted July 1, 2010 at 9:26 am | Permalink

    For more information and to view the legislation please visit http://www.ipc.org/minerals


Post a Comment

Required fields are marked *

*
*

%d bloggers like this: