Survey Results in on Tulane University Conflict Minerals Regulation Impact Study

Results from a study on companies’ responses to the Dodd-Frank Section 1502 law and the U.S. Securities and Exchange Commission’s (SEC) conflict minerals requirements from the Payson Center for International Development at Tulane University were presented by the study’s lead researcher, Chris Bayer, a Ph.D. candidate. The study was a follow up to Tulane’s initial October 2011 white paper that presented a model estimating the economic impact of the law and proposed rules.

According to the survey, 48 percent of survey respondents felt that Dodd-Frank had not given them confidence that their company was not negatively impacting the Democratic Republic of the Congo (DRC) or surrounding countries.

Fifty-five percent of respondents completed Reasonable Country of Origin inquiries and 41 percent implemented a due diligence system. Forty one percent of companies need to hire outside consultants, with costs ranging from less than $50,000 (56 percent of respondents) to greater than $ 1 million (4 percent of respondents) for non-information technology costs. Expected costs for information technology tasks ranged from less than $50,000 (37 percent of respondents) to greater than $1 million (5percent of respondents) with the median response being $50,000 to $100,000.

Regarding externalities, an overwhelming majority of respondents felt that Dodd-Frank had not leveled the playing field for sourcing outside the DRC region, nor had it resulted in supply chain efficiencies, increased responsiveness, or cost reduction.

Study participants included component and sub-assembly manufacturers, contract manufacturers, OEMs, and a small number of metals processors manufacturing predominantly for the high-tech, electrical, automotive, medical, aerospace, and defense markets.

The study offered the following conclusions:
• Companies are steadily implementing main tasks required to comply with the SEC regulation
• Almost half of the companies are turning to external help with their conflict minerals program
• The majority of companies are opting to build rather than buy
• Companies are synergizing – to varying degrees – with information sharing platforms

See more information on survey results.

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