Conflict Minerals Filings Show Challenges for Companies Without Global Database, Independent Verification Systems
CARLSBAD, CA : The world’s largest brands in the electronics, retail, apparel, oil and gas and manufacturing sectors counted on global leader Source Intelligence for comprehensive supply chain data management to trace the source of raw materials (3TG) used in their products for conflict minerals reporting to the SEC.
Under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, publicly traded companies based in the United States must report whether they use conflict minerals – gold, tungsten, tantalum and tin (3TG) – from the Democratic Republic of the Congo and neighboring war-torn countries.
Source Intelligence (SI), the “LinkedIn” of Supply Chain, was the most listed third-party investigative and verification resource in conflict minerals SEC filings by publicly traded companies. This represents close to 40 percent of all filings listing third-party vendors by name.
To date, over 1,260 of the approximately 6,000 companies required to file for reporting year (RY) 2014 with the SEC have actually done so. Only 47 percent of filers mentioned their supplier response rates, 32 percent listed smelters and 6 completed an Independent Private Sector Audit (IPSA), indicating challenges in assembling and verifying supplier information, and more importantly, suggesting a need for improvement across the remaining filers. Additionally, the grace period for “undeterminable” reporting expires for large companies in RY 2015 which will likely lead to increased scrutiny of filings by government officials and NGOs.
The conflict minerals issue has prompted thousands of companies to investigate other areas of their supply chain to ensure they are meeting ever-expanding social and environmental standards worldwide. Source Intelligence, for instance, is assisting companies in ensuring suppliers are providing materials and products without political corruption or slavery issues.
“Brands utilizing our proprietary verification system and robust network of suppliers are now able to make definitive declarations about conflict minerals sourcing and provide additional transparency to their stockholders, customers and regulatory agencies,” said Jess Kraus, CEO, Source Intelligence.