Conflict Minerals Reporting: Coming to a Parliament Near You

Conflict mineralsAt Active-PCB Solutions we purchase large quantities of components and materials that contain metals such as tin and tantalum. We believe strongly in the need for responsible and ethical sourcing of all the materials we use, and encourage our supply-chain partners to uphold the same values.

Since the Dodd-Frank Wall Street Reform and Consumer Protection Act came into force in 2014, the sourcing of tin and tantalum, as well as gold and tungsten, has come under increased media scrutiny. Section 1502 of the Act aims to shut down the trade in conflict minerals: the violent plundering of ores in poverty-stricken areas such as the Democratic Republic of Congo (DRC), and their illicit sale into world markets to fund the activities of militias.

The Dodd-Frank legislation requires companies listed on the US stock exchange to disclose the sources of any gold, tantalum, tin or tungsten in their products. Since the US is such an important part of the global electronics industry, organisations all over the world supplying products such as ICs, connectors, tantalum capacitors, solders and related products, must be able to provide the information US customers need to demonstrate compliance. The Act has drawn criticism from some, who say it is excessively burdensome on commercial companies. It has also been challenged, with mixed results. Moreover, opinion is divided as to whether the legislation will have the desired effect, without also disadvantaging legitimate mining activity in the affected regions.

The US legislation is just one of several initiatives that are ongoing, seeking to stop the many abuses that go hand in hand with the conflict minerals trade. The Organization for Economic Co-operation and Development (OECD) has for some time been building international co-operation to help with responsible sourcing of minerals. It has published the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Second Edition, which provides a framework for companies that are required to file a conflict minerals report. In fact, the Dodd-Frank legislation recognises the OECD guidance and encourages companies to refer to it when establishing their due diligence practices.

The European Union will soon introduce its own conflict minerals legislation. The European Commission is working on proposals to set up a voluntary self-certification scheme for companies exercising due diligence in their supply chains. The European Parliament still has to vote on the proposals, and may require amendments. Compared to Dodd-Frank, the resulting legislation is expected to be less burdensome for companies, in terms of demonstrating compliance. The IPC has been lobbying on behalf of the electronics industry, having also played a role in encouraging burden relief during drafting of the Dodd-Frank Act. The IPC broadly supports the European Commission proposals, and has published a white paper on the EU conflict minerals initiative.

At Active-PCB, we hope the legislation enacted will place a manageable burden on industry. More importantly, we support the primary objective, which is to end the tyranny of the conflict minerals trade and the wars that are funded from its proceeds.