May 17, 2013 – May 24, 2013
The summaries provided in this Weekly Recap do not necessarily represent the views of Squire Sanders (US) LLP and should not be deemed to be endorsements of them. The Recap is intended to be a compilation of articles and events to encourage discussion within the conflict minerals community and to keep our readers updated on the most recent developments.
Ovako Provides EICC-GeSI Conflict Minerals Reporting Template
Ovako, a European producer of engineering steel, released its EICC-GeSI conflict minerals reporting template. Coupled with its release, Tom Erixon, President and CEO of Ovako, stated, “Ovako is committed to sourcing responsibly and considers mining activities that fuel conflict as unacceptable. Ovako’s efforts related to conflict minerals are aligned to the work of the Electronic Industry Citizenship Coalition® (EICC®) and Global e-Sustainability Initiative (GeSI). In accordance with the Non-Conflict Minerals Act, By U.S. law H. R. 4173, section 1502, scrap and alloying elements purchased from our providers are neither produced from a conflict material (3T&G), nor has its origin from a conflict region.”
Corporate Compliance Insights: Companies Should Not Delay Compliance with Conflict Minerals Rule Reporting Requirements
Mr. James A. Losey, a partner in Thompson Hine LLP’s Washington D.C. office, with the aid of David J. Townsend, recently wrote a FAQ in Corporate Compliance Insights concerning conflict minerals compliance.
Some of the questions in the FAQ include:
- The conflict minerals rule is being challenged in court. Shouldn’t my company wait and see the results of this litigation before undertaking potentially time-consuming compliance efforts? Mr. Losey asserts that “companies should not delay implementation of compliance measures on the assumption that the petitioners may win in NAM v. SEC.”
- Should companies simply avoid all conflict minerals from Central Africa? Mr. Losey states that the answer to this question depends on a company’s individual circumstances.
- Can I rely on a certificate of origin (custom purposes) for conflict minerals rule reporting purposes? Mr. Losey states that a company cannot, as the country of origin determinations are entirely different under the conflict minerals rule and customs law.
Flock: How Congress is Using the Congo to Weaken Dodd-Frank
On Tuesday, May 21, 2013, the U.S. House Financial Services Committee’s Subcommittee on Monetary Policy and Trade held a hearing on “The Unintended Consequences of Dodd-Frank’s Conflict Minerals Provision.”
Elizabeth Flock of the U.S. News and World Report highlighted the hearing in her latest article titled, “How Congress Is Using the Congo to Weaken Dodd- Frank.” Ms. Flock noted Representative Bill Huizenga’s (R-MI) concern that the conflict minerals rule had created a de facto embargo on the Democratic Republic of Congo and surrounding areas.
Ms. Flock then turned her attention to human rights groups who are questioning the validity of the Committee’s concern. She quotes Ms. Sasha Lezhnev at the Enough Project who stated, “If you look at the Congressional committee holding the hearing, they have a track record of going after every Dodd-Frank provision.”
We watched the full Committee hearing on Tuesday and it did prove to be interesting, but as we predicted prior to the hearing, it did not result in a consensus view. It is unclear what the House Committee will do in response to the concerns about the unintended consequences of the rule. But, we will continue to watch and will report any actions that the Committee takes relating to the conflict minerals rule.
Tungsten Associations Form Compliance Framework
As reported by Medal Powder Report, “a group of tungsten refiners has established an initiative for industry members to demonstrate their compliance with the SEC’s ruling on conflict minerals.”
The Medal Power Report further states, “[t]he group is supported by the International Tungsten Industry Association (ITIA) in the US and the Refractory Metals Association (RMA) has formed the Tungsten Industry Conflict Materials Council (TI-CMC) to set out the initiative. They plan to provide assurances [sic] the tungsten supply chain that conflict minerals, as defined in the regulations, processed at the smelter/refinery level are in compliance with those regulations. The initiative offers a straightforward approach for firms that must make declarations on their supply chains. It is based on the idea that refiners, pivotally positioned as they are in the tungsten supply chain, can best determine the source of tungsten materials made available to the global marketplace.”
This action by the ITIA is a very positive step as there are currently no tungsten smelters included on the CFS list. This is one more example of industry groups playing a powerful role in conflict minerals compliance.
For more information regarding the compliance framework, please see “Tungsten Associations Form Conflict Minerals Legislation Compliance Framework.”