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.
Milwaukee Journal Sentinel: Conflict Minerals Rule Could Prove Costly
When adopting the final rule, the SEC estimated that the initial cost of compliance for the first year would range from $3 to $4 billion for all affected companies and $200 to $600 million each year thereafter. Accordingly, many companies have decided not to source any conflict minerals from the DRC or its neighboring countries because of the costs and burdens of sourcing from there (see our earlier blog post Unintended Consequences of the Conflict Minerals Rule for additional insight). The Milwaukee Journal Sentinel reports that for global companies like Harley Davidson Inc., Johnson Controls Inc. and Modine Manufacturing Co., the conflict minerals rule could serve very costly when tracking down each of their hundreds of suppliers. Modine Manufacturing’s Vice President, Secretary and General Counsel, Peggy Kelsey, stated, “It’s our absolute expectation” that they [suppliers] not use them [conflict minerals from the covered countries].
For more on Milwaukee Journal Sentinel’s story and the effects the conflict minerals rule is having on global companies, please see Conflict Region Mineral Rule Could Prove Costly for Manufacturers.
Hisco Conflict Minerals Policy
Hisco, Inc., a Houston-based leader in supply chain solutions, recently released its conflict minerals policy. Excerpts from the policy follow. “It is Hisco’s intent to support our vendor partners’ and customers efforts to comply with section 1502 of the Dodd–Frank Wall Street Reform and Consumer Protection Act. Customers should refer directly to the manufacturer for conflict mineral inquiries. Hisco representatives can assist customers in contacting manufacturers to obtain information, but in no situation should a Hisco representative make statements or claims on behalf of the manufacturers regarding their policies on conflict minerals.”
For Hisco, Inc.’s entire conflict minerals policy, please see Hisco Conflict Minerals Policy.
STAND Canada Launches Conflict-Free Canada Initiative
STAND Canada, founded in 2005, is the leading organization for youth led anti-genocide activism. Recently, it partnered with The Enough Project to launch the Conflict-Free Canada Initiative. STAND Canada’s goal for the initiative is highlighted on its website: “The Conflict-Free Canada Initiative aims to educate and raise awareness among the Canadian public about the issue of conflict minerals, in order to urge corporations and policy makers to adopt legislation that will demand due diligence from companies that source these minerals for their products.”
Canada is not the only country or government under pressure to adopt a conflict minerals rule similar to that of the United States. Earlier this year, we highlighted that the European Union is under pressure to adopt a conflict minerals as well.
For more on STAND Canada’s Conflict Free Canada Initiative, please see The Conflict Free Canada Initiative.
Johnson Controls Inc. – Conflict Minerals Policy Statement
Johnson Controls Inc. is a global diversified technology and industrial leader. Johnson Controls Inc. recently released its conflict minerals policy. Excerpts from the policy follow. “We support ending the violence and human rights violations in the mining of certain minerals from a location described as the ‘Conflict Region’, which is situated in the eastern portion of the Democratic Republic of the Congo (DRC) and surrounding countries. [Our commitment is] to not knowingly procure specified metals that originate from facilities in the ‘Conflict Region’ that are not certified as ‘conflict free’.” In addition, we will “[e]nsure compliance with these requirements, and ask our suppliers to undertake reasonable due diligence with their supply chains. If we discover the use of these minerals produced in facilities that are considered to be ‘non-conflict free’, in any material, parts or components we procure, we will take appropriate actions to transition product to be ‘conflict free’.”
For Johnson Controls Inc.’s complete conflict minerals policy statement, please see Conflict Minerals Policy Statement.