Section 1502 of the Dodd-Frank Act, also known as the Conflict Minerals Requirement, compels US firms to verify that the proceeds from conflict minerals used in their goods are not helping fund armed groups in the Democratic Republic of the Congo (DRC) and neighboring countries.With survey after survey showing that supply chain visibility remains a challenge for companies, especially for high-tech ones reliant on minerals such as tantalum and tin under scrutiny by Section 1502, Conflict Minerals - How Dodd-Frank Is Impacting the High-Tech Industry helps shed light on the compliance requirements being enforced by the US Securities and Exchange Commission (SEC) and a supply chain verification process that can be implemented by affected companies.
Karen Avery, Business Resiliency Solutions leader for Marsh Risk Consulting (MRC) and one of the authors of the report, notes: "Public companies are really struggling to comply with the multitude of requirements of the Dodd-Frank Act. Section 1502 is of particular concern as the conflict minerals it covers are rare earth minerals vital to a multitude of manufacturing companies, including those in the high-tech industry. With seemingly onerous reporting requirements, and a 2014 deadline approaching, it is essential that companies understand and meet the requirements of the compliance process so they can avoid or reduce the potential for penalties and/or fines."
Section 1502 mandates that high-tech and other affected companies gain visibility into their current supply chain practices and makes them accountable for organizations in their extended supply chain that may be trading in conflict minerals. To comply with the SEC reporting requirements, the following actions must be taken:
- Determine if the regulation applies.
- Identify conflict minerals throughout the value chain.
- Survey suppliers.
- Undertake a reasonable country of origin inquiry.
- Exercise due diligence.
- File reports with the SEC.
MRC's solution covers each step in this process. It relies on a team of experts in evaluating and mapping companies' value chains and helping companies reach decisions on the most appropriate supply chain structure, alternative sourcing options, and risk management measures. The MRC team also includes experts in mining practices around the world and localized supply chain and regulatory consulting services throughout Africa.
To learn more about Section 1502 and the support that MRC can provide clients impacted by its compliance requirements, please access Conflict Minerals - How Dodd-Frank Is Impacting the High-Tech Industry in its entirety below or on the right.