March 22, 2013 – March 29, 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.

Leader of Squire Sanders’ Conflict Minerals Team Quoted in Crain’s Cleveland Business

Dynda A. Thomas, leader of the Squire Sanders’ conflict minerals team and frequent contributor to the blog, was recently interviewed in Crain’s Cleveland Business concerning the cost of complying with the conflict minerals rule.

Ms. Thomas advises that even though the Form SD filing date for calendar year 2013 is not due until May 31, 2014, reporting companies should really be working on conflict minerals compliance now. Ms. Thomas then goes on to address the consequences of the rule. In regards to the intended consequences, Ms. Thomas states, “[t]he assumption is that public disclosure by you of that information … could lead to your customers saying, ‘I don’t want to deal with your company.'” Ms. Thomas then addresses the unintended consequences of the rule, stating, “Companies are motivated to avoid purchasing conflict minerals from the covered countries because of the extra expense and cost and work involved in having any minerals come from a covered country,” and that hurts the very people (the legitimate distributors of minerals) that the rule was intended to help.

Marybeth Shamrock, a managing director of KPMG LLP’s Cleveland office, echoed Ms. Thomas in regards to the importance of complying with the rule. Ms. Shamrock stated, “You don’t want to be the one on the Today show: Cleveland company supports warlords.”

Taras Szmagala, vice president and deputy general counsel of Eaton Corporation, highlighted the compliance burden the conflict minerals rule has on companies like Eaton Corporation. He stated, “The regulation is well-intended, but for companies like us who make hundreds of thousands of products and have tens of thousands of suppliers, it presents a fairly substantial burden.”

To read the entire Crain’s Cleveland Business article, including discussion from Ms. Shamrock and Mr. Szmagala, please see “Companies Must Dive Deep Into Supply Chains.”

Canada’s New Democratic Party Introduces Conflict Minerals Bill

The Ottawa Citizen reports that New Democratic Party member of parliament, Paul Dewar, recently proposed a bill to “fight the spread of ‘conflict minerals.'” Kerry Hall of, states in her article “Canada’s New Democrats Propose Law on Conflict Minerals” that “companies and their subsidiaries working in Canada would have to file an annual, audited review of their supply chain practices with the federal government which would then make the statements publicly available.”

The Canadian bill is similar to the SEC’s conflict minerals rule, but the Canadian bill differs in some key ways: additional mineral derivatives are covered, the “covered countries” are not identical, the bill adds extraction, purchasing and trading to the impacted activities, and reports are required on a fiscal year basis. These differences will make it more costly for companies to comply with US and Canadian requirements.

For your information, just last week we wrote that Canada was considering a conflict minerals rule similar to that of the United States.

Tenneco Inc.: Conflict Minerals Statement

Tenneco Inc., a self-described designer, manufacturer and distributor of emission control and ride control products and systems for the automotive original equipment market and the aftermarket, recently released its statement on conflict minerals. Excerpts from the statement follow. “Tenneco is committed to taking steps to comply with the legislation and is implementing a due-diligence process to meet its obligations. Tenneco supports an industry-wide approach to addressing social responsibility issues throughout the supply chain and participates in the Automotive Industry Action Group (AIAG) and is using the Organization for Economic Cooperation and Development (OECD) Guidelines as a framework for its due diligence. In order to comply with the legislation and manage customer requests regarding conflict minerals, Tenneco plans to develop processes to determine if such necessary conflict minerals originated in the Covered Countries or to confirm that they are from recycled or scrap sources. Tenneco expects its suppliers to conduct similar due diligence on the sources and chains of custody of these minerals and make their due diligence findings available to Tenneco.”

For Tenneco’s complete conflict minerals statement, please see Conflict Minerals Statement.

European Union Calls for Public Input on Conflict Minerals

On March 27, 2013, the European Union (EU) called for a public consultation, or public input, on conflict minerals. The goal of the EU is to “get interested parties’ views on a potential EU initiative[s] for responsible sourcing of minerals coming from conflict zones and high-risk areas – for example, war zones, post-war zones, and areas vulnerable to political instability or civil unrest. The Commission will use the results to help it decide whether and how, in a reasonable and effective manner, to complement and to continue on-going due diligence initiatives and support for good governance in mineral mining, especially in developing countries affected by conflict.” The public consultation is open until June 26, 2013.

For more details concerning the public consultation, please see “EU Calls for Public Input on ‘Conflict Minerals.'”