June 14, 2013 – June 21, 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.
Birmingham Assay Office: Participate in European Union Public Consultation
The Birmingham Assay Office, responsible for testing the purity of certain metals to protect consumers, issued an urgent news release calling on the United Kingdom jewelry industry to participate in the public consultation, which closes on June 26, 2013.
In the news release, Michael Allchin, Chief Executive and Assay Master, states “Does the UK jewellery industry want an EU legislative regulation (a law) that might be a sort of version of the United States’ ‘Dodd Frank Act'” or “would the trade prefer to adopt the ‘UN Guiding Principles on Business and Human Rights’ and have a voluntary code more along the lines of the ‘OECD Due Diligence Guidance'”?
Mr. Allchin further states, “the Dodd Frank Act in the USA has triggered the law of unintended consequences, such that it has become so bureaucratic and onerous for legitimate suppliers to obtain gold, tin, tungsten and tantalum from the DRC and surrounding countries that they have abandoned sourcing from that area altogether, leading to a collapse in legitimate trade. We must make sure we chose our words carefully to ensure that gold does not get labeled generally as a ‘conflict mineral’ instead of as a ‘legitimately sourced mineral from a ‘conflict-affected area’ which it may sometimes be.”
For more information on the European Union Public Consultation, please see EU Public Consultation.
MTS Systems Corporation: Conflict Minerals Policy
MTS Systems Corporation (MTS), a global supplier of test systems and industrial position sensors, recently released its conflict minerals policy. Excerpts from the policy follow. “As a manufacturer of products that contain gold, tantalum, tin and tungsten, MTS is committed to sourcing materials from environmentally and socially responsible suppliers. It is MTS’ policy to perform reasonable due diligence in the responsible sourcing of Conflict Minerals, and we expect our suppliers to abide by the same standard.”
To view MTS’ entire conflict minerals policy, please see MTS Conflict Minerals Policy.
Journal of Accountancy: Maintaining Auditor Independence Status When Auditing a CM Report
Mr. Ken Tysiac, a Journal of Accountancy Senior Editor, summarized the American Institute of CPA’s (AICPA) guide on maintaining independence when auditing a conflict minerals report. Mr. Tysiac notes, among other things, that “[a]n auditor of an SEC issuer’s financial statements is not precluded from performing an independent private-sector audit of that client’s conflict minerals report.”
To view Mr. Tysiac’s article, please see “How to Maintain Independence When Auditing a Conflict Minerals Report.”
To view the AICPA’s conflict minerals webpage resources, please see Conflict Minerals Webpage Resources.
Hanwha Azdel, Inc.: Conflict Minerals Policy
Hanwha Azdel, Inc., a manufacturer of high-performance thermoplastic composites, recently released its conflict minerals policy. Excerpts from the policy follow. “Hanwha Azdel Inc. neither includes conflict minerals in any of its manufactured products nor does it use any of these metals in its manufacturing process.” The policy then refers to its customer letter signed by Hanwha Azdel Inc.’s product technology manager, Mark Mason, which states that “Hanwha Azdel Inc. does not include any metals currently identified as Conflict Minerals as defined under section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010…in any of its manufactured products nor does it use any of these metals in its manufacturing processes.”
Nintendo Faces Heat Over Conflict Minerals Policy
In one of our first blog posts, we featured Nintendo’s struggle with activists who planned on protesting Nintendo’s latest video game console release because of Enough Project’s 2012 Corporate Ranking report that stated, “Nintendo has made no known effort to trace or audit its supply chain.”
Since then, Nintendo has taken steps to reduce its use of conflict minerals in its video game consoles. However, just recently, some activists are saying that it’s not enough.
Hayley Tsukayama of the Washington Post reports that “anti-slavery activists…are asking Nintendo to release details on its policies regarding conflict minerals.” Although Nintendo has made publicly available its conflict minerals policy, Nintendo is not subject to the U.S. SEC’s conflict minerals rule because it is not a reporting company as defined by the rule. Activists urge that this is irrelevant and that like Nintendo’s competitors (Sony, Microsoft, Apple, and HP), Nintendo should state “what concrete steps they’ve taken to make sure that conflict minerals aren’t in their products.”
The Washington Post further reports that “Walk Free, an anti-slavery group, has launched a campaign timed at Nintendo’s annual shareholder meeting on June 27.” The Washington Post describes the campaign as “another letter-writing effort, podcast outlining the conflict mineral issue, plus in-person protests to be staged at Nintendo retailers this weekend. The group has also released a video game of its own as part of the protest. The game, a spoof of Nintendo’s Mario franchise, follows the company’s famous brothers Mario and Luigi as they look for answers in Nintendo’s corporate office. They spend three levels fighting through filing cabinets and water coolers only to find — spoiler alert — that the final boss is in another office.”