December 6, 2013 – December 13, 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.
PTC: Practical Tips on Conflict Minerals Reporting
Jason Alberti of PTC, Inc. recently featured an article on PTC’s blog written by Christopher L. Harden and titled Practical Tips on Conflict Minerals Reporting.
In his article, Mr. Harden notes that by now, some certainty surrounds the expectations of the SEC and the requirements of the conflict minerals rule, but not so much in regards to the expectations of NGOs and socially conscious consumers. Companies are unsure how these NGOs and socially conscious consumers will react to their first reports come May 2014.
Mr. Harden directs companies to the September 2013 guide published by the Responsible Sourcing Network and the Enough Project to assist them in developing their baseline reports. Mr. Harden states, “Both of these groups are thought leaders in the field of responsible sourcing, and their paper aims to achieve the maximum positive impact in the region by urging companies to comply with the letter AND the spirit of the law.”
Mr. Harden further states, “Even if you find conflict minerals within your current supply chain, a public filing which honestly discloses that fact and outlines a remediation plan to achieve conflict-free status will be looked upon much more favorably than those organizations that choose to file as ‘undeterminable’ while that loophole exists.”
The difficulty is that the Responsible Sourcing Network/Enough Project guide goes beyond what the SEC requires, and companies are struggling to determine what will be acceptable reporting in their industries. They are responsible to shareholders at the same time as they are trying to be responsive to what the SEC, their customers, and other stakeholders will require. To see our commentary on the September 2013 guide published by the Responsible Sourcing Network and the Enough Project, please see our blog post titled Expanded Expectations for Conflict Minerals Reporting.
KPMG Survey: Millennials Consider Social Issues When Considering Big Ticket Purchases
On December 10, 2013, KPMG LLP, an audit, tax and advisory firm, released its survey results regarding purchasing decisions and social issues, which showed that conflict minerals awareness was 75% higher among consumers under 30 than the general US population and that almost 70% of consumers under 30 frequently consider social issues for big ticket items.
After analyzing the results, KPMG LLP stated in its press release, “Retailers and manufacturers likely won’t see an immediate conflict minerals impact on consumer sales in 2013. However,  awareness will increase in 2014.” Jim Low, an Audit Partner at KPMG LLP, reasoned, “Many of the regulations are accelerating trends that would take place anyway.”
Bowman: Companies Need to Step Up to Meet Conflict Minerals Rule
Robert Bowman, Managing Editor of SupplyChainBrain, was a recent contributor to Forbes online by posting an article titled Companies Need to Step Up to Meet New Conflict-Minerals Reporting Rule.
In his article, Robert featured an interview with Greg Dickinson, CEO of risk management specialist Hiperos. Mr. Dickson recommends a “crawl, walk, and run” process when first setting up due diligence (more on this in the actual article). In addition, Mr. Bowman discusses new regulations that may be issued in the near future, “…companies could come under intensified pressure for purchasing cotton from Uzbekistan, which is known for using forced and child labor in the fields.”