February 28, 2014 – March 7, 2014
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.
EU Releases Draft of Conflict Minerals Regulation, Proposes Voluntary Scheme
On March 5, 2014, the EU released a draft conflict minerals Regulation that will create a voluntary process in which importers of tin, tantalum, tungsten and gold into the EU can self-certify that they do not contribute to financing armed conflict.
The draft Regulation focuses on the upstream portion of the supply chain, specifically the more than 400 importers of minerals into the EU, and offers incentives to importers that undertake the due diligence steps.
For commentary about the draft Regulation, please see our blog post and client alert letter.
Op-Ed: Court Should Uphold Conflict Minerals Rule
Bennett Freeman, Senior Vice President, Sustainability Research and Policy at Calvert Investments wrote an opinion editorial in The Hill urging the Court of Appeals to uphold the conflict minerals rule. Freeman reasons, “Striking the rule would create troubling uncertainties for the future of countless SEC disclosure requirements that are essential to investor confidence.”
Freeman then discusses the benefits of such disclosures required by the conflict minerals rule. “Due diligence disclosures enhance investor confidence and decision-making by shedding light on how companies manage two material risks: First, brand value in a marketplace where consumers are conscious of the origins and ethical impacts of their purchases, and, second, a company’s capacity to manage complex global supply chains. If a company is unwilling or unable to identify material origins, then is it maximizing efficiencies? If a company is not mitigating supply chain risks, then is it mismanaging other material risks?”
Poll: Businesses Would Suspend Relationship With Alleged Conflict Mineral Supplier
The Ethical Alliance, a member-based organization for anti-corruption and compliance professionals, recently conducted a poll questioning legal and compliance professionals as to what they would do if a member in their supply chain violated rules designed to prevent trade in certain conflict minerals areas.
According to the accompanying press release, eighty-three percent (83%) of businesses would suspend their relationship with that supplier until further due diligence could be conducted and fifteen percent (15%) of businesses would terminate their relationship with that supplier.