EU Conflict Minerals Legislation…getting closer to finalization.
On June 15th, 2016 European institutions negotiated the EU conflict minerals regulation and came to a political agreement regarding the law. The next step is to develop the legal and technical language, and to publish the final rules.
The requirements will include mandatory due diligence for EU firms importing tin, tantalum, tungsten and gold (and their ores). The covered countries included any conflict minerals from any affected and high risk area worldwide. The EU law includes imports and materials and substances used to make finished goods. The OECD guidelines for responsible supply chains will be recognized and used as the same framework as compliance with Dodd-Frank. The EU Commission will also develop incentives and voluntary supply chain due diligence for downstream EU companies that use 3TG in components in products. The law will be mandatory for suppliers of 3TG and require due diligence, and will also put pressure on downstream companies to adopt responsible sourcing practices and disclose information regarding 3TG in products. This indicates that downstream companies will not have mandatory obligations under the law, however due diligence may be pressured by NGOs and industry. Before this can be implemented as EU law, additional technical work is required and the final rules are expected to be adopted in the next few months.
Prior to this, on May 20th, 2015 the EU Parliament voted in favor of this version of a Conflict Minerals Law. This EU Conflict Minerals Legislation will be more extreme in geogeraphic scope that the US Conflict Minerals law due to the geographic scope not being limited to the DRC and surrounding countries. If your company has worked with on the US Conflict Minerals Law, Dodd-Frank, you may already have a good foundation to respond to this legislation. If your company supplies products that may contain Conflict Minerals to EU companies, GCG recommends tracking this legislation and notifying your suppliers of the new law as part of your supplier education, outreach and training efforts, as needed.
If your company, whether an issuer or an upstream supplier, is still struggling with managing supply chain transparency issues, like Dodd-Frank, let us know how GCG can help. We have successfully implemented and managed US Conflict Minerals requirements over the past three years, for both issuers and suppliers alike. Once the EU version of Conflict Minerals is finalized, we can help you manage your suppliers, conduct supplier and smelter RCOIs, perform required due diligence steps, and prepare required forms.