Companies need to prepare for the Supply Chain Act

imds professional provides expert support with the implementation of regulatory compliance processes.

Weilrod, 28 September, 2022 – Gold, cobalt or mica—minerals that are essential in many everyday products from electronics, car paints to lipsticks and rechargeable batteries. But where these minerals come from and under what conditions they are mined are often difficult to determine. In most cases, they come from regions where sales are used to finance violent conflicts, where environmental protection standards are not met, or even where child labor is used for mining. According to the aid organization Terre des Hommes, some 22,000 children work in mines in India extracting mica. American and European regulations on the 3TG minerals (tin, tantalum, tungsten and gold) have already attempted to minimize these often illegal and questionable mining practices. For instance, companies must disclose where they source the four minerals that fall under the term “conflict minerals”. The Supply Chain Act—- officially known as the Supply Chain Due Diligence Act (LkSG)—takes things further. According to the current legal situation, the act will apply in Germany from January 2023 and obliges companies to eliminate risks such as child labor, slavery, and environmental pollution in their supply chain. Initially, companies with more than 3,000 employees must set up a risk management system, conduct risk analyses, issue a policy statement on human rights, establish preventive measures, publish reports on the fulfillment of due diligence obligations, initiate remedial measures, and set up a complaints procedure. From 2024, these obligations will then apply to all companies with more than 1,000 employees. “But smaller companies are also affected because as part of the supply chain they have to provide information so that their customers can, in turn, meet their obligations,” explains Tim Thome, Product Environmental Compliance expert at imds professional. The company based in Hesse, Germany has established a solid reputation in the field of materials reporting since 1999. imds professional’s team of experts is familiar with legal regulations on chemicals, end-of-life vehicles, biocides, conflict minerals, and the systems that can be used for reporting.

“Only companies that know which minerals are present in their products and where they come from can firstly provide information about them and secondly eliminate the risks in their supply chain,” continues Tim Thome. Materials reporting systems such as the IMDS and the CDX help with this. Here, all data is collected across the entire supply chain and can be queried at any time. The International Material Data System (IMDS), for example, is used worldwide in the automotive industry, while the Compliance Data Exchange System (CDX) can be used across all industries. The CDX has now been extended to include the Responsible Materials Manager so that EMRT can also be processed automatically in addition to CMRT. CMRT (short for Conflict Minerals Reporting Template) and EMRT (short for Extended Minerals Reporting Template) are Excel templates provided by the Responsible Minerals Initiative (RMI) to report conflict minerals. The RMI is a coalition of more than 400 companies worldwide that are committed to the responsible sourcing of minerals in their supply chains.

“We provide consulting and training to help companies meet their compliance obligations, including those stipulated in the Supply Chain Act,” explains Heide Teubert, Managing Director of imds professional. “Our experts are familiar with the laws and systems, can analyze each company’s specific situation, and help set up the necessary processes.” Even companies that will not be (directly) affected by the German law need to focus on this issue. A similar law is currently being drafted at European level, which includes even more far-reaching regulations. Companies with a smaller number of employees will also be affected by this law and will even be held liable if they or their suppliers do not comply with their due diligence obligations.

Sources:

https://www.bmz.de/de/themen/lieferkettengesetz

https://www.bmas.de/DE/Service/Gesetze-und-Gesetzesvorhaben/gesetz-unternehmerische-sorgfaltspflichten-lieferketten.html

https://www.bundestag.de/dokumente/textarchiv/2021/kw23-de-lieferkettengesetz-845608

https://www.tdh.de/spenden-und-stiften/mica/

https://www.spiegel.de/wirtschaft/indien-wie-kinder-in-den-glimmer-minen-von-jharkhand-ausgebeutet-werden-a-1149309.html

https://responsible-mica-initiative.com/

https://www.responsiblemineralsinitiative.org/


About imds professional:

imds professional provides a range of solutions to help companies remain in full control of their materials and product compliance obligations. We offer three core services: consulting, support, and training. These services can be customized to ensure your company fully complies with all types of environmental legislation, directives, guidelines.Our unbiased, targeted advice, customized services, and training courses ensure you remain competitive in the face of increasing regulatory requirements. Small to medium-sized operations and businesses throughout the world from the manufacturing and processing sector have been relying on our expertise since 1999. Further information can be found on www.imds-professional.com