information about conflict minerals

Conflict minerals – a resource and a risk

Conflict minerals (more generally known as “conflict commodities” or “conflict resources”) are goods such as raw materials or naturally occurring resources which are often mined or extracted illegally and without any state control in conflict regions or high-risk areas. Systematic violations of human rights and international law go hand-in-hand with this activity. The use of conflict minerals therefore falls within the scope of companies’ Corporate Social Responsibility (CSR) and due diligence obligations.

The most commonly mined conflict minerals are tin, tungsten, tantalum, and gold, which are often classified together as 3TG minerals. The ores of these minerals are Cassiterite (tin ore), wolframite (tungsten ore) and coltan (tantalum ore). These ores are frequently used in electronic devices such as computers and cell phones.

There are various international statutory requirements to prevent human rights violations during the extraction of critical raw materials. Adhering to these provisions or avoiding conflict minerals in products can enhance a company’s competitiveness and success as well as strengthen its CSR efforts.

The European Union has imposed due diligence requirements with respect to conflict minerals since January 21, 2021, based on the OECD Guidelines for Multinational Enterprises. This requirement is based on the EU Conflict Minerals Regulation 2017/821 which came into force in 2017. The Regulation enforces due diligence, management, and risk management requirements as well as control mechanisms which apply from 2021. All “conflict and high-risk areas” are regarded as countries of origin. A list of these countries is updated regularly and published at www.cahraslist.net.

Companies listed on the stock market in the USA which use conflict minerals have had to comply with due diligence requirements since 2014, following the implementation of the Dodd-Frank Act. The Act followed the Kimberley Process which has restricted the trade in blood diamonds since 1998 by introducing government certificates of origin. These measures have obligated companies to acquire these minerals in a responsible manner and to use legal trade routes. The aim is to cut off financial support to armed conflicts in the countries of origin. Countries of origin according to the Dodd-Frank Act are the Democratic Republic of the Congo (DRC) and the neighboring countries of Angola, Burundi, the Central African Republic, the Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda, and Zambia.

All companies listed on the stock exchange in the USA have been obliged since May 31, 2014, to provide an annual report to the US Securities and Exchange Commission (SEC) if they use conflict minerals. This refers to Article 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act passed by the US Congress in July 2010, available here as a pdf. In this report, companies are also responsible for disclosing whether they use conflict minerals in their products and whether this is necessary. They must also state their precise point of origin. The companies must also publish the results of reporting and disclosure obligations on the internet. 

If a company discovers as an initial step that it is processing conflict minerals, it must investigate where they came from and demonstrate this has been carried out “in good faith”. Should these minerals have been imported from one of the listed states, the company must produce a Conflict Mineral Report for the entire supply chain. The results must also include the measures which have been undertaken to determine the origin. An independent private company checks whether the rules have been adhered to.

It is important to understand that the Dodd-Frank Act does not ban the use of DRC minerals. These are minerals mined in the Democratic Republic of the Congo and its neighboring states. However, as companies have to disclose this information, the “name and shame” principle applies. This means, for reasons of prestige alone, companies listed on the stock exchange in the USA will make a point of avoiding these minerals in their products as the public increasingly values companies that take Corporate Social Responsibility (CSR) seriously.

The EU Conflict Minerals Regulation 2017/821 enacted on May 19, 2017, by the European Parliament and the European Council created a legal framework for the EU to restrict the trade in tin, tantalum, tungsten, their ores, and gold. The “Union System” aims to provide global transparency and certainty with respect to the supply practices of Union importers, smelters, and refiners. EU importers of conflict minerals are responsible for carrying out specific due diligence. This means they must avoid causing harm in the areas concerned and monitor and control their purchases and sales in accordance with the OECD Due Diligence Guidance. These five due diligence steps can be summarized as follows:

  1. Set up reliable management systems in the business
  2. Identify and evaluate the risks in the supply chain
  3. Develop and implement a strategy for dealing with the identified risks
  4. Have an independent third party complete an assessment of the due diligence requirements at specific points in the supply chain.
  5. Produce a due diligence report

The guidelines are not legally binding on the company but represent the introduction of a new, stricter complaints and mediation procedure. 

Companies listed on the stock exchange in the USA pass the disclosure requirement down the supply chain. German and other European companies can therefore be indirectly affected as a supplier. Their materials reporting must include declarations of the critical raw materials used and their origin. If a European company is itself listed in the USA, it is immediately subject to these regulations. It must provide its own evidence with respect to the use and origin of conflict minerals all the way down its supply chain.

The report must provide evidence of whether tin, tantalum, tungsten, their ores, or gold originate from the Democratic Republic of the Congo (DRC) or its neighboring states (DRC states) and the extent to which they are actually “necessary” for the product. If this is the case, the companies have to specifically show where these critical minerals originate. If the minerals actually originate from one of the DRC states, a “Conflict Mineral Report” must be produced. This explains in detail what efforts were made to clarify the origin of the conflict minerals and to be certain that an armed conflict has not been supported either directly or indirectly through the trade of these minerals. This report must also be checked by an independent entity. Companies concerned must provide an account of the previous calendar year, irrespective of the end of their financial year. The report is due by May 31 each year for the previous year.

It is estimated that approximately 195,000 international companies throughout the global supply chain are affected by the US requirement for evidence. 

The EU Conflict Minerals Regulation requires dealers and importers of tin, tantalum, tungsten, and gold to set up due diligence processes. Sanctions are in place if this is not carried out. Manufacturing companies with more than 500 employees are encouraged to disclose their supply chain voluntarily. A brief English-language guide (PDF) lists the countries concerned. The Regulation applies to all “conflict and high-risk areas”.

Simply checking the content of components and materials used in-house is not enough for companies to comply with US due diligence requirements. An annual report must state whether the conflict minerals, which are “necessary” to ensure the product can be made and functions correctly, originate in DRC states. Whether this is true or not depends, among other things, on whether the mineral is an essential component of the final product and has been used intentionally. In other words, to ensure the mineral is not included in the product due to contamination from another product as can be the case with tin residues in steel, for example.

Some companies provide their supply chain with information on the legal requirements and ask suppliers to identify components which contain conflict minerals or their derivatives. The associated component supply chains and processors should then be identified. Finally, a check must be carried to determine whether the identified substances have been extracted from scrap or recycled material or whether they actually originate from conflict mines.

By complying with conflict mineral requirements in an exemplary manner, companies can make a positive use of this process to reinforce their CSR efforts. We would be pleased to support you with these processes through our consulting and support services. Contact us to arrange an initial consultation to discuss your requirements.

Cobalt is a heavy metal which was mainly used to color glass and ceramics but has also been used in batteries since the 1990s. It is now present in all cell phones, smart phones, and electric automobiles. Even though alternatives have now been found and various companies are working extensively on cobalt-free batteries, demand remains high.

Cobalt is mainly extracted in the Democratic Republic of the Congo as over half of the world’s known cobalt reserves are found here. As is the case with 3TG conflict minerals, extraction is often carried out under problematical circumstances. This was highlighted in a 2017 report on child labor in the supply chain by Amnesty International.

The use of cobalt was supposed to be controlled by the Dodd-Frank Act (Section 1502) and was going to be classified as the fifth conflict mineral along with the 3TG. However, many companies resisted this plan because of the high costs associated with having to carefully check the origin of products and materials. As cobalt was initially processed mainly as a by-product of copper and nickel extraction, the smelters could not be readily identified and validated.

While the Excel-based CMRT (Conflict Minerals Reporting Template) for producing reports on 3TG follows the IPS-1755 standard, there are currently no legal provisions for the cobalt supply chain. In spite of this, a Cobalt Reporting Template (CRT), produced by the Responsible Minerals Initiative, has been available since 2018. The CRT is based on the OECD Due Diligence Guidance

In the meantime, many companies have voluntarily obligated themselves to disclose the entire cobalt supply chain as part of their CSR measures. Reporting according to the OECD Guidance refers to all the conflict and high-risk areas (CAHRAs), unlike the Dodd-Frank Act for 3TG.

Cobalt (CAS-no. 7440-48-4) also falls under the REACH regulations as it can cause long-term harm to aquatic life, can produce an allergic skin reaction, and cause other allergic reactions, asthma, or breathing difficulties if inhaled. Manufacturers and importers must therefore make guidelines on safe usage available and take precautions.

Thousands of companies across the globe find themselves under pressure to produce evidence due to the legal provisions on conflict minerals. Many companies find it difficult to comply with their due diligence obligations as there are many complex individual steps between raw material extraction and the production of an end product. Conflict minerals add another layer of complexity when companies have to manage their materials reporting requirements across the supply chain. It is almost impossible for a company to keep up with all the responses, administrative tasks, and reporting using a manual system.

This is where we can help with our comprehensive range of services, specialist expertise, contacts, and experience in the field of materials research and materials compliance management. We help businesses to comply with the legal requirements relating to conflict minerals. Our services can help you save valuable time, strengthen your CSR efforts, and avoid errors which can have a negative effect on your business’s reputation. Many companies around the world have placed their trust in our expertise in the field of materials and conflict minerals compliance.

Below are a few tools which are available to you which can support your CSR measures relating to conflict minerals. We can provide expert support on the use of all these tools.

1)SEC website with information on the Dodd-Frank ActLINK
2)Dodd-Frank Wall Street Reform and Consumer Protection Act Relevant: SEC. 1502 (p. 369-375)PDF
4)General definition from WikipediaLINK
5)SEC press releaseLINK
6)Responsible Minerals Initiative (RMI) websiteLINK
7)EU Conflict Minerals Regulation 2017/821 enacted by the European Parliament and CouncilLINK
8)Further information on European regulationsLINK
9)OECD Due Diligence GuidancePDF
10)Commission Recommendation (EU) 2018/1149 for non-binding guidelines for the identification of conflict-affected and high-risk areasLINK
11)Due Diligence Guide: Towards Conflict-Free Mineral Supply Chains PDF
13)Conflict materials: List of responsible Member State authorities named in accordance with Article 10, paragraph 1 of the EU Conflict Minerals Regulation 2017/821 (English)PDF
13)Overview of countries of origin (CAHRAs)LINK

Manual reporting – the Conflict Minerals Reporting Template (CMRT)

Conflict minerals in the
IMDS (for the automotive industry)

Conflict minerals in the
CDX system (multi-sector)

Product Stewardship Network (PSN) with Conflict Mineral Scenario (CMS)

More information about Conflict minerals

Need more information on the tools described above or further support? We can help you strengthen your CSR efforts and ensure you are fulfilling your due diligence requirements correctly – you’ll soon see the financial benefits. 

Contact us to find out more. We’ll explain how our experienced specialists can take the materials reporting weight off your shoulders.