February 1, 2017
I have been managing conflict minerals (CM) compliance for a $9B tier 1 automotive company since the passing of the law in 2010/2012. I have worked in conjunction with CFSI and the Automotive Industry Action Group to develop reporting requirements in an attempt to identify all smelters of CM througout the globe. While well intended I belive the whole process to be a failed attempt which most companies at the lower tier levels of manufacturing are giving little effort to the accurate collection of the data. Most of these companies, mine included, have no direct business relationship with the smelters or the mines. Typically they are 4 to 5 levels removed from the smelting process and the mining of the CM. In addition, the turnover of the smelters due to the economics of CM pricing makes this process a never ending cycle of due diligence.
In the beginning we were seeking to identify the presence of the CM in our company's products. Now we are being pressed to trace specific amounts of CM in individual products for specific customers. As there is no diminimis provision in the law even the slightest amounts (trace amounts) of CM are being called out by major OEM automotive companies to be reported.
There is tremendous redundancy throughout the reporting process which funnels into the SEC who is incapable of processing this data. The annualized requirement is resulting in the reporting of falsified data from supply bases who are focused on value added processes resulting in little time and effort given to the proper due diligence required to vette their sources of CM.
I strongly encourage this law (Section 1502) be repealed without replacement.