February 1, 2017
The Conflict minerals legislation cost hundreds of millions of dollars both in external consultant fees and internal company tasks associated with carrying out compliance. A company with a diverse integrated supply chain has to depend upon a variety of companies, many of which are small businesses with limited resources, to attempt to identify sources of components that may be very far removed from the actual product they provide. The chance for inaccurate or incomplete data grows as the supply chain extends through numerous companies and processes. Companies are making best efforts to comply and those in the electronics industry have the best chance of supplying accurate information because of being much closer to the smelters. The legislation was so broad that maybe only 5% of suppliers to a equipment manufacturing company would have a possibility of exposure, but we need to query all suppliers, which is very inefficient. In the end, we see no tangible result other than creating a new industry of experts to assist all of these companies navigate and comply with the legislation. That is money that cannot be put toward jobs or expansion and puts US companies at a marked disadvantage. The intent as always was noble, but the even the proponents commented that they were displeased with the results.