Lawrence Heim, Director of The Elm Consulting Group International, kicked off Conflict Minerals EDGE with a presentation exploring practical strategies and approaches for conflict minerals compliance. He began by suggesting the importance of having a strategy that mirrors what your customers have to deal with (for those not at the highest levels of the supply chain already). Even if you’re not directly impacted by regulations in terms of your own SEC reporting, you will be based on the requirements for traceability in the supply chain. You need to think like your customers.
In other words, if you’re involved in any aspect of the manufacturing supply chain involving conflict minerals (tin, tungsten, gold, tantalum, etc.) usage in any capacity: yes, this is your problem too!
Lawrence recommends studying the OECD framework and getting involved in industry groups as two good places to start. He also suggests making sure that customer-facing staff know what they’re talking about and have an awareness of what issues are relevant for conflict minerals policy and compliance. On the most foundational level, Lawrence also suggests the importance of establishing corporate policy and coordinating multiple departments/function, not to mention assigning the right roles internally. For example, how deep do you want to go in developing visibility and traceability in the supply chain, and who is responsible for delivering what is required?
After these initial steps, it’s possible to review options for supplier engagement, including determining status of material origin and assessing IT systems and data exchange standards. There’s also the entire marketing/communication side of initial scoping efforts, including developing customer and market-facing strategies to communicate what your organization is going to do to drive compliance efforts. Only then does it make sense to directly engage suppliers in a formalized process, including revising contract terms to include clauses focused on audit cooperation and developing lower-tier visibility.
Stay tuned as our coverage continues.