Lawrence Heim, Director of The Elm Consulting Group International, came out with a strong statement that those tasked with conflict minerals compliance should consider as early as possible in developing their compliance policy: "Just say no” to complete outsourcing approaches.
Lawrence suggests that he does “not personally recommend outsourcing all elements of Conflict Minerals compliance” to a third party. He says, “We are on the line. We have to face customers. We have to address concerns of suppliers. If we’re going to think about having a third-party take responsibility, just consider the fact that it is not beneficial to pursue a black box strategy in a vacuum” where uncertainty and ambiguity is still front and center.
Having a third party “that spits out reports” creates distance between us and our supply chain in an uncertain environment. Further, the core challenge with outsourcing, Lawrence observes, is that “We need to be more actively engaged ourselves. Ultimately we are accountable and responsible for compliance and working with all internal and external parties” in managing through the complexity of conflict minerals expectations and compliance.
Moreover, based on our own research, we’ve seen that BPO and outsourcing approaches work best when a scope of work is tightly defined and measurable. But given the uncertainties surrounding all aspects and ambiguity in the OECD framework plus the law itself, companies that are most nimble and closest to the efforts are more likely to achieve compliance approaches that are most advantageous based on the fluid environment.
There are roles for third party participation, including in supplier audits. But Lawrence does not recommend stand-alone conflict minerals compliance audit if you don’t need it. He suggests that most companies are “already engaged in quality, social responsibility and ethical sourcing audits … I typically suggest you bolt-on a small conflict minerals element to this.”
Stay tuned for further coverage.