Conflict Minerals – Dodd-Frank, Section 1502

The following is a preview from Thomas Kase's upcoming presentation at Conflict Minerals EDGE, on May 6 at Hotel Sax Chicago. It's not too late to register - we hope to see you there!

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Within the Dodd-Frank Wall Street Reform and Consumer Protection Act’s Title 15 is a “Specialized Corporate Disclosure” provision that you should have seen already:

“Section 1502 requires persons to disclose annually whether any conflict minerals that are necessary to the functionality or production of a product of the person, as defined in the provision, originated in the Democratic Republic of the Congo or an adjoining country and, if so, to provide a report describing, among other matters, the measures taken to exercise due diligence on the source and chain of custody of those minerals, which must include an independent private sector audit of the report that is certified by the person filing the report. Certain aspects of this rulemaking will require consultation with other federal agencies, including the State Department, the Government Accountability Office, and the Commerce Department. Persons are not required to comply with these rules until their first full fiscal year after the date on which the Commission issues its final rules.”

The 140 words above have led companies to make investments in consulting services, technologies, data enrichment, audits, and other efforts to ensure compliance. We have written about many of these activities and the surrounding best practices extensively on both the Spend Matters site, and our sister site MetalMiner. Here are the links:


In fact, this is such a high-demand topic that we have invested in a one-day conference focused exclusively on this area – Conflict Minerals EDGE – which you can read more about hereIt is coming up soonMay 6, in Chicago, don’t miss it!

Inevitably, the journey toward Conflict Mineral compliance is paved with technology. If not before, your Supplier Lifecycle Management solutions will be put to the test, as will the quality of your vendor data – do you have accurate records covering whom to contact (not only name and location, but also personal email and direct phone number information) for every supplier you have used over the past 18 months?

Where do you even begin?  Some of the main bullets to cover (and they will all be addressed during Conflict Minerals EDGE) include:

  • Specific tools, such as project plans
  • Templates
  • Pragmatic checklists including functioning spreadsheets beyond (EICC-GeSI) tools
  • Technology decision guide
  • Blueprint for the integration of conflict minerals compliance solutions with broader supplier management, procurement and supply chain technologies


Technology being my favorite area, I have broken this set into a string of action items of my own:

  • 3rd Party Enrichment – parent-child linkages, insights & validations
  • Contracts – what you have committed to on the sell-side
  • Customers – what you are about to commit to on the sell-side
  • Inform, Train, Document – across all areas, internal and external
  • Products – and components, sub-components and ingredients to gradually audit your way to the source (certify your entire supply chain, not just your suppliers)
  • Sourcing – early and full visibility to the sourcing process and team to enable early upstream correction
  • Suppliers (i.e, your vendors) – their locations, parents, and subsidiaries, which individuals to engage with at each level, etc


This last list of bullets will be covered in far greater depth at Conflict Minerals EDGE  as well. We will talk about how the various players – from ERPs, to point solutions, and modules from suite providers can get the job done.  We’ll also address what you should consider doing at the same time as you roll out a Conflict Minerals compliance initiative.

Here’s some food for thought – vendor management tools have utility not only for data capture, but also to share information, and the better solutions can document who read which memo, and who accepted which revisions of terms and provided which affidavit and on what date/time – this is critical and typically requires a proper implementation done by someone who understands the space!

It will be a great conference - I look forward to seeing you there. Again, you can read more about it here, and register here.

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Voices (2)

  1. Thomas Kase:


    All good points – and trust me, with the libertarian, free market outlook on business that we hold high at Spend Matters and at Metal Miner, we have little love for more regulations, and even less faith that this will actually help the people in the region.

    As you point out, there will always be circumvention – and from my trip to Nairobi a few weeks ago, I came away convinced that “transiting” conflict minerals through this country, or just about any other country in the region is probably quite easy. Commodities are after all, by definition, fungible resources.

    That said, the politicians deal the legal cards, and the bureaucrats implement the law – and firms within the purview of the SEC simply have to follow the rules. Not much to do about that in the short term.

    At Spend Matters and Metal Miner, we cater to the needs of the more sophisticated procurement and supply chain functions of large firms – smaller firms simply have little to no need for most of our information.

    Please note that we are not making hay out of consulting around conflict minerals, we just report on what is developing, and the best practices around compliance. Sure, it draws traffic to our sites, but would NOT reporting on it be better? That said, the unintended (presumably) consequences are something we will gladly follow – and we invite you to provide us with your (obviously deep) local insight into the less pleasant side of the CM medallion.

    Please email me directly!


  2. Chuck Blakeman:

    While you consultants are getting all giddy about the money to be made with these new regulations, people are dying as a result of 1502 in DR Congo. Here’s just a few things you are supporting by promoting this deadly regulation:

    1) It shut down 95% of production by local tribes in DR Congo. 10 million Congolese are devastated. Is that a transparency advance?

    2) The So-called “Solutions for Hope (Motorola/AVX) project is only certifying mines owned by giant multinational corporations, not the locals, and not in the conflict area. They might as well be certifying in Australia. Is that a transparency advance?

    3) Dodd-Frank will take an industry 90% owned by chiefs, and put it exclusively in the hands of giant multi-national corporations. Nobody is certifying mines that have been in the hands of chiefs forever. Economic colonialism has replaced geographic colonialism. Is that a transparency advance?

    4) Central Africa is the size of the United States; the conflict is in Vermont. Yet Dodd-Frank has set off a nuclear explosion that affects tens millions in nine countries, in the faint hopes of catching a few militia in its path. Is that a transparency advance?

    5) The UN says the militia are doing just fine. They are exporting just like always, except at 1/3 the former price. Is that a transparency advance?

    6) The mining organizations representing 20,000 miners in the conflict area were never consulted before this law was enacted. Is imperialism a transparency advance?

    As Aloys Tegera of the Pole Institute in Goma, DR Congo, says, “They picked the wrong target.”

    Target the militia. They are the problem, not minerals.

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