Conflict Minerals EDGE: Compliance Technology (Part 3)

This post is based on content delivered during Conflict Minerals EDGE. It leverages content contained in presentation delivered by Spend Matters Thomas Kase titled: Conflict Minerals: Let Technology Do The Heavy Lifting. Spend Matters PRO subscribers (annual full subscribers or corporate members) can request a copy of the presentation by dropping us a line.

Universal automation steps for Conflict Minerals compliance include leveraging various standardized tools— such as the Conflict Minerals CheckPoint Reference spreadsheet (contact us for more information on it)—for data capture, management, auditing, using Reasonable Country of Origin Inquiry (RCOI), and adherence to OECD’s 5-Step Due Diligence Framework. But it’s important to remember that regardless of automation and solution deployment approach, per the SEC, the RCOI process can differ depending on an issuer’s size, products, relationships with suppliers, or other factors and will evolve over time depending on available infrastructure.

The general standards provided in the Final Rule state that the RCOI must be reasonably designed to determine whether the issuer’s Conflict Minerals originated in the Covered Countries or came from recycled or scrap sources, and the RCOI must be performed in good faith. To meet these standards, companies should not be reliant on the A/P module of their ERP solution or Excel to gain visibility and track and maintain supplier responses. Such approaches simply don’t cut it for gathering documents, capturing sign-offs, and fostering multi-tier relationships.

From a supplier management perspective, our research suggests that companies have numerous options. These include:

  • Supplier Lifecycle Management (SLM) modules from ERPs including IBM/Emptoris, Oracle, SAP/Ariba, which can be quite good if implemented correctly. But don’t underestimate the importance of a planned implementation with the right resources backing it up. Don’t rely on your vendor or a third-party SI alone to make it happen.
  • Point solutions from providers such as Aravo, CVM Solutions, HICX, Hiperos, GXS (RollStream), etc. can also be used to address conflict minerals traceability and management.
  • Suite modules from broader procurement specialist vendors including BravoSolution, SciQuest and Zycus

Regardless of the solution a company uses, we recommend an open-registration supplier management approach that covers all current and prospective suppliers.  As a back-up, companies should consider an 80/20 assessment of direct suppliers, which will still create greater efficiencies than “managing” the situation via Excel spreadsheets.

It is important to keep in mind that vendor management tools have utility not only for data capture, but also to share information. These tools can document who read which memo and who accepted which revisions of terms, provided which affidavit, on what date/time. This can prove invaluable from a broader traceability and auditing perspective, showing companies have gone beyond the just the letter of the narrow law to adhere to the overall regulatory philosophy and approach.


Source: Spend Matters / MetalMiner

Spend Matters PRO subscribers can access the entire presentation on which this post was based here: Conflict Minerals EDGE: Live Blogging, Compliance Technology, And More.

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