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Semiconductor Value Chain

U.S. Conflict Minerals Compliance "Ownership" Still Unclear

30 May 2013

Compliance with the requirement to report the use of “conflict minerals” continues to confound global corporations. External issues, such as what supply chain partners are doing, are challenging enough, but internally companies are unclear which internal department should “own” the responsibility.

A recent survey conducted by lifecycle management solutions provider Aravo Solutions found 25 percent of companies assign the role to procurement. “The rest have fragmented responsibility across legal, finance, sustainability and production organizations,” Aravo reported. “This lack of central ownership contributes to compliance gridlock and the potential to miss reporting due dates.”

Participants in the survey included financial, compliance, internal counsel and procurement executives who manage supply chain and enterprise risk. The results of the survey show that while reporting rules have been published by the SEC, most companies have yet to begin the required reasonable country of origin inquiry (RCOI) process, putting them at risk of failing to meet the necessary Securities and Exchange Commission (SEC) reporting deadlines.

The number one concern affecting SEC reporting readiness is the lack of progress being made to date in conducting RCOI’s or the steps outlined in the OECD Due Diligence framework, the survey found. Only 15 percent of those surveyed have begun either of these steps.

“As we work with companies preparing for conflict minerals identification and reporting, we clearly see the need for a common approach to RCOI that effectively implements the OECD framework a well as the EICC due diligence template,” says Robert Shecterle, vice president, marketing, Aravo. “Using proven best-in-class conflict minerals compliance tools, templates and solutions to automate the collection and management of required supplier compliance information can provide the necessary information and significantly accelerate program deployment to reduce regulatory exposure.”

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