Excerpt from brief by SR&Z.
There are a number of near-term action items that registrants should consider as they gear up for compliance
with the conflict minerals rule:
1. Create an internal conflict minerals compliance team. For most registrants, the internal team will consist, at a minimum, of representatives from manufacturing, engineering, procurement, IT, finance and legal.
2. Consider whether additional internal hires are needed to manage the registrant’s conflict minerals rule compliance.
3. Consider retaining outside legal and other consultants to help develop and implement the conflict minerals rule compliance program. Outside counsel can assist in educating registrant personnel on the requirements of the conflict minerals rule and helping the registrant to construct compliance
policies, craft supplier communications and certifications, determine modifications to standard form contracts and prepare conflict minerals rule disclosure. Other consultants can, among other things, assist in analyzing the registrant’s supply chain and supply chain risk, developing and assessing the effectiveness of diligence procedures, advising on enhancements to internal reporting systems and procedures and helping the registrant to implement these enhancements.
4. Become familiar with the OECD conflict minerals due diligence framework, other NGO recommendations and relevant industry initiatives. Many registrants will want to piggyback on industry-wide diligence initiatives as a more efficient means of complying with some of the diligence requirements of the rule.
5. Determine on a preliminary basis the products that may be implicated by the conflict minerals rule.
6. Catalogue the registrant’s current procurement policies and practices, diligence practices and internal reporting and data gathering practices and capabilities relating to conflict minerals.
7. Construct a work plan, timeline and budget for conflict minerals rule compliance.
8. Assemble a database of supplier personnel that should receive conflict minerals compliance materials. Supplier compliance personnel will in many cases be different from the registrant’s regular
9. Send an initial written communication to suppliers educating them on the final rule and the registrant’s compliance obligations thereunder. We have put together a template that registrants can use for these purposes that is available upon request.
10. Adopt and communicate to suppliers and other relevant constituencies a supply chain policy setting forth the principles against which the registrant will assess itself and its suppliers. Some companies have separate supply chain policies, while others include the principles in their social responsibility or equivalent policy.
11. Develop questionnaires and certifications for suppliers and determine any additional supplier documentation, diligence and compliance requirements. This item will in part depend upon the particular industry and/or registrant. For example, the supplier certification process should take into account industry recommendations and diligence initiatives to map common supply chains. The questionnaire also should capture information relevant to Step 3 of the diligence inquiry to the extent applicable. In addition, registrants should consider whether to build into these materials forced labor and child labor elements, given evolving disclosure and legislative developments in those areas.
12. Incorporate relevant elements of conflict minerals rule compliance, such as the registrant’s supply chain policy, diligence process, inspection rights and supplier disclosure requirements, into contracts with suppliers.
13. Develop a risk management plan that includes procedures for suspending or terminating suppliers that do not comply with the registrant’s procurement policies, as well as alternative sources for conflict minerals.
14. Consider participating in the continuing development of industry supply chain initiatives.
15. Although the conflict minerals rule does not require a registrant to make disclosures prior to mid-2014, consider whether a conflict minerals risk factor should be included in the registrant’s next periodic report.