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(Read the full press release.)

The Securities and Exchange Commission recently adopted final disclosure and reporting rules as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act requiring certain public companies to disclose on a new Form SD their use of conflict minerals originating in the Democratic Republic of the Congo (the DRC) or an adjoining country.

For companies subject to these new rules, as described below, compliance will be required on a calendar year basis (regardless of a company’s fiscal year) beginning January 1, 2013.  The first report on Form SD will be due May 31, 2014 (and on every May 31 thereafter).  See the flowchartissued by the SEC for an understanding of the steps required to comply with these new rules.  The Form SD and the conflict minerals information disclosed therein, will be deemed “filed” (not “furnished”) under the Securities Exchange Act of 1934 and will be subject to Section 18 of the Exchange Act, which deals with liability for any false or misleading statements.

This Update summarizes the key elements of these new rules and provides practical guidance. (Read full article.)

• The Final Rules exclude conflict minerals that come from recycled or scrap sources, that is, minerals that are derived from metals that come from reclaimed end-user or post-consumer products, or scrap-processed metals created during product manufacturing.
• The Final Rules exclude conflict minerals that were smelted or fully refined or were outside the DRC prior to January 31, 2013, that is, they were “outside the supply chain.”
• The Final Rules exclude registrants that mine or contract to mine conflict minerals unless the registrant also engages in manufacturing.
• The Final Rules revise the trigger for when a registrant would be required to conduct due diligence and provide a Conflict Minerals Report. The proposed rules would have required such due diligence and the provision of a Conflict Minerals Report when the registrant determined that its conflict minerals originated in the DRC or came from recycled or scrap sources or when the registrant was unable to determine that its conflict minerals did not originate in the DRC. Under the Final Rules, a registrant is required to exercise due diligence if the registrant determines, based on a “reasonable country of origin inquiry,” (i) that its conflict minerals originated in the DRC and did not come from recycled or scrap sources; or (ii) that it has reason to believe that its conflict minerals may have originated in the DRC and may not have come from recycled or scrap sources. A registrant that determines, based on this due diligence, that its conflict minerals did not originate in the DRC or that its conflict minerals did come from recycled or scrap sources does not need to provide a Conflict Minerals Report. …..

(Read the full article.)

Action Items
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
supplier contacts.
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.

MPT Statement ：

1. Although MPT does not directly purchase metal raw materials, we strongly express that we do not support and do not use any metal mineral such as cobalt (Co), stannum (Sn), palladium (Pd), tantalum (Ta), wolfram (W) or gold (Au) extracted from mining fields with armed conflict, illegal exploitation, or shoddy work environment in the Democratic Republic of Congo (DRC) and its neighboring countries.

2. In order to avoid the use of metal from illegal exploitation among raw materials and during the production process, MPT requires suppliers to refuse the use of any “Conflict Minerals” from conflict areas and to verify the source of the mineral.  It also requires suppliers to communicate this requirement to its upstream suppliers to fulfill the responsibilities of enterprise citizens together.

(Full statement.)

(Full article.)

1. Understand the issue: There are a variety of good resources available to get informed about the impact of conflict minerals, including an upcomingWebinar by Source 44 and a slightly older, but excellent video by the Enough Project (full disclosure, Green Impact is helping to produce the Webinar).
2. Build on the EICC/GeSI Protocol: Don’t reinvent the wheel–build your response upon the successes of the Electronics Industry Citizenship Coalition (EICC) and Global e-Sustainability Initiative (GeSI) reporting template, even if you are in a different industry.
3. Go deep into your supply chain: Successfully understanding what is lurking in your supply chain will require more than sending out a spreadsheet to your Tier 1 suppliers.
4. Get ahead of the regulatory curve: There is no need to wait until the regulations are promulgated to begin navigating your supply chain. While the final details of implementation are unclear, the intention of the Dodd-Frank act is clear – if you have conflict minerals in your supply chain, be prepared to disclose your due diligence strategy.

(Read full article.)

1. PCH has strong management systems in place to implement our policy on conflict minerals, aligned with the OECD Guidelines 5-step process for eliminating risk
2. The management team identifies and responds to risks that may occur in the future.
3. We are committed to reporting all information regarding conflict minerals on an annual basis.

International Collaboration

We are actively collaborating with Business for Social Responsibility and BluSkye to implement the best and most sustainable supply chain operations for our clients.

To support the industry in which we operate, PCH is signing up to become a member of the EICC, to ensure that the use of conflict minerals is eliminated in the supply chains of the consumer electronics industry.

(PCH website)