Conflict Minerals Research Emphasizes Need for Mine-Based Risk Control

SEATTLE (ITRI.CO.UK): Research published in October 2017 has highlighted a 'troubling trend' in 2017 corporate conflict minerals reporting towards more 'tick-box' compliance testing and away from stronger 'risk-based' due diligence approaches to use of 3T and other minerals in their products. This emphasises the importance of programmes such as iTSCi that aim to control risk at mine sites themselves rather than entirely rely on downstream or smelter efforts that are very remote from the real issues.

'Mining the Disclosures 2017' was published by the Responsible Sourcing Network, a project of the 'As You Sow' NGO. The report is the fourth consecutive annual update of their research scoring US Securities and Exchange Commission (SEC) filing data for a sample of 206 companies using 21 Key Performance Indicators (KPI) related to Risk Management, Human Rights and Reporting. 85% of the sample group scored as Adequate, Minimal or Weak in 2017 compared to only 64% in 2016. The ability of companies to identify an existing risk inside their supply chains dropped by over a third and less companies were verifying suppliers responses.

The authors mainly attribute this declining momentum to 'unhelpful uncertainty' over future of the conflict minerals clause 1502 in the Dodd-Frank Act, although the top five leading companies - Intel, Microsoft, Qualcomm, Apple & Royal Philips – continue to implement proactive, due-diligence-based strategies.

By contrast the report notes 'significant improvements achieved for production and exports from "conflict-free" 3T mines' led by the iTSCi program and others. Also noted was an improvement in adoption of conflict minerals policies and response strategies by smelters or refiners.

Based on these results the Responsible Sourcing Network calls on investors to adopt more comprehensive, proactive policies and strengthen support for existing multi-stakeholder initiatives, including on-the-ground efforts to source from legitimate mines. Any downstream company wanting to respond by engaging more closely with risks at 3T mines can join ITSCI to contribute to the work in a positive way and receive all information they require.

Courtesy: www. itri.co.uk