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Conflict Minerals Traceability Auditing
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Conflict Minerals Traceability Auditing

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An overview of Conflict Minerals traceability auditing.

An overview of Conflict Minerals traceability auditing.

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  • This is a very good summary of a number of the initiatives ongoing in the conflict minerals supply chain. As these activities progress, the issue of conflict minerals is really going to heat up. End-users are scrambling to keep their brand names out of the crosshairs. Everyone denies purchasing any material from conflict areas, and industry associations are lobbying to keep things unchanged.

    We need to continue to educate the industry of the importance of providing conflict-free products.

    We need more pieces like this presentation.

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  • 1. The Auditing Roundtable January 2011 San Diego, California Lawrence Heim, CPEA The E LM Consulting Group International LLC
  • 2.
    • Minerals mined in conditions of armed conflict and human rights abuses, notably in the Democratic Republic of the Congo (DRC) and adjacent countries.
    • Tin (Cassiterite)
    • Tungsten (Wolframite)
    • Tantalum (Coltan)
    • Gold
    The E LM Consulting Group International LLC
  • 3.
    • Tin – solder, sheet metals, alloys
    The E LM Consulting Group International LLC
  • 4.
    • Tungsten – tungsten carbide bits/tools, ammunition, electronics, jewelry
    The E LM Consulting Group International LLC
  • 5.
    • Tantalum – capacitors, aerospace components, medical devices
    The E LM Consulting Group International LLC
  • 6.
    • Gold – jewelry, electronics, dental, medical
    The E LM Consulting Group International LLC
  • 7.
    • SEC Legal Compliance
      • Conflict Minerals Law under Dodd-Frank Wall Street Reform Act (July 2010)
      • SEC Regulations proposed Dec. 15, 2010
    • International Trade Programs
      • Organisation for Economic Co-operation and Development (OECD)
    The E LM Consulting Group International LLC
  • 8.
    • Industry Initiatives
      • Electronics, Jewelry
    • Reputation
      • Funding systemic violence and corruption
    • Investor Activism
    • Customer Demands
    The E LM Consulting Group International LLC
  • 9.
    • SEC
      • Companies: Publicly traded, certain foreign companies, any size
      • Industries: Manufacturers, processors, smelters, mining, scrap, certain retailers
    The E LM Consulting Group International LLC
  • 10.
    • OECD
      • Companies: Any structure, domicile, size
      • Industries: Manufacturers, processors, smelters, mining, retailers
    • Trade Associations
      • Specific industries, Members only
      • Jewelers, electronics, components, retailers, aerospace, automotive
    The E LM Consulting Group International LLC
  • 11.
    • SEC
      • Intentionally undefined
    • OECD
      • Representative sampling parameters
      • Supplier financial interests and material sources
      • Review known mineral reserves
      • On-site meetings with government, UN, NGOs
    The E LM Consulting Group International LLC
  • 12.
    • Trade Association
      • 100% sampling of transaction documents
      • Comprehensive inventory review (e.g., inventory reconciliation, material balance, weighing lots, in-process tracing)
      • Scrap included/excluded
      • Each link in a supply chain must pass an audit in order for any single link to pass
    The E LM Consulting Group International LLC
  • 13. The E LM Consulting Group International LLC Retailer Product Manufacturer Component Manufacturer Mineral Processor Ore Origin/Export
  • 14. Retailer Product Manufacturer Mineral Processor Ore Origin/Export Component Manufacturer The E LM Consulting Group International LLC
  • 15.
    • Auditor Requirements
      • Independent private sector auditor mandated
      • Competence, independence, attestation
    • Management System Details
      • Procurement policy mandated
      • Unannounced checks of suppliers
      • Reporting to NGOs, third parties
    The E LM Consulting Group International LLC
  • 16. Audit Process Challenges
    • Not traditional HSE audit scope - different process, different skills, different reporting
    • Requirements for auditor competence, attestation, independence
    • No standard process
    • Representative sampling up to 100%
    • All links must pass
    • Public disclosure of report
    The E LM Consulting Group International LLC
  • 17. Contact
    • Lawrence Heim, CPEA
    • T HE E LM C ONSULTING G ROUP I NTERNATIONAL LLC
    • 678-200-5220 (office)
    • 678-200-3424 (cell)
    • [email_address]
  • 18. The Auditing Roundtable January 2011 San Diego, California Lawrence Heim, CPEA The E LM Consulting Group International LLC