The Auditing Roundtable January 2011 San Diego, California Lawrence Heim, CPEA The E LM  Consulting Group International  LLC
<ul><li>Minerals mined in conditions of armed conflict and human rights abuses, notably in the Democratic Republic of the ...
<ul><li>Tin – solder, sheet metals, alloys  </li></ul>The E LM  Consulting Group International  LLC
<ul><li>Tungsten – tungsten carbide bits/tools, ammunition, electronics, jewelry </li></ul>The E LM  Consulting Group Inte...
<ul><li>Tantalum – capacitors, aerospace components, medical devices  </li></ul>The E LM  Consulting Group International  ...
<ul><li>Gold – jewelry, electronics, dental, medical </li></ul>The E LM  Consulting Group International  LLC
<ul><li>SEC Legal Compliance </li></ul><ul><ul><li>Conflict Minerals Law under Dodd-Frank Wall Street Reform Act (July 201...
<ul><li>Industry Initiatives </li></ul><ul><ul><li>Electronics, Jewelry </li></ul></ul><ul><li>Reputation </li></ul><ul><u...
<ul><li>SEC </li></ul><ul><ul><li>Companies: Publicly traded, certain foreign companies, any size </li></ul></ul><ul><ul><...
<ul><li>OECD  </li></ul><ul><ul><li>Companies: Any structure, domicile, size </li></ul></ul><ul><ul><li>Industries: Manufa...
<ul><li>SEC  </li></ul><ul><ul><li>Intentionally undefined </li></ul></ul><ul><li>OECD </li></ul><ul><ul><li>Representativ...
<ul><li>Trade Association  </li></ul><ul><ul><li>100% sampling of transaction documents </li></ul></ul><ul><ul><li>Compreh...
The E LM  Consulting Group International  LLC   Retailer Product Manufacturer Component Manufacturer Mineral Processor Ore...
Retailer Product Manufacturer Mineral Processor Ore Origin/Export Component Manufacturer The E LM  Consulting Group Intern...
<ul><li>Auditor Requirements </li></ul><ul><ul><li>Independent private sector auditor mandated </li></ul></ul><ul><ul><li>...
Audit Process Challenges <ul><li>Not traditional HSE audit scope - different process, different skills, different reportin...
Contact <ul><li>Lawrence Heim, CPEA </li></ul><ul><li>T HE  E LM  C ONSULTING  G ROUP  I NTERNATIONAL LLC </li></ul><ul><l...
The Auditing Roundtable January 2011 San Diego, California Lawrence Heim, CPEA The E LM  Consulting Group International  LLC
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Conflict Minerals Traceability Auditing

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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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Conflict Minerals Traceability Auditing

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

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