The SEC is finalizing a rule requiring companies to disclose their use of conflict minerals originating from the Democratic Republic of Congo and neighboring countries. Thousands of companies that manufacture products containing tin, tantalum, tungsten or gold will need to undertake supply chain due diligence to determine the source of these minerals and file public reports. The rule aims to increase transparency around conflict minerals and drive markets toward verifiable conflict-free supply chains. Affected companies should begin compliance work during 2012 to meet new disclosure requirements starting in early 2013. Resources Global Professionals can assist companies with compliance through their experience in global sourcing, auditing and technology issues.

1. Issue Alert: Conflict Minerals
May, 2011
SEC READIES FINAL RULE AFFECTING PUBLIC REPORTING FOR THOUSANDS OF COMPANIES, BRINGING
SIGNIFICANT TRANSPARENCY TO THEIR SUPPLY CHAINS.
Background
Widely viewed as an instrument of financial reform, the Dodd-Frank Wall Street Reform and Consumer
Protection Act (“Dodd-Frank”) also spells out significant changes for the Supply Chains of many foreign
and domestic companies that are SEC issuers. Within Dodd-Frank, the Conflict Minerals Provision (“Rule
1502”) will require significantly increased transparency for thousands of companies that manufacture (or
contract to manufacture) goods that contain materials dubbed “conflict minerals”. To ensure compliance,
affected companies will be required to undertake significant action. We are monitoring this issue and
actively developing an approach to support client compliance with this aspect of Dodd-Frank. Affected
clients will be required to do significant work during 2012 to comply.
Conflict Minerals: What they are and why action is being taken now.
The term “conflict mineral” refers to cassiterite, columbite-tantalite, gold, wolframite, or their derivatives.
In their finished form, they are more commonly known as gold and “the three T’s” (Tantalum, Tin,
Tungsten). When sourced from the Democratic Republic of the Congo (the “DRC”) and neighboring
countries, the resulting profits are used to support brutal violence and repression. The conflict has
resulted in 5.5 million deaths and is considered to be the deadliest conflict since World War II.
While these minerals are not all household names, they are ubiquitous in this global and electronic age
and can be found in common consumer products such as jewelry, mobile telephones, computers,
videogame consoles, digital cameras and other items that use electronic circuits and components. With
their wide application in industrial processes, they are pervasive as well in these areas: tin alloys and
plating, solder, industrial tooling, jet engine components, communications equipment, aerospace
equipment, metal wires, electrodes.
The intent of this rule is to require transparency that will drive markets toward both the substitution of
materials and/or the development of a verifiable supply chain for “conflict-free” minerals. There is no
prohibition for continued use of conflict minerals nor is there any “penalty” per se imposed on those
companies that continue to use conflict minerals in their products.

2. What’s Next?
Dodd-Frank provides high-level direction and the SEC is now developing the details of the final rule. Public
comment on the proposed Rule has ended. The final rule, initially targeted for issue on April 15, 2011, will
now be issued in the August to December, 2011 time frame. The effort required to fully comply could
require many months of work. Those companies that are most impacted would have to not only publicly
disclose their use of conflict minerals, but would also have to furnish an audited Conflict Minerals Report
as an exhibit to their Annual Report. It is expected that companies will need to perform this work during
calendar 2012 for disclosure in early 2013.
Thousands of companies will be required to review this law and assess the level of required compliance.
They will fall into four categories:
1. Companies that manufacture or contract to manufacture products with conflict minerals and are
unsure of their origin or verify that some of their conflict minerals come from the DRC countries:
Required to perform extensive Supply Chain due diligence and file an independently audited
Conflict Minerals Report as an addendum to their 10-K.
2. Companies that manufacture or contract to manufacture products with conflict minerals and can
verify that their conflict minerals do not come from the DRC countries: Required to perform
significant Supply Chain due diligence to verify the country of origin for their conflict minerals and
then disclose this information publicly.
3. Companies that manufacture or contract to manufacture products that do not rely on conflict
minerals: No significant action required beyond internal verification.
4. Companies that are not SEC issuers and/or do not manufacture or contract to manufacture
products: No action or disclosure required.
While the final form of the rule could change its applicability or burden to some companies, it is also clear
that there is a wide swath of companies that will be heavily impacted regardless of its final form.
Our Role
We anticipate that companies impacted by this regulation will require outside assistance to comply. Our
consultants’ experience in global sourcing as well as audit and technology issues will provide a significant
advantage in supporting client compliance and implementation. We will continue to monitor this issue,
engage with clients and thought leaders on its specifics, and work with our client base to assure successful
compliance.

3. ABOUT RESOURCES GLOBAL PROFESSIONALS
Resources Global Professionals is a multinational professional services firm that helps business
leaders execute internal initiatives. Working as members of client teams, we solve problems,
execute and transfer knowledge. Partnering with business leaders, we drive internal change across
all parts of a global enterprise - finance and accounting, information management, internal audit,
human capital, legal services and supply chain management.
Resources Global was founded in 1996 within a Big Four accounting firm. Today, we are a publicly
traded company with over 2,700 professionals, from more than 80 practice offices, serving 2,200
clients around the world. Headquartered in Irvine, California, Resources Global has served 81 of the
Fortune 100 companies.
For additional information, please contact your Resources Global Professionals Client Service
Director. www.resourcesglobal.com
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