EU Conflict Minerals Update
& Amnesty Intl Report
Assent Compliance Webinar
Jonathan Hughes
5/26/2015
Ottawa
Agenda
•Intro
•Amnesty Intl
Report
•EU Conflict
Minerals
•What’s next
•Q&A
Introduction to Assent
Assent Compliance specializes in IT solutions and Support programs that help organizations with their Global
Compliance strategies. Assent's Industry leading platform is used by over 30% of S&P 500 companies for a
wide range of regulations from Conflict Minerals to Restricted Substance Control, Social Compliance,
Inspections, Audits and more.
Assent is your Compliance Partner for Global Compliance Requirements
FEATURES
• Full Turnkey Support services that allow Assent to handle all facets of your Compliance Program
•Industry Leading SaaS Compliance Platform
• Automated Data Validation, Risk Analysis and Completeness checks
• Supplier Engagement including Education. Follow-up, Corrective Actions and Supplier Audits
• Workflow Management allowing our clients to encompass all tasks within their Compliance Program in 1
place
• 1 stop shop for all your Compliance needs with Assent’s scalable Platform and Support Program
[email protected]
| www.assentcompliance.com
|
TEL: 1(866)964-6931
Slide 4
Amnesty International Report
 Amnesty International Report released last month with the claim that 80% of companies are not complying
their Conflict Minerals Requirements
• http://www.amnestyusa.org/sites/default/files/digging_for_transparency_hi_res.pdf
• Scoring Criteria can be found on Page 6 (and is the source of the main arguments by both sides
 Industry push back stating that the scoring system used by Amnesty International was not inline with DoddFrank
 Amnesty’s position is that their scoring system uses the spirit of the law and the OECD Due Diligence
criteria
 Both sides have some merit
[email protected]
| www.assentcompliance.com
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TEL: 1(866)964-6931
Slide 5
Amnesty International Report
 Key Amnesty Criteria that are above and beyond Dodd-Frank
• All comes down to language of “Must describe xyz…”
• Ex: #5 states “carry out and describe due diligence measures taken on the source and chain of custody of the four
minerals, including metal processors as well as direct suppliers;”
 Key criteria that although not in Dodd-Frank, are in the OECD and should be part of your program
• Most of the items are in the OECD Guidance but issuers don’t necessarily need to describe them
• Ex #10 “develop a risk identification and assessment process and describe its efforts to identify risk in its supply
chain in its report;”
 NOTE: This was the 3rd study done of Conflict Mineral Reports
• Lawrence Heim Study
• IPC Study (which Assent was a part)
[email protected]
| www.assentcompliance.com
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TEL: 1(866)964-6931
Slide 6
EU Conflict Minerals – Quick Takeaways
 The previous proposal for a mostly voluntary Conflict Minerals scheme has been overturned
 The EU has adopted an amended draft law by a margin of 402 for, 118 against and 171 abstentions
 All EU Refiner and Smelters to undergo mandatory 3rd party audits (this affects a limited number of
companies)
 All downstream users, 880,000 potentially affected EU firms, must provide “information on the steps they
take to identify and address risks in their supply chains for the minerals and metals concerned.”
 The reading has not closed and EU Parliament has now entered into informal talks with the EU Council
to discuss implementation of the law
 Important to note, that this law could still change but it is highly unlikely to go back to a Voluntary
scheme. The genie is out of the bottle.
[email protected]
| www.assentcompliance.com
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TEL: 1(866)964-6931
Slide 7
EU Conflict Minerals – Differences from
Dodd-Frank
 2 main differences:
 Not limited to issuers.
• Initial proposal calls for all affected EU Manufacturers to provide information
• No de minimus, Issuer requirements or company size thresholds (yet)
 GLOBAL SCOPE…
• “conflict-affected and high-risk areas' as those in a state of armed conflict, with widespread violence, the collapse of
civil infrastructure, fragile post-conflict areas and areas of weak or non-existent governance and security,
characterised by "widespread and systematic violations of human rights"
 Next Steps (And by Steps, I mean bureaucratic fist-fight)
 Informal talks to begin with EU Member states in order to seek final version of the law
 Need to indentify what information is to be provided and who the enforcement body would be
[email protected]
| www.assentcompliance.com
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TEL: 1(866)964-6931
Slide 8
EU Conflict Minerals – What’s next
 Need for clarification on the following items:
 What “information” is to be provided?
 Who the enforcement body will be?
• EU agency?
• Country level?
 Confirmation of Scope
• Companies
• Regions
[email protected]
| www.assentcompliance.com
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TEL: 1(866)964-6931
Slide 9
EU Conflict Minerals – What’s next
 Assent has been asked to provide feedback in various stakeholder forums and will be providing
continued updates as more information is made available
 Likely next moves
 EU Industry to push back very hard on these new requirements but a roll back to a completely voluntary
scheme for all downstream users is not realistic – a compromise is much more likely.
 Look for the Scope to be clarified with respect to companies in scope (specifically small and medium
businesses)
 The final law will be in line with the OECD standards
 The major fight could be over regions in scope
• Strong feelings fro EU parliament supporters over making this is a global issue but not currently practical
• 2 year phase-in makes the most sense as EU companies would be able to mirror US issuer initiatives
[email protected]
| www.assentcompliance.com
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TEL: 1(866)964-6931
Slide 10
The Conflict Minerals Benchmark Report
 Last year there were 3 different “scores” done on CMRs, all using different scoring criteria
• Amnesty International
• IPC
• Lawrence Heim
 These were all done on a sampling of responses (Approx 100 each)
 Assent Compliance has commissioned a Study from Tulane University to analyze ALL 2015 CMR
submission (yes – ALL) against all 3 different scoring criteria to create a weighted average.
 These findings along with scores and ranking will all be made publically available
[email protected]
| www.assentcompliance.com
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TEL: 1(866)964-6931
Slide 11
The Conflict Minerals Benchmark Scorecard
 This is going to involve a lot of resources (over 20 people are conducting the study).
 The Advisory board includes:
•
•
•
•
•
•
Lawrence Heim
IPC
The Responsible Sourcing Network
KPMG
EY
Assent Compliance
 This will be the biggest and most comprehensive Conflict Minerals Report ever undertaken
 Perfect to use to Benchmark your program against any other affected issuer
[email protected]
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TEL: 1(866)964-6931
Slide 12
The Conflict Minerals Benchmark Scorecard
 Timelines
 Initial Data Webinar – 2nd week of July
 First Analysis Webinar – August
 Issuer Commentary and Feedback Webinar – September
[email protected]
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TEL: 1(866)964-6931
Slide 13
General Updates
 Marcus Evans Conference – Chicago June 23-25. Please join us.
 Assent Currently Providing Free 0 Commitment Required, Guided Trials of Software and Services For
The 2016 Reporting Year. Let show you why 30% of S&P 500 Firms in Scope Partner with Assent
[email protected]
| www.assentcompliance.com
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TEL: 1(866)964-6931
Slide 14
Questions
?
[email protected]
| www.assentcompliance.com
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TEL: 1(866)964-6931
Slide 15