B Cubed Consulting
Conflict Minerals Update
Brenda B. Baney
B Cubed Consulting, Inc
May 17th, 2017
Agenda
• CFSI/AIAG Outreach update
• CMRT 5.0
– Connection to IPC 1755 Standard
– Updates from 4.x Versions
– Timing
• Latest News
AIAG Smelter
AIAG Engagement
Set Team Team
members
&
3
collaborate towards a common set of goals
Process Flow from Alleged to Compliant
Smelter
CFSI Compliant
(passed audit)
Alleged
Smelters
Compiled
from CFSI
member
company
smelter lists
CFSI
research
Probable
Smelters
Not a
Smelter
CFSI smelter
confirmation
Confirmed
Not a
Smelter
AIAG outreach
Active
(signed up
for audit)
Not Participating
in audit program
AIAG SET Accomplishments
Current CFSI or CFSI SET Member Activity:
Outreach
Research
Probable Smelter
Confirmation
• Purpose: Disposition
alleged smelters as
probable or not a
smelter
• Purpose: Confirm
probable smelters in
order to include in
Smelter Reference List
• Purpose: Encourage
known smelters to
participate in Conflict
Free-Audit & become
Conflict-Free certified
AIAG has researched
over 600 alleged
smelters
AIAG reached out to
nearly 70 probable
smelters
AIAG has contacted
over 132 known
smelters
On-line
research,
calls,
letters
Letters,
calls
Letters,
calls,
visits
CMRT 5.0
• The Conflict Minerals Reporting Template or CMRT
– Updating from last years Revision 4.20 to 5.0 to be
released by CFSI (Conflict Free Sourcing Initiative). AIAG
has been a strong industry partner of CFSI since 2011.
– CFSI administers the audit program which uses the OECD
global standards to determine which smelters and refiners
can be validated as “conflict-free”. See CFSP on the CFSI
site. www.conflictfreesourcing.org
CMRT vs. IPC 1755 Standard
•
EICC-GeSI first created the Conflict Minerals Reporting Template (CMRT),
then formed the Conflict Free Sourcing Initiative (CFSI), which worked with the
IPC 2-18H Standards committee to create the IPC-1755 standard
 CMRT: primary method of data collection, conforms to IPC-1755 (Excel)
 IPC-1755 XML: standard protocol for CM data transmission
•
IPC 2-18H committee defines the IPC-1755 data entry fields & questions, while
CFSI provides formatting, explanations, instructions, and smelter lists including
Smelter IDs, names, etc. E-30 committee for white paper, guidance doc, etc…
•
IPC Standards committee participation is open to all, with no membership
requirement, but you must often attend major (voting) meetings in person
•
Companies are beginning to experiment with sending CM Declarations
directly computer-to-computer, without human intervention (emailing)
Proposed changes
Impacts CMRT Declaration Tab - Company Information Section
•
Contact Information Country
• Current: Country names are used, not according to a standard.
• New: Use ISO 3166-1 country names and 2-character codes
for the country where contact is located.
•
Contact Information State
• Current: State/province names are used, not according to a standard.
• New: Use ISO 3166-2 state/province names and codes
for state or province where contact is located.
Proposed changes
Impacts CMRT Declaration Tab - Due Diligence Section
Q1: Current:
New:
Q2: Current:
New:
Q5: Current:
Is the 3TG intentionally added to your product?
Is any 3TG intentionally added or used in the product(s) or in the production process?
Is the 3TG necessary to the production of your company’s products and contained
in the finished product that your company manufactures or contracts to manufacture?
Does any 3TG remain in the product(s)?
Have you received data/information for each 3TG from all relevant suppliers?
New:
What percentage of relevant suppliers have provided a response
to your supply chain survey?
Current:
 100%
 > 75%
 > 50%
< 50%
 <25%
 None
New:
 100%
 > 90%
 > 75%
 > 50%
 <50%
 None
Proposed changes
Impacts CMRT Declaration Tab - Policy Section
Question A
Current:
New :
Do you have a policy in place that addresses conflict minerals sourcing?
Have you established a conflict minerals sourcing policy?
Question F
Current:
Do you collect conflict minerals due diligence information from your
suppliers which is in conformance with the IPC-1755 Conflict Minerals Data
Exchange standard [e.g., the CFSI Conflict Minerals Reporting Template]?
Does your company conduct Conflict Minerals survey(s) of your relevant
supplier(s)?
New:
Question G
Current:
New:
Do you request smelter names from your suppliers?
{Question has been removed}
Question J
Current:
New :
Are you subject to the SEC Conflict Minerals rule?
Is your company required to file an annual conflict minerals disclosure with
the SEC?
Proposed changes
Impacts CMRT - Smelter List Tab
• Smelter Reference Name: “Standard” Smelter Names must be English
characters (extended ASCII ISO 8859 Latin-1)
• Smelter Name: “Typed-In” Smelter Name may be in any language (UTF-8)
• Smelter Country: The ISO 3166-1 two-character country name and code
where the smelter for the 3TG is located. "Unknown" and “Not Listed” are
also permitted. This field is mandatory.
• Smelter State/Province: ISO 3166-2 state/province names and codes for
state or province where the smelter is located. This field is optional.
• Some fields will only be unlocked when data is needed for additional of
new ‘Smelters not listed.’ Fields/Columns may be hidden unless needed.
Smelter List - new country dropdown
Timing for CMRT 5.0 release
• Postponed 2 weeks to allow for continued
testing of all new features
• Planned May 2nd to send to service providers
• May 12th public statement and release of new
template on
www.conflictfreesourcing.org
U.S. Legislation
• SEC is reviewing their enforcement activities as they try to resolve uncertainty
– April 3rd ruling by the District Court upholding that the Dodd-Frank rule violates companies
1st amendment rights by forcing disclosure of ‘conflict-free’ or ‘not conflict-free’ status
• Department of State seeking input on Responsible Conflict Mineral Sourcing.
– The comment period was open until April 28, 2017.
th
• Senate Hearing about continuation of Dodd-Frank took place April 5 , 2017
with input from industry, social societies, and a regional perspective. While
attendees noted mixed results the group mostly supported a continuation of
conflict minerals data gathering efforts with a focus on removing the portions
of the rules that increased costs and burden.
• Where will this end up?
– Unknown at this time, although several global companies have committed to
continued actions as part of their social responsibility initiatives.
th
– AIAG has their Annual Conflict Minerals Industry Briefing June 7 , 2017
www.aiag.org
Backup
Conflict Minerals Subgroups –
Actions and Stakeholder Involvement
AIAG Conflict Minerals Workgroups
AIAG Smelter Engagement
Team (SET)
• Conducts outreach encouraging smelters to participate
in CFSI
CFSI Engagement
• Participates in key Conflict Free Sourcing Initiative (CFSI)
groups to foster cross-industry engagement on smelter audit
certifications and other conflict mineral reporting processes
Communications/Events
• Develops strategies for CMWG stakeholder outreach;
identifies potential target audiences and
communication opportunities(e.g., events, media, etc.)
Due Diligence
Industry Best Practice
• Creates/supports initiatives to develop tools &
resources to assist companies in their reporting
processes
• Recommendations/drafts information to communicate
common process for the industry
Conflict Minerals Subgroups –
Actions and Stakeholder Involvement
AIAG Conflict Minerals Workgroups
IPC Liaison
• Conveys input on the cross-sector conflict minerals
data exchange standard
iPCMP User Group
• Focuses on due diligence data reporting activities
from a user viewpoint
Minute-Takers
• Captures CMWG meeting minutes and submits to
AIAG for processing
• Contributes industry expertise (materials
Technical Information
Training & Education
composition, IMDS, etc.) for the enhancement of
tools & resources
• Supports CMWG on-going efforts to create
awareness of conflict minerals reporting, and the
resources available to assist the supply chain