EU Postpones Raw Material Sourcing Expansions

By spring, the European Commission is expected to temporarily shelve plans empowering European companies to obtain expanded access to raw materials worldwide.  This comes amid public, governmental and industry calls for greater traceability of imported minerals from African countries to better screen supply chain conflict minerals.

Last November, EU’s Executive Commission stated it would be assertive about securing access to foreign markets and scarce natural resources and that this would be part of a plan to help the EU battle the economic crisis.  That statement came on the heals of China moving to restrict exports of rare earths. Rare earths are the raw materials used in everything from wind turbines to mobile phones.

A European Commission spokespeople told EurActiv — which by the way is an excellent news source for this sort of thing — that the issue of transparency in the extractive industry will be reflected in the EU’s new communication on raw materials.  This new communication was originally due to to be published today (Jan. 26), but publishing has since been postponed.

However, Commission representatives also said that the situation in the mining sector in some African countries was “complex” and full traces of imports would be difficult to carry out in practice.

EU Initiative

Objectives of the EU Initiative include provisions that the actions and recommendations for further EU Initiative activity should be based on the 3 major pillars identified in the Raw Materials Initiative or RMI, as follows:

1. Ensure a level playing field in access for resources in third world countries.
2. Foster a sustainable supply of raw materials from European sources.
3. Reduce consumption of primary raw materials by increasing resource efficiency and promoting recycling/reuse.

IPC Weighs in Heavy
IPC as always takes the “smart and firm” stance on the issue of conflict sourcing.

Although reporting requirements only apply to companies required to report to the SEC, it is expected that these requirements will rapidly be passed through the entire supply chain. The requirements are expected to flow down from the publicly traded companies through the entire supply chain from the OEMs to the solder manufacturers and everyone in between. Ultimately, while this is targeted to reporting, the reporting requirements will undoubtedly impact the selection of suppliers throughout the supply chain, as public companies now will be responsible for detailed knowledge about the location of source materials affected by the new regulations. Today, companies have no mechanism through which to comply with this requirement.

Scary observation but spot on.
Conflict Sourcing Regulations
Another industry compliance Blog by the Actio Communications Network weighs in with the latest regulatory news by saying that these source material regulations are to be adopted no later than April 15, 2011.  It’s all happening faster than one might think.

In the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama on July 21, 2010, are new requirements for manufacturers of products containing tin, tantalum, gold, tungsten or any other “conflict metals.”

The Act includes these provisions regarding minerals sourcing:

  • Section 1502 requires persons to disclose annually whether any conflict minerals that are necessary to the functionality or production of a product of the person, as defined in the provision, originated in the Congo or an adjoining country and if so to report on due diligence on the source and chain of custody of those minerals, which must include an independent private sector audit of that report that is certified by the person filing the report
  • Section 1504 requires reporting issuers engaged in the commercial development of oil, natural gas, or minerals to disclose in an annual report certain payments made to the United States or a foreign government

Regulations required by Sections 1502 and 1504 must be adopted no later than 270 days after the Dodd-Frank Act’s enactment, so the latest would be April 15, 2011.

For more on sourcing regulations in the US, see http://www.actio.net/default/index.cfm/actio-blog/conflict-minerals-electronics-and-the-sec/.

Your Supply Chain
Blood in the Mobile is a documentary released last September.  It’s about the cell phone manufacturing and conflict minerals.  Of course, every industry is different.  But deep inside we’re all the same:  raw materials and a supply chain made of compassion, or at least, of humanity.

So, what’s in your product?

http://supply-chain-data-mgmt.blogspot.com/

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