There is an increasing awareness of violence and human rights violations in the mining of certain minerals from an area described as the “Conflict Region,” located in the Democratic Republic of the Congo (DRC) and surrounding countries. As a result, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 directed the U.S. Securities and Exchange Commission (“SEC”) to adopt rules to implement disclosure requirements related to these “conflict minerals.” These rules apply to manufacturers who file periodic reports with the SEC and who manufacture or contract to manufacture products containing “conflict minerals” that are “necessary to the functionality or production” of those products. These manufacturers are required to make inquiries as to the origin of these “conflict minerals” and file a report with the SEC to describe and disclose the results of these inquiries.
On August 22, 2012, the U.S. Securities and Exchange Commission (SEC) approved the final rule regarding the sourcing of conflict minerals under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under this rule, publicly traded companies must report to the SEC the presence of conflict minerals originating in the DRC or adjoining countries in the products they manufacture or contract to manufacture if the conflict minerals are necessary to the functionality or production of a product. These reports must be filed annually by May 31st beginning in 2014 “Conflict minerals” refers to tin, tantalum, tungsten, and gold (also known together as “3TG”), which are derivatives of cassiterite, columbite-tantalite, and wolframite, regardless of where they are sourced, processed or sold. The intent of these requirements in the Dodd-Frank Act is to further the humanitarian goal of ending violent conflict in the DRC and surrounding countries, which has been partially financed by the exploitation and trade of conflict minerals.
Chemplast supports the aims and objectives of the U.S. legislation relating to the supply of conflict minerals. Our due diligence processes and efforts conform to the relevant portions of the Organisation for Economic Co-operation and Development’s (“OECD”) internationally recognized due diligence framework for responsible supply chains of minerals from conflict-affected and high-risk areas. We do not knowingly procure any 3TG that originates from the Conflict Region unless they originate from mines or smelters that are certified as “conflict free.” To ensure compliance with the Dodd-Frank Act, we ask our suppliers to undertake reasonable due diligence with their supply chains to determine whether 3TG is being sourced from:
- mines and smelters outside the Conflict Region or
- mines and smelters that have been verified by an independent third party as “conflict free” if sourced within the Conflict Region.
Chemplast require our suppliers upon request to conduct their own due diligence and provide written documentation as to whether products containing 3TG used in the manufacture of our products, originate from outside the Conflict Region or if they originate from within the Conflict Region, that the mines or smelters be verified as “conflict free” by an independent third party. If we discover products containing 3TG procured by us is produced in the Conflict Region from facilities that are not verified “conflict free” facilities, we will use our best efforts to transition the product to be conflict free. While striving to avoid sourcing product containing 3TG from unverified smelters or refiners, Chemplast does not intend to prevent its suppliers from sourcing from verified mines located within the DRC and surrounding countries (as doing so could be detrimental to the legitimate economies and populations of those countries). Suppliers are encouraged to continue support of verified smelters in the Conflict Region and are advised to take similar measures with their sub-suppliers to ensure alignment and traceability throughout the supply chain and back to the smelter.
The information provided by Chemplast’s suppliers is used to conduct our due diligence, including assessing reports for completeness and consistency. We compare the aggregation of smelter lists provided by our suppliers with the Conflict-Free Sourcing Initiative (CFSI) list of compliant smelters to determine which smelters are DRC conflict free. Information provided by our suppliers is used in the development of Chemplast’s Conflict Minerals Report Form.