Most Companies Cautious When Talking About Conflict Minerals

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By Andrea Vittorio

Companies such as Intel Corp., Kemet Corp., and Texas Instruments Inc. remain among a very small group that can say minerals in their supply chains don’t fund conflict in Africa, an analysis of this year’s regulatory filings found.

The vast majority of corporate reporting on conflict minerals still doesn’t make a determination, according to the Aug. 17 report from Source Intelligence, which helps companies track the source of minerals used in their products.

“There are very few companies that can confidently claim ‘conflict-free,’” Lina Ramos, Source Intelligence’s chief business officer, told Bloomberg BNA. “Most companies still report conservatively and say ‘no determination.’”

More companies than last year reported that they were at least partly conflict-free, the report showed. The rest said they didn’t source from the Democratic Republic of Congo and neighboring countries, where the mining and trade of certain minerals have been linked to violence and human rights abuses.

Companies that make computer chips, jewelry and other products containing tin, tantalum, tungsten, or gold must report to the Securities and Exchange Commission each year on their source. Such disclosures, in their fourth year, may be in for a regulatory rollback if Republican policymakers have their way.

Fate Uncertain

Until recently, the conflict minerals reporting rule spent years in a legal battle with industry groups, who didn’t want companies to be forced to say if their products aren’t conflict-free. Human rights groups have defended the disclosure requirement, saying it gives insight into how companies address risk in their supply chains.

The rule is now getting a second look from the SEC. A spokeswoman for the commission didn’t comment on where that process stands. The State Department is also looking into how best to support responsible sourcing of conflict minerals.

Despite the political uncertainty, most companies still submitted conflict minerals disclosures as usual this year, an earlier review by the nonprofit Development International found.

The maximum page length of those disclosures rose since last year, which Source Intelligence considers a sign of increased transparency. Companies are also more willing than in past years to talk about smelters that process minerals in their supply chains, which was once a more challenging piece of information to obtain.

Ramos said companies are moving toward supply chain transparency “for reasons beyond regulation” amid pressure from consumers, investors, and others. “They truly see it as a product stewardship imperative as much as a legal compliance issue,” she said.

To contact the reporter on this story: Andrea Vittorio in Washington at avittorio@bna.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bna.com

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