Three years after U.S. companies were required to start filing reports about their efforts to check their supply chains for minerals linked to armed militia groups in Africa, more than 70 percent say they still cannot make a determination.
Conflict minerals are difficult to dig out of U.S. supply chains.
Three years after U.S. companies began filing reports about their efforts to find minerals linked to armed militia groups in Africa in their supply chains, more than 70 percent say they still cannot make a determination.
More than 1,200 companies from Apple to General Motors filed conflict-mineral reports due to the Securities and Exchange Commission by June, according to separate analyses this month backed by the two largest conflict-minerals software companies, Assent Compliance and Source Intelligence.
U.S.-listed companies are required to investigate their supply chain for the presence tin, tantalum, tungsten and gold, under a rule stemming from the 2010 Dodd-Frank Act. The law is meant to choke off mining revenue to militia groups in the Democratic Republic of the Congo and adjacent countries.
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It’s controversial whether the rule has achieved that goal. The United Nations Security Council said in June that rebels are still profiting, despite the laws.
But analyses of the reports show that corporate conflict-minerals reports are boosting supply-chain transparency. Companies like Apple are even starting to kick noncompliant suppliers out of their supply chains.
“Companies that have been able to make a business case out of this and are looking at this as a litmus test for their suppliers are going to be seen as leaders,” said Chris Bayer, an independent academic with nonprofit Development International, which conducted the study backed by Assent and other organizations.
Apparel and electronics companies report supplier-response rates to conflict-minerals surveys at around 90 percent on average, but the figure is as low as 70 percent in the oil and gas industry.
More than 100 companies, or about 10 percent of all the conflict-minerals filers, said or implied they had conflict-free products, Bayer found. But only 19 companies, including Intel and Texas Instruments, actually underwent an audit for those claims on one or more of their products.
Still there is a long way to go to reach full compliance with the SEC rules, Bayer said.
Aside from the many incomplete reports, he estimates that hundreds of companies in the affected industries should be filing conflict-minerals reports with U.S. regulators but aren’t.