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This document provides guidance on completing the Conflict Minerals Report (CMR) required by the SEC. It discusses the 5 steps companies must include in their CMR: 1) establish strong management systems, 2) identify supply chain risks, 3) design and implement a risk management strategy, 4) conduct third-party audits of smelters/refiners, and 5) report annually on supply chain due diligence. The document advises addressing each step by describing conflict minerals due diligence processes and activities, such as data collection, validation, and smelter verification. It also outlines general CMR completion timelines and provides examples of other companies' CMR filings.
Sec reporting
- 1. SEC Reporting Data – The Conflict Minerals Report 2015
- 2. Table of Contents INFO@ASSENTCOMPLIANCE.COM | WWW.ASSENTCOMPLIANCE.COM | TEL: 1-866-964-6931 1. CMR Refresher 2. CMR Process 3. CMR Content – How to Meet the 5 Steps 4. Timeline 5. Examples 6. Q & A
- 3. CMR Refresher INFO@ASSENTCOMPLIANCE.COM | WWW.ASSENTCOMPLIANCE.COM | TEL: 1-866-964-6931 Before we get to the Conflict Minerals Report you need to have found “reason to believe” that some of the 3TGs in your Supply chain may have originated in the covered countries. At that point, you must conduct Due Diligence on those sources in accordance with a nationally recognized framework There's only 1- the OECD's Due Diligence Guidance The activities and results for that Due Diligence is reported in the CMR 5 Steps: 1. Establish Strong Management Systems 2. Identify and assess risks in the supply chain 3. Design and implement a strategy to respond to identified risks 4. Carry out independent third-party audit of smelter/refiner’s due diligence practices 5. Report annually on supply chain due diligence
- 4. CMR Process – Big Picture vs Practical INFO@ASSENTCOMPLIANCE.COM | WWW.ASSENTCOMPLIANCE.COM | TEL: 1-866-964-6931 Big Picture Your Conflict Minerals report should speak to items that would potentially be covered in an Audit: Your process (What did you set out to do) Your execution (Did you follow through with your process) Practical Terms Don’t just copy and paste from the OECD Guidelines. Actually explain your process Include your activities surrounding the following items: Data Collection Data Validation Risk Smelter Verification These activities should be carried out daily, in real-time as you receive Supplier responses Don’t save all the work until the end! All these items should be documented in the system you use to track Conflict Minerals data This system would be part of your audit (proof of execution in good faith) The CMR content itself should be a matter of compiling and summarizing this data
- 5. CMR Content - How to meet the 5 Steps INFO@ASSENTCOMPLIANCE.COM | WWW.ASSENTCOMPLIANCE.COM | TEL: 1-866-964-6931 Step 1 - Establish Strong Company Management Systems Your Conflict Minerals Policy Your policies surrounding communication with suppliers This includes: Data Collection Data Validation SCARs Audit Trail Help Desk Supplier Success Center 3 email attempts and 3 phone attempts (Best practice) Step 2 - Identify and assess risks in the supply chain The methodologies you employ to ensure accuracy and identify potential DRC sources: Data Validation (fact checking the CMRTs) Supplier Due Diligence (red flag analysis on supplier responses A-J) Smelter Verification (cross-referencing Smelter data and reaching out to undocumented smelters)
- 6. CMR Content - How to meet the 5 Steps INFO@ASSENTCOMPLIANCE.COM | WWW.ASSENTCOMPLIANCE.COM | TEL: 1-866-964-6931 Step 3 – Design and Implement a strategy to respond to identified risks This is your process to respond to risk (hint – part of your communication strategy): QA team SCAR program Help Desk Supplier Success Center Grievance Mechanism All items must be documented in your system for transparency Step 4 - Carry out independent third-party audit of smelter/refiner’s due diligence practices For downstream users, it is recommended that you join an industry group such as the CFSI Step 5 – Reporting annually on supply chain due diligence This item is covered by the CMR itself
- 7. Timelines INFO@ASSENTCOMPLIANCE.COM | WWW.ASSENTCOMPLIANCE.COM | TEL: 1-866-964-6931 Timelines for Completion Since the data is collected and verified on a continual basis, compiling and summarizing can begin anytime This data can also be fed into a template closer to the actual reporting deadline (IE: You can put together the CMR and input the final percentages and facilities right before submission) In general, these reports take between 1 – 2 months (start to sign off) This timeline would not include an audit – be prepared to add more time!
- 8. Examples INFO@ASSENTCOMPLIANCE.COM | WWW.ASSENTCOMPLIANCE.COM | TEL: 1-866-964-6931 Template Review Examples: Esterline - http://www.esterline.com/Portals/0/Documents/GovernanceGuidelines/Esterline%2 02013%20Conflict%20Minerals%20Report%20Final.pdf Thermo Fisher – http://www.thermofisher.com/content/dam/tf/responsibility/Documents/Conflict%2 0Minerals%20SEC%20Filing.pdf
- 9. Questions INFO@ASSENTCOMPLIANCE.COM | WWW.ASSENTCOMPLIANCE.COM | TEL: 1-866-964-6931 ?