WHAT IS AT STAKE WITH EU CONFLICT MINERALS?

The European Union (EU) published on May 19th, 2017, the Conflict Minerals ban regulation # 2017/821. Conflict Mineral Reporting Templates (CMRT) help audit supply chains.

Like the US Dodd-Frank act and according to article 1(1), the idea is to ‘’curtail opportunities for armed groups and security forces to trade tin, tantalum, and tungsten, their ores, and gold.’’ These four minerals are commonly called 3TGs.

Due diligence obligations apply to upstream companies (such as mining companies, raw material traders, smelters, and refiners) and downstream companies that import metal-stage products.

This Conflict Minerals regulation came into effect on January 1st, 2021.

THE CONFLICT-AFFECTED AND HIGH-RISK AREAS - CAHRA and CMRT

The CAHRAs List

Unlike the USA law, which concerns the Democratic Republic of the Congo and surrounding countries, the scope of countries at risk of handling conflict minerals is broader under the EU regulation. It is also subject to regular changes.

The European Commission Directorate-General for Trade (DG TRADE) has contracted the non-for-profit organization RAND Europe to list the conflict-affected and high-risk areas, as defined in article 14(2) of regulation # 2017/821. It is the CAHRAs list. CAHRAs stands for Conflict-Affected and High-Risk Areas.

The CAHRAs list is an indicative and non-exhaustive one. However, it gives a good indication of the main covered areas among the following countries:

Afghanistan
Burkina Faso
Burundi
Cameroon
The Central African Republic
Chad
Colombia
The Democratic Republic of the Congo
Egypt

Eritrea
India
Libya
Mali
Mexico
Mozambique
Myanmar
Niger
Nigeria

Pakistan
Philippines
Somalia
South Sudan
Sudan
Ukraine
Venezuela
Yemen
Zimbabwe

The CAHRAs Procedure Guidance

On top of maintaining the Conflict minerals reporting template (CMRT), the Responsible Minerals Initiative has been developing the CAHRAs Procedure Guidance to help companies and organizations perform a due diligence exercise when verifying conflict minerals in their supply chains.

CMRT: IS YOUR SUPPLY CHAIN CONFLICT-FREE?

This question may be arduous to answer at a 100% confidence level. It is especially true when it comes to manufacturers of complex products that contain 3TGs. For example, the supply chain of producers of electronic devices is usually a very long one. Manufacturers typically do not deal directly with smelters.

As a result, it becomes increasingly necessary for these businesses to:

have robust policies and procedures,
use the most efficient due diligence tools, and
regularly perform audits.

Questions about Conflict Minerals, Due diligence, CMRT, or product compliance? Visit our Conflict Minerals resources or contact us. Need assistance with your Conflict Minerals Management System? Get your Conflict Minerals free online consultation!