The SEC's conflict mineral rule requires US-listed companies to disclose whether their products contain certain metals (tin, tantalum, tungsten, or gold) and whether these metals originate from rebel-held mines which are funding armed conflict in the Democratic Republic of the Congo (DRC) region. All companies in scope must file on the 31 May each year whether they were “DRC conflict free” in the previous calendar year. Large companies can declare that they are “DRC conflict undeterminable” up to 31 May 2016 and small companies can declare “DRC conflict undeterminable” up to 31 May 2018.
The BOMcheck Industry Steering Group has designed and developed the world’s most advanced conflict minerals web database system to prepare for the 31 May 2016 deadline when large SEC reporting companies can no longer file “DRC conflict undeterminable”. Extensive feedback on data management challenges with other web platforms has helped industry develop the first web database which:
- Provides one integrated tool for suppliers to upload their CFSI Conflict Minerals Reporting Templates at the part level or company level at the same time as they publish materials declarations for RoHS, REACH and other regulated substances. No need to re-type data into another web tool.
- Validates the data in the supplier's CFSI Conflict Minerals Reporting Template and provides immediate detailed feedback to help the supplier correct any data validation errors which are preventing upload. This saves time and cost for suppliers and manufacturers.
- Works in partnership with the Conflict-Free Sourcing Initiative to validate any new smelters which suppliers identify so that they can be added to CFSI list of known smelters and invited to join the Conflict-Free Smelter Program. Keeps up-to-date as the CFSI identifies new smelters.
- Provides smelter list roll-up and analysis tools, reporting tools and a permanent archive of suppliers’ CMRTs. Keeps up-to-date as the CFSI reports new validated Conflict-Free smelters.
BOMcheck is an industry collaboration led by Philips, Siemens, GE, Osram, Sony Mobile, Schneider Electric, Toshiba, Agfa, Texas Instruments and TE Connectivity to share one web database to manage supply chain compliance. BOMcheck is highlighted in corporate videos produced by Siemens and Philips and iis used thousands of companies to gather materials declarations for millions of parts. The system is supported by SGS which uses BOMcheck to provide EN 50581 RoHS compliance assessment services.
One integrated tool for Conflict Minerals and RoHS, REACH and other regulated substances
As Intel highlighted at an IPC conflict minerals conference summer 2013, many companies piloted their conflict minerals supply chain programs in 2013 by using basic, stand-alone systems so that they could identify the data management challenges and define their requirements for a comprehensive software solution. In May 2014 the Conflict-Free Sourcing Initiative published a new version 3.01 Conflict Minerals Reporting Template which provides even greater accuracy for identifying and rolling up the list of smelters in a company’s supply chain for the 2014 calendar year. These industry requirements have been addressed in BOMcheck to produce a mature, integrated system which enables suppliers to use one tool to upload their CFSI Conflict Minerals Reporting Templates at the part level or company level at the same time as they publish materials declarations for RoHS, REACH and other regulated substances. Manufacturing customers can use the BOMcheck tools to roll-up conflict minerals data and smelter lists for a BOM parts list or at the supplier company level, and download these data as a new Conflict Minerals Reporting Template.
Data validation and immediate detailed feedback to suppliers
An important lesson learned from company pilot programs was that it took an average of 3 or 4 interactions with suppliers to achieve complete and coherent Conflict Minerals Reporting Templates. Manufacturers spent considerable time and effort to review each Conflict Minerals Reporting Template and manually communicate the data validation errors back to suppliers. The BOMcheck Industry Steering Group shared the results from their pilot programs to develop a comprehensive set of validation checks and error messages. The new BOMcheck tools carry out these validation checks automatically and provide immediate detailed feedback to the supplier on how to correct any errors before the reporting template is uploaded and shared with their manufacturer customers. This saves time and cost for suppliers and manufacturers.
Working in partnership with Conflict-Free Sourcing Initiative to validate 'new smelters' identified by suppliers
The biggest data management challenge for a company that wants to work towards “DRC conflict free” status by May 2016 is to roll-up an accurate, complete list of the smelters which are used by suppliers in their supply chain. Early pilot programs found that some of the smelters used by suppliers were not included in the smelter list published in older versions of the Conflict Minerals Reporting Template, and so the supplier had to manually add these entries into their smelter list. In many cases, the supplier included incorrect entries for organizations which are not smelters (for example, London Bullion Market Association) in their smelter list. In both cases, the manufacturer expended significant resources to check whether these entries were for valid smelters and if not, to establish what smelters the supplier should have listed. If the entries were included by first tier suppliers then the manufacturer could leverage their contractual relationships to ask these suppliers to investigate. However, if the entries were rolled-up from second tier suppliers’ smelters lists then it was virtually impossible for the manufacturer to get them investigated and corrected. These entries represent data gaps in the manufacturer’s due diligence program which prevent them from working towards “DRC conflict free” status by May 2016.
To avoid these data management issues, industry has worked hard to ensure that version 3.01 of the CFSI Conflict Minerals Reporting Template now includes > 99% of the world’s Conflict Minerals smelters, each identified with a unique Smelter ID. Today, almost all suppliers should be able to identify all of their smelters by carefully checking the CFSI list of known smelters. BOMcheck works in partnership with the Conflict-Free Sourcing Initiative to support this industry approach. If the supplier believes they have identified a potential new smelter then BOMcheck contacts the company and works with the Conflict-Free Sourcing Initiative to collect and check the necessary information to add the new smelter to the CFSI list of known smelters in the Conflict Minerals Reporting Template. The Conflict-Free Sourcing Initiative will then invite the new smelter to participate in the Conflict-Free Smelter Program.