RSN Updates

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New Companies, More Detailed Filings in Second Annual Conflict Mineral Disclosures

The deadline for the second annual conflict minerals disclosures to the Securities and Exchange Commission (SEC) was this Monday, June 1. Companies that file the annual disclosures are bringing much-needed transparency to a minerals trade that has been linked to human rights abuses in the war-torn region centered in the Democratic Republic of Congo (DRC).

Responsible Sourcing Network congratulates the internal teams and firms that worked hard on this round of reporting. Now it is time to review the disclosures, and RSN has developed tools to do so, guided by the principle that social impact is a vital part of the value – and risk – investors and consumers expect companies to measure.

As of the June 1 deadline, 1,246 disclosures were in:

  • Of the 1,315 companies that filed last year 89.9% filed again. 64 companies filed for the first time.
  • 136 companies that filed in 2014 are still missing, although some may simply be running late. Last year, 143 companies filed after the reporting deadline.
  • So far the percentage of companies that filed the detailed Conflict Minerals Report, or “CMR” has risen, and 42 companies that filed only a Specialized Disclosure Form, or “Form SD” in 2014 expanded their disclosure to include the full CMR.

Special thanks to Yong H. Kim, Ross Business School at the University of Michigan, for this data.

Tracking Leadership in Four Areas

In 2014, companies were still learning what a good report looks like. Most of the filers covered in Mining the Disclosures, our recent pilot study of the 2014 SEC submissions, barely earned 50% of the available points, but leading companies set a pace for others to follow.

Mining the Disclosures introduced four Measurement Areas for evaluating conflict minerals reporting in regards to “social performance.” In Part one of this blog post, two of these Measurement Areas were introduced, highlighting best practices from Apple’s 2015 CMR. The tech giant earned praise from many quarters for filing its conflict mineral disclosure documents several months before the deadline. (Click here for Apple’s full CMR.)

Apple was among the top three performing companies in Mining the Disclosures. Intel and Qualcomm rounded out the top three. All three companies show continued leadership in the remaining two Measurement Areas, Assessing Exposure and Responding to Risk and Policies and Management Systems, in their 2015 conflict minerals reporting.

Assessing Exposure and Responding to Risk

Qualcomm gave a detailed description of which products require the use of conflict minerals, and divided these products into two groups based on relative impact on revenue. The company describes its supply chain in detail, and in plain language. It offered a very detailed description of its Reasonable Country of Origin Inquiry (RCOI) process, and also described its efforts to determine the origin of its conflict minerals with the greatest specificity possible. (Click here for Qualcomm’s full CMR.)

Policies and Management Systems

Intel has once again excelled in putting policies and management systems into place. In its Form SD, Intel has included the full text of its Conflict Minerals Sourcing Policy. Within the CMR, Intel describes its implementation of each OECD step, including internal management systems that reach all the way up to the Chief Executive Officer. (Click here for Intel’s full CMR.)

The other two Measurement Areas, Transparency and Reporting and Promoting a Conflict-Free Minerals Trade, are discussed in part one of this blog post.

Progress for Business and People

  • Business: Behind each one of the 1,246 Form SDs that have been filed so far is a team of people, a brand, and a business model, each attempting to meet the challenge of conflict minerals reporting. The U.S. requirement for conflict minerals due diligence is one of the biggest steps a government has ever taken to mandate “social reporting” and it won’t be the last. Investors will increasingly expect companies to respond to social risk and opportunity.
  • People: Most importantly, these conflict minerals disclosures bring us closer to a conflict-free minerals trade in the Congo. The demand from investors and consumers to source conflict-free flows up the supply chain, through factories and smelters, all the way back to mines in the DRC region. With persistence and innovation, this leverage will reduce the funding for armed groups and increase the number of local, conflict-free sources contributing to peace and prosperity in central Africa.

EU Parliament Votes to Expand Scope of Conflict Minerals Legislation to Reach 880,000 Companies

On May 20, Members of the European Parliament (MEPs) voted to end the importation of conflict minerals into the European Union. In a vote of 400 votes to 285 with 7 abstentions, Parliament strengthened both the Commission’s original proposal and the proposal forwarded by the International Trade Committee. Parliament has instead opted for a scheme requiring mandatory compliance for “all Union importers” sourcing 3TG in conflict areas in addition to obligatory disclosure requirements detailing supply chain risk mitigation efforts for “downstream companies.” This scheme falls in line with a recent statement issued by global sustainable and responsible investors urging MEPs to expand the scope of the original proposal to include mandatory requirements for “downstream” (end-user) companies.

With this vote, MEPs have taken the opportunity to substantively and significantly advance the EU’s role in the growing campaign to promote responsible sourcing around the world. In the vote, MEPs opted for a strengthened scheme in which smelters, refiners and importers of 3TG must undertake supply chain due diligence and obtain an independent third-party audit validating these processes. Likewise, “downstream” companies associated with 3TG mineral sourcing will also be required to disclose information regarding the steps they have taken to identify and mitigate risk in their supply chains.

In a press release issued by the Group of the Progress Alliance of Socialists & Democrats, major proponents of a mandatory scheme, S&D President Gianni Pitella praised the vote.

“A special day to be proud of being European. We all won. Europe won. All those who fight for the respect of human rights beyond and over multinational interests have won. People of DR Congo and of all areas affected by war and violence today won. After a long and hard campaign, the S&D Group convinced the rest of EU Parliament to secure a legally binding scheme to ensure the traceability of minerals, to make sure that products sold in the EU do not fuel armed militias or foster human rights violations in conflict areas. We proved that the European Union cares about human rights and human dignity beyond empty declarations.”

In contrast to Dodd-Frank, the proposed law is global in its geographic scope rather than focused only on tin, tantalum, tungsten, and gold sourced in the Democratic Republic of the Congo (DRC) and surrounding countries. If passed, the legislation could affect over 880,000 EU firms.

The European Parliament now enters into discussion with Member States and the Commission to come to a final agreement on the law. With obvious divisions demonstrated between parties, the negotiations going forward may prove very difficult.

It is our hope that the outcome of this vote will hold through negotiations with the Commission and Council so that mandatory supply chain due diligence requirements applicable to companies throughout the entire supply chain will pass into law. In compliment with US legislation, robust EU legislation will effectively generate global company due diligence activities in line with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. This will tangibly limit investor risk and increase legitimate extractive sector revenue streams in conflict-affected and high-risk areas, helping to bring an end to resource-related conflicts in the DRC and around the world.


Global Investors Urge European Parliament to Adopt Stronger EU Conflict Minerals Legislation

On May 13, 23 global, sustainable and responsible investors and investment organizations have come together to urge Members of the European Parliament to seize the opportunity of their upcoming vote to adopt robust conflict minerals regulations for the European Union.

Read the full statement

The European Parliament will vote on proposed regulation regarding the responsible sourcing of conflict minerals and associated requirements for European companies on May 20. However, in its current form, the proposed regulation would limit mandatory due diligence and disclosure requirements to EU smelters and refiners only, while opting for voluntary self-declaration for importers of 3TG established in the EU, as well as a vague voluntary European certification of responsibility for “downstream companies” (who are not defined).

Signatories to the statement, including Hermes, Boston Common Asset Management, Calvert, EUROSIF, and other prominent EU and U.S. investment groups, have asked Members of the European Parliament to strengthen this proposal by expanding the scope of the legislation to ensure that all companies placing minerals on the market, in raw form or contained in semi-finished or finished goods, are legally required to source responsibly. 

The undersigned sustainable and responsible investors and investment organizations feel that a mandatory and inclusive approach will stimulate a level of robust supply chain due diligence and reporting that a narrow, voluntary opt-in scheme cannot achieve. A mandatory scheme applicable to companies throughout the entire supply chain can effectively generate adequate company reaction that will tangibly limit investor risk and increase legitimate extractive sector revenue streams in conflict-affected and high-risk areas, helping bring an end to resource-related conflicts around the world.


Prepping for 2015 Conflict Minerals Reporting

Indicators Shortlist

By June 2, 2015, the second round of conflict minerals disclosures will be filed with the Securities and Exchange Commission (SEC). These filings fulfill a Dodd-Frank Act requirement for one of the first social disclosures related to human rights ever mandated. Despite industry arguments that the supply chain due diligence requirements are impossible and unachievable, many of the 1,315 disclosures filed last year prove the opposite to be true.

These disclosures represent a rich data set that provides a baseline from which to compare future disclosures. To standardize the evaluation of filings related to a company’s social performance on conflict minerals, Responsible Sourcing Network (RSN) has developed the Indicators Shortlist: Measuring Performance in Conflict Minerals Reporting. The Indicators Shortlist compliments RSN’s 2014 Expectations Shortlist for Company Conflict Minerals Reporting and Activities. This indicator set allows investors to track and compare companies’ conflict minerals activities with a clear and easily replicable methodology.

Read the Indicators Shortlist: Measuring Performance in Conflict Minerals Reporting

The information summarized in our Indicators Shortlist will be followed by a comprehensive analysis of conflict minerals reporting, coming later this month. This report, Mining the Disclosures, evaluates the conflict mineral filings of 51 of the largest companies from 17 “high exposure” industries. With data gathered by research partner, Sustainalytics, RSN conveys trends per industry group, industry and company rankings, best practices, and associated action items for investors.

RSN published these performance indicators to provide companies with detailed information on how their performance and reporting is and will continue to be evaluated. Using this data, RSN hopes companies will better understand how stakeholders explicitly define “high-performance” so they can adapt their conflict minerals risk management activities accordingly. According to Patricia Jurewicz, RSN Executive Director:

“Successful social performance goes beyond minimum compliance with Section 1502 legislation. It is crucial that companies understand that investors are not just asking for conflict minerals transparency. Investors want companies to disclosure actions they are taking to minimize risk, respect human rights in their supply chains, and generate social value.”

With this indicator shortlist and the upcoming report, RSN continues to provide tools to companies, investors, and consumers to operationalize the intention of Dodd-Frank Section 1502. We aim to help bring an end to the conflict in Eastern DRC by supporting a demand for conflict-free minerals and encouraging an integrated supply chain due diligence.


New Report on Forced Labor in Uzbekistan Cotton Harvest Released by the Uzbek-German Forum for Human Rights

New Report on Forced Labor in Uzbekistan Cotton Harvest Released by the Uzbek-German Forum for Human Rights

The Government’s Riches, the People’s Burden: Human Rights Violations in Uzbekistan’s 2014 Cotton Harvest, a new report from the Uzbek-German Forum For Human Rights finds that although the Uzbekistan government did not systematically mobilize children throughout the country to pick cotton, as it had in previous years, it still forced more than a million of its own citizens to pick cotton, and officials extorted individuals and businesses, including multinational companies, at a larger scale as part of the annual Uzbek cotton harvest.

New Report on Forced Labor in Uzbekistan Cotton Harvest Released by the Uzbek-German Forum for Human Rights

Read the press release at

Read the full report

The study of the 2014 cotton harvest also found an unprecedented degree of extortion of individuals and businesses that fueled the forced labor system, including keeping people in fields even though there is no more cotton to pick so people are still forced to pay fees for food and board, etc., and setting unattainable quotas so people had to pay to make up deficits.

“The scope of the bribery is simply astounding,” said Umida Niyazova, UGF director. “At all levels of government, officials take their cut, and Uzbek citizens, particularly public sector workers are forced to pay or pick cotton through intimidation and fear.”

Read The Government’s Riches, the People’s Burden: Human Rights Violations in Uzbekistan’s 2014 Cotton Harvest at

Watch video footage of Uzbekistan’s 2014 Cotton Harvest