The hurdles to ban conflict minerals from the electronic supply chain

It is always difficult to establish a compliance standard for any new regulatory initiative. For instance, it was hard for the EU to establish a baseline for exempt products in its ROHs (restriction-of-hazardous-substances) directive.

The same hurdles are being faced by the movement to ban conflict minerals from the electronics products particularly in areas involved in human rights violation. Regions like Congo that ignore human rights provide important raw material to the electronics supply chain. According to the industry participants, these regions use the income earned from the conflict minerals to finance civil wars in their areas.

A standard is being developed by the worldwide industry associations IPC, the EICC (Electronic Industry Citizenship Coalition), and the GeSI (Global e-Sustainability Initiative) to introduce a compliance law that will discourage the use of conflict measures in the electronics industry. It is obligatory for the publicly traded companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, to report the use of tin, tantalum, gold and tungsten imported from conflicted regions. The compliance standard is expected to allow companies to assist in the preparation of compliance reports by sharing data on conflict minerals.

The EICC and GeSI designed model will enable companies to share conflict mineral-related data with their business partners and track this information within their supply chains. IPC will facilitate the data-exchange standard for the worldwide electronics industry through this basic template. According to a press release, the EICC/GeSI template includes all the information and data about a company’s conflict free mineral policy, including the smelters used by the company and its suppliers.

Though there is a complete regulatory mandate carried out by the electronics supply chain, yet there has been no governmental move to certify that the source minerals are conflict free. In order to completely overcome operational and brand risk hurdles with compliance complexity, some firms have simply stepped out of the region. As a result, these poverty stricken regions in Congo have seen a significant fall in their incomes.

However, the rapid development and adoption of EICC/GeSI tool will significantly benefit the electronics industry worldwide. Once a standard data is gathered, the companies can use the same as a baseline to measure their own compliance efforts.  A standard helps avoid duplication of effort and the information will be available in a consistent format.

IPC’s meeting scheduled on Sept 22, 2011, in Schaumburg, IL, is a first step to begin a data-exchange standard during its Midwest Conference and Exhibition.

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