To add clarity to the new conflict minerals requirements, I interviewed Dr. Chris Robertson, Head of Regulatory Compliance at ERA Technology, a UK-based consultancy and a consultant to Compliance & Risks, which provides on-line compliance advice.
Dr. Robertson focuses on a wide variety of environmental issues, including RoHS, WEEE, REACH, Conflict Minerals, Eco-design, Sustainability, material substance substitution, obsolescence and reliability issues. His group has contributed to initiatives that have subsequently been used in policy formation by the UK government and the European Commission.
(This article originally appeared in the March Avnet-EBN Velocity Digital edition, which you can read in its entirety here.)
EBN: What general advice are you giving supply chain professionals on this subject?
Dr. Chris Robertson: Define your policy, and start now. Honesty and openness in working with suppliers are [the qualities that are] likely to achieve a real reduction in risk. Objective evaluation of your supply chain is crucial. The supplier that says, “We do not know, but we are working on it” is probably a more trustworthy source than those suggesting they “know” that all their products are conflict free.
there's no time like the present to start on conflict minerals compliance.
EBN: What are the major obstacles to preparing for the May 2014 deadline?
Robertson: One is the lack of internal buy-in.
Denial is another problem, and we see this expressed with the attitude, “We cannot be having to do this, and therefore we do not have to.” Or, a company might take the stance: “Let's push it back upstream to our suppliers.” But it could be the case that those upstream suppliers have fewer resources than the company downstream does to deal with it.
And the compliance team in even a big organization can be squeezed on resources. They are already dealing with technical compliance issues such as safety and electromagnetic compatibility (EMC), and dealing with conflict minerals' reporting will stretch those resources thin.
Lack of leverage is another hurdle. If the company you are buying from is selling you a very small number of products out of a much larger business, then getting it to engage on the subject of conflict minerals might be very difficult.
EBN: What should distributors do with regard to the statements made about products?
Robertson: Ask for periodic declarations associated with the products that you buy, and require your suppliers to update you on any changes that would affect that declaration.
EBN: Is there a material declaration format emerging as the one that is most widely accepted?
Robertson: Yes, the Electronic Industry Citizenship Coalition's Global e-Sustainability Initiative (EICC-GeSi) Conflict Minerals Reporting Template. The members of EICC-GeSi include large US corporations that have been trying to do something about this well ahead of the deadline set by the SEC rule. They have done quite a bit of work to make sure that the EICC-GeSi reporting template is something that has validity.
That is not to say it's perfect. It's a complicated set of questions to which the answers are very difficult. It might be advisable to start with a something simpler, such as a subset of the EICC-GeSi questions, and ask your suppliers only a few questions at a time.
Whatever you send out, you are going to have difficult responses initially, but I think you have to start somewhere, and you have to start soon. The sooner you start, the sooner you get responses back, and you can start working with those suppliers to get them on the right path to giving you a more meaningful answer.
EBN: What can supply chains learn by looking at the parallels with RoHS and REACH?
Robertson: The National Measurement Office (NMO) in the UK enforces RoHS. According to NMO, the two most frequent offenses are not responding in time and the fact that the manufacturer or importer has not assessed its documentation. In some cases, the documentation says, when looked at closely, that this component, which they take to be RoHS-compliant, is not. The companies have not taken the time to look at the documentation properly and assess it.
That is the situation we could see arise with conflict minerals in a company if the organization treats it as a paper-collection exercise without any real diligence attached to assessing the information.
EBN: Are we talking about a change in kind or a change in degree with regard to what resources supply chain executives will need to comply with Dodd-Frank/SEC 1502?
Robertson: It's a difference in degree, in that your procurement people are interacting with the same suppliers they have been interacting with for other compliance, delivery, and related issues.
It is a difference in kind in that suppliers are not used to answering questions on conflict minerals and don't have the information at their fingertips. Possibly they will need to set up systems that need to cascade back up their supply chain, which is why it is important to start as early as possible, because getting everybody moving in that direction is going to take a while.
EBN: What organizations should electronics supply chain executives follow closely on this issue?
Robertson: EICC-GeSi is the standard bearer for good practice in this area. In terms of best-practices, the Office of Economic Cooperation and Development (OECD) has produced the only guidance mentioned in the SEC rule — it is the only “kid on the block” as far as good practice is concerned.
It is worth looking at more than one source. Don't limit yourself to looking just at industry publications or only at campaign group publications. You need to strike a balance.
EBN: The conflict minerals issue can seem so complex, it's difficult to know where to begin.
Robertson: Start somewhere. Start simple. The first thing to do is to get a basic understanding of what the requirement is — either by yourself or with the assistance of someone who does know — and gradually build up from that. Understand that we are talking about these specific minerals, used in these specific products, and this is what the law requires.