Building the Transparent Supply Chain
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The principles surrounding conflict minerals sourcing are expanding into other materials, such as cobalt, copper and lithium. The broader initiative, called responsible minerals sourcing, focuses on the social and environmental impact of extracting and processing certain raw materials and preventing abuses often linked to those activities.
Under U.S. legislation enacted in 2010, publicly-traded companies are required to disclose the use of conflict minerals -- tin, tungsten, tantalum and gold (3TG) — in manufactured products. The measure intends to discourage businesses from sourcing 3TG in war-torn regions in Africa. The European Union has agreed on similar legislation, but pressure is mounting for both regions to expand the scope of their efforts.
The Responsible Minerals Initiative has spearheaded a lot of the activity associated with conscientious sourcing. RMI is a centralized and comprehensive resource for guidance, standards, materials and tools related to responsible supply chains. RMI has also developed an extensive database of global smelters and country-of-origin information.
SiliconExpert, which recently joined the RMI, outlined the benefits of such industry alliances in the free webinar: SiliconExpert Market Insights: Conflict Minerals and Responsible Mineral Sourcing: Why it matters and what to do? Compliance with both legislated and voluntary best practices is data-intensive, and many organizations don't have the resources for audits, due diligence or assessing the risks associated with some materials.
For example, RMI identifies 37 materials used in electronics and automotive applications. Activities associated with sourcing these materials could include child labor; human right violations; support of armed rebels and their agents; bribery, money-laundering and tax evasion.
As a starting point, RMI said, companies should:
•Understand if there are materials of concern in the parts that they buy
•Understand the potential risks associated with the materials
•Communicate to suppliers the expectation to source responsibly
•Leverage collective and collaborative industry approaches to gain efficiencies in process and up-to-date information about supply chain risks and mitigation strategies
Both SiliconExpert and RMI collect and consolidate data that can help businesses in their decision-making. SiliconExpert "greatly sees the value of our RMI Vendor membership, which enables us to better assist our customers in meeting government requirements, achieve their social responsibility goals, and ensure a competitive advantage," it said.
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