As the deadline for reporting the use of so-called conflict minerals to the U.S. federal government looms, a new study shows that a large portion of electronic component manufacturers are unprepared to meet the requirement.
Industry researcher IHS, Inc. surveyed manufacturers as part of a webinar on the subject in December and found that 22% said they were not sure what to do to meet the regulations on conflict minerals. Another 20% said they had just begun to create a plan for meeting the regulations. IHS surveyed 162 companies from five regions around the world, with most based in the United States.
Conflict minerals are raw materials sourced from the Democratic Republic of Congo, where their trade fuels violence and human rights violations. The minerals in question—tantalum, tungsten, gold, and tin—are commonly used in electronic components needed for everything from cell phones to medical equipment. Federal regulations require publicly traded companies to report their use of conflict minerals in producing their products beginning this May. The requirements are part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which took effect in August 2012 with initial reporting required by May 31, 2014.
Although the reporting requirements apply only to publicly traded companies, the effects are being felt throughout the supply chain because those companies must gather information on the presence and origin of conflict minerals in the products and materials they source from their suppliers. This includes distributors and raw materials suppliers.
IHS also found that 50% of the companies surveyed said they could use help in collecting conflict minerals information from their suppliers. Companies throughout the supply chain have noted that data collection surrounding conflict minerals is time-consuming and costly.
Industry trade groups have launched resources to keep companies throughout the supply chain stay up-to-date on the conflict minerals issue. The Electronic Components Industry Association and IPC—The Association Connecting Electronics Industries are two groups with dedicated online resources.