Assent Compliance hosts regular webinars on environmental compliance. To view the full webcast visit www.assentcompliance.com. This webinar deals with Conflict Mineral Compliance.

1. AS SENTCOM PLIANCE
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RAPE FREE:
ConfliCt Minerals
regulations in Canada
and the u.s.
assent compliance
Krystal Noseworthy-BaKer
phone: 613.882.1429
krystal.baker@assentcompliance.com
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2. AS SENTCOM PLIANCE
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INTROduCTION TO ASSENT COMPLIANCE

assent compliance
• Consulting
• Global Requirements
• Compliance Strategies
• Regulatory Interpretations and Impacts
• IT
• Cloud Computing
• Application Design
• Operations
• Program Implementation
• Data Management
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 AgENdA
• US Conflict Minerals Regulation
• Overview
• Intent
• Scope
• Requirements
• Further Specifics
• Steps to Compliance
• Timelines
• Assent Software Conflict Minerals Module Demo
• Q&A
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 SECTION 1502 – dOdd-FRANk WALL STREET
REFORM ANd CONSuMER PROTECTION ACT
the united states conflict minerals act
A “Sexy” Law
• Conflict Minerals Definition:
• Mined in conditions of armed conflict and atrocious abuses of human rights
• As per 17 CFR Parts 229 and 249 “The Conflict Minerals” Rule:
“It is the sense of the Congress that the exploitation and trade of conflict
minerals originating in the Democratic Republic of the Congo is helping
to finance conflict characterized by extreme levels of violence in the eastern
Democratic Republic of the Congo, particularly sexual- and gender-based
violence, and contributing to an emergency humanitarian situation therein”
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• Democratic Republic of Congo
• Congolese National Army
• Armed Rebel Groups
• Democratic Forces for the liberation of Rwanda
• This situation attracts attention
• Child Soldiers
• Women being raped on a mass scale
» Intimidates and controls local populations
» Secures MINES, trading routes, and other strategic areas
• More attention = Political Center Stage
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 SECTION 1502 – dOdd-FRANk WALL STREET
REFORM ANd CONSuMER PROTECTION ACT
the united states conflict minerals act - overview
July 21st, 2010
• Legislation Enacted
• SEC
• Disclosures on use of specific conflict minerals
• 3TGs
» Tantalum (Coltan Ore)
» Tin (Cassiterite Ore)
» Tungsten (Wolframite)
» Gold
» Others determined by the Secretary of State to be financing
conflict in DRC
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• Democratic Republic of Congo and adjoining countries
» DRC
» Central Africa Republic
» Sudan
» Zambia
» Angola
» Congo Republic
» Tanzania
» Burundi
» Rwanda
» Uganda
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 SECTION 1502 – dOdd-FRANk WALL STREET
REFORM ANd CONSuMER PROTECTION ACT
intent
• To try to curb the “extreme” violence and exploitation in the DRC and
neighboring countries
• Expose companies that use minerals derived from this region
• Disclosure
• Public Pressure
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 SECTION 1502 – dOdd-FRANk WALL STREET
REFORM ANd CONSuMER PROTECTION ACT
scope
• Companies that register with the SEC
• 10K (US)
• 20F (Foreign)
• 40F (Canadian)
• Conflict Minerals “necessary to the functionality or production” of its
products manufactured (or contracted to be manufactured)
• Suppliers to impacted SEC filing companies
• Even if they are not an SEC filing company themselves
Industries most heavily impacted:
• Electronics and Communications • Jewelry
• Aerospace • Health care devices
• Automotive • Diversified Industrial Manufacturing
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 SECTION 1502 – dOdd-FRANk WALL STREET
REFORM ANd CONSuMER PROTECTION ACT
requirements
As part of annual reporting to SEC:
• Reasonable country of origin inquiry
» Origin of conflict minerals in products
• If did not originate in DRC Countries
» Disclose the determination
» Disclose the process
» Determination on the Internet website
» Disclose that the information is available on its website
» Disclose the internet address of the site
» Maintain records of the investigation and determination
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• If originated in DRC Countries OR cannot conclude that conflict
minerals DID NOT originate in the DRC countries
» All the above tasks plus
• Create Conflict Minerals Report
» Exhibit to annual report
» Available on the Internet website
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12. AS SENTCOM PLIANCE
info@assentsvhc.com w w w. a s s e n t s v h c . c o m tel: 866.964.6931
 SECTION 1502 – dOdd-FRANk WALL STREET
REFORM ANd CONSuMER PROTECTION ACT
conflict minerals report
• A description of the measures it had taken to exercise due diligence on the
source and chain of custody of its conflict minerals,
• Has to include a certified independent private sector audit of the
Conflict Minerals Report that identifies the auditor and is furnished as
part of the Conflict Minerals Report.
• A description of the products manufactured or contracted to be manufac-
tured containing conflict minerals that are not “DRC conflict free,”
• The facilities used to process those conflict minerals,
• Those conflict minerals’ country of origin,
• The efforts to determine the mine or location of origin with the greatest
possible specificity.
• Required to exercise due diligence in making these determinations in
the Conflict Minerals Report.
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 SECTION 1502 – dOdd-FRANk WALL STREET
REFORM ANd CONSuMER PROTECTION ACT
requirements – further specifics
• Contract Manufacturing – Provision Applies
• Metal is not found in the final product – Provision applies as long as it is
“necessary” in the manufacturing process
• Organisation for Economic Cooperation and Development (the “OECD”)
has developed due diligence guidance for conflict mineral supply chains.
• The GAO Government Auditing Standards and other similar domestic and
international standards should be used as reference/to set the bar for the
independent audit
• Reporting requirements are not fully specified, they are expected to evolve
over time
• Inclusion of more minerals
• Levels of due diligence
• Naturally occurring trace amounts exempt
• Unintentionally included trace amounts exempt
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 SECTION 1502 – dOdd-FRANk WALL STREET
REFORM ANd CONSuMER PROTECTION ACT
3 steps to compliance
The Conflict Mineral Provision requires that companies who register with
the SEC use the following 3 steps to comply:
 Step 1 – Scope determination
• Which of your products are in scope of the Conflict Mineral provision:
• The definition states that companies must provide disclosure under the
Conflict Mineral Provision if “... conflict minerals are necessary to the
functionality or production of a product manufactured...”
• If your products do require conflict minerals, move to Step 2.
 Step 2 – Reasonable Country of Origin Inquiry
• Defined as what a “Reasonable person would consider a prudent country of
origin inquiry”.
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• If you can determine that your conflict minerals do NOT come from
DRC or adjoining countries then you disclose this determination to
the SEC along with the reasonable country of origin inquiry used to
make this determination in the annual report.
• This information must also be provided on the company’s website.
• If your products do use conflict minerals from the DRC/adjoining
countries or you DO NOT KNOW, you must move on to Step 3 and
provide a Conflict Mineral Report.
 Step 3 – Conflict Minerals Report
• Companies submitting a Conflict Minerals Report must
• Exercise due diligence in determining the source and chain of custody
of Conflict Minerals
• Certify that a 3rd party audit of the Report was obtained
• List products that are not DRC free
• List facilities used to process those conflict minerals
• Detail the Country of origin
• Show efforts to determine or locate mine of origin with greatest specificity
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 SECTION 1502 – dOdd-FRANk WALL STREET
REFORM ANd CONSuMER PROTECTION ACT
timelines
• Still waiting on final rule to be passed by SEC – it has been delayed a few
times but is expected to pass in the fourth quarter of this year.
• First reporting period:
• First full fiscal year (first filing) ending 12 months after the final ruling
• There can be 5-10 Layers between the mine and the end product
• Apple has 125 suppliers using Tin and they source from 43 smelters
around the world
» Reasonable inquiry throughout this supply chain can take months!
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• Because of the supply chain investigation complexity many companies have
already started the process
• Apple
• Intel
• Motorola
• Nokia
• Microsoft
• Acer
• RIM
• Philips
• Toshiba
• SanDisk
• LG
» This sort of “big business” pressure will only enhance the coverage
this gets and will speed the necessity of compliance throughout
supply chains
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 QuESTIONS?
Please submit your questions in writing using the Q&A tool along the top
menu tool bar.
Any questions not addressed during the Q&A portion of this webinar will be
addressed in private correspondence after the webinar.
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