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8/13/2019 Fighting Conflict Minerals Mining With the Supply Chain

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1/18/2014 Fighting conflict minerals mining with the supply chain by Mark Morley, Director of Industry Marketing for Manufacturing at GXS

http://mhwmagazine.co.uk/LatestNews/Fighting_conflict_minerals_mining_with_the_supply_chain_by_Mark_Morley,_Director_of_Industry_Marketi-15016.html 2/2

due to its superior electric conductivity and corrosion resistance.

Over the past couple of years a number of organisations have been formed to help define processes on theclamping down of conflict minerals sourcing. The International 'Organisation for Economic Co-Operation andDevelopment' (OECD) has designed a 5 step framework for identifying and removing conflict minerals from thesupply chain. Additionally two bodies have been established to help high tech companies implement the OECDframework, the Electronic Industry Citizenship Coalition (EICC) and the Global eSustainability Initiative (GeSi).To try and remove conflict minerals from global supply chains, the U.S congress passed the Dodd-Frank WallStreet Reform and Consumer Protection Act. Section 1502 of the act is a provision related to the sourcing ofconflict minerals. This means that all companies submitting filings to the SEC must now complete forms to confirmthat they are not using conflict minerals across their supply chain. The first submission is due for 31st May 2014and then annually by 31st May each year. Any company, there are estimated to be around 6000 of them, that fileForms 10-K, 20-F or 40-F with the SEC each year will be affected by this new law. In particular those that operatein the aerospace, automotive, high tech, defence and medical devices sectors will be impacted. According to

Deloitte, "the complexity of today's supply chains combined with lack of visibility into sourcing practices will be oneof the key challenges of ensuring that Dodd-Frank can be adhered to."

One tool that has been developed by EICC to help companies adhere to the Dodd-Frank law is the conflictminerals reporting template, which complies with the SEC's due diligence requirements. This Microsoft Excelbased reporting template embraces the OECD's 5 step framework and asks specific questions to ensure thatconflict minerals are not used across a supply chain. Given that conflict minerals reporting is now law for North

American based SEC filings, it is in a company's interests to find an efficient way to conduct the reporting processwith minimal effort and without disrupting the day to day operation of the companies being asked to complete thesurvey.

There are two key challenges to ensure successful reporting of conflict minerals. Firstly the company must ensurethat it has up-to-date contact information for every company across the supply chain. Secondly all companiesmust complete the survey questions in a timely manner so as not to delay an SEC filing. Efficient contactmanagement is therefore critical to the success of this reporting process, and to help ensure that a company

remains within the law on conflict mineral reporting.

Establishing a community management strategy is never easy, especially given the global nature and diversity oftoday's suppliers. One of the simplest ways to engage with a global community of trading partners is through acommon platform that is accessible through nothing more than a web browser. One such platform is GXS ActiveCommunity, a cloud based community management tool that has been designed to support people to peopleinteractions across a supply chain. The platform uses a combination of centralised contact management andmass communication tools to allow a company to reach out to their trading partners anywhere across a supplychain. When using this platform, the EICC reporting tool could either be distributed as an email attachment or itcould be replicated within the platform's built in survey module. Therefore any company that has to comply withthe new conflict minerals reporting process will be able to ensure that all its supply chain contacts are up to datebut more importantly that it also has full traceability over which suppliers have actually completed theirsubmission. Any trading partner that fails to complete the report for any reason will automatically be sent areminder email, significantly improving response rates and helping to ensure that a SEC filing is completed ontime.Supply chain directors need to recognise the role that they can play in the fight against mining of conflict mineralsby ridding them from their supply chains. Using an effective community management tool they'll not only gaingreater visibility of their supply chains and ensure they adhere to government legislation like the Dodd-Frank law,but they'll also be helping to rally the fight against the mining of conflict minerals in suffering regions.

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