Conflict Minerals: Supply Chain Transparency No Longer a “Nice-To-Have”

SOLANA BEACH, CA (October 7, 2011) – Source 44 LLC, the world’s leading provider of Sustainability data services and Product Footprint Data Sheets (PFDS)™, convey concerns from retailers and manufacturers alike are growing by the day in anticipation of the pending ruling by the Securities and Exchange Commission (SEC) on conflict minerals in the Democratic Republic of Congo (DRC).

While the SEC is expected to issue its final guidance governing the implementation of Section 1502 of the Dodd-Frank Consumer Protection Act by the end of 2011, one can look now to the OECD Due Diligence Guidance for Responsible Supply Chains for assistance in establishing programs and practices.  Once implemented, companies will have one fiscal year to disclose their efforts on these conflict minerals. No longer will knowledge of Tier One suppliers be enough; instead, due diligence will be required to determine the true origin of these materials.

It’s one more reason why companies are looking to the supply chain transparency tools and technology provided by Source 44. These tools are providing retailers with an automated means of tracing and monitoring supply chains for a myriad of concerns – including conflict minerals.

Much of the focus is on tin, tungsten, tantalum and gold (3TG), minerals that are necessary ingredients for many of the electronics, toys, jewelry, and other common products sold in stores today.  Accurately accessing the origins of materials is never an easy task, and in the case of conflict minerals it is further complicated by the mixing of ores from various locations and repeated recycling. Additionally, most operations are artisanal, small-scale operations with little governmental oversight. Despite this, companies will be required to report their efforts in public filings and on their respective websites.

Two Options

There are two options for understanding the origin of conflict minerals: tracking and tracing.

• Tracking involves tagging or otherwise identifying ores from the mine to product.
• Tracing is the reverse – following materials back up the supply chain, typically to the smelter that may or may not be able to certify the source of their ores.

Tracing can be a powerful tool, allowing companies to understand the origins of 3TG and bring transparency to their entire supply chain. Retailers will likely need to employ scalable supply chain transparency tools like Source 44’s visualization and benchmarking tools to trace the minerals in the products they sell, while engaging suppliers in the process. These tools should sync verifiable purchasing with shipping manifests to obtain an accurate tracing assessment.

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About Source 44

Source 44 delivers supply chain sustainability as a continuous flow of subscription services to meet your ever-changing product stewardship needs. We examine your supply chain through the lens of sustainability, and when we identify an opportunity or risk we alert you. Regardless of your products’ complexity, we deliver affordable technology, resources, creativity and expertise to rapidly improve your supply chain sustainability—no matter how your needs change. Source 44 derives its name from the molecular weight of carbon dioxide – 44 – the measuring stick of Greenhouse Gases, and is based in Solana Beach, CA, with offices in San Diego and Dallas.

About RILA

The Retail Industry Leaders Association is the trade association of the world’s largest and most successful retail companies, whose executives participate in RILA for its unique educational forums, its effective public policy advocacy, and its advancement of the retail industry.

For More Information

Source 44 LLC

Lauren Gambaccini, Marketing Communications Manager

Email: marketing@source-44.com

Phone: 877. 916. MFDS (6337) ext: 1007