Executive Briefings

Compliance on 'Conflict Minerals' Provision Is Added Burden for Supply Chain Managers

As a compliance manager at TriQuint Semiconductor, John Sharp has spent much of the past year focused on one little-known compliance rule before it goes into effect. To satisfy it, he must query hundreds of suppliers to figure out the origin of some 450 materials used in his company's products. It's an unusual burden, he says, because "we've never had to go back through our supply chain to determine the source of something."

Until now. A provision in the Dodd-Frank financial reform law requires publicly traded companies to scour their supply chains for so-called conflict minerals mined in the Democratic Republic of Congo and surrounding countries. If a company finds that minerals used in its products or components come from the area, it will need to dig even deeper to determine whether its purchases indirectly help fund ongoing violence in the region. The final version of this rule will likely require that companies publish their findings every year and explain their due-diligence process.

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As a compliance manager at TriQuint Semiconductor, John Sharp has spent much of the past year focused on one little-known compliance rule before it goes into effect. To satisfy it, he must query hundreds of suppliers to figure out the origin of some 450 materials used in his company's products. It's an unusual burden, he says, because "we've never had to go back through our supply chain to determine the source of something."

Until now. A provision in the Dodd-Frank financial reform law requires publicly traded companies to scour their supply chains for so-called conflict minerals mined in the Democratic Republic of Congo and surrounding countries. If a company finds that minerals used in its products or components come from the area, it will need to dig even deeper to determine whether its purchases indirectly help fund ongoing violence in the region. The final version of this rule will likely require that companies publish their findings every year and explain their due-diligence process.

Read Full Article