CMRT 4.01 Archives | �ۿ۴�ý

CMRT 4.01a Released, with modified Smelter Reference List to remove errors!

�ۿ۴�ý — Wed, 03 Jun 2015 11:15:26 +0000

Further to our earlier piece on CMRT v4.0 (Refer the 2^nd half of this article), we now share with you the changes made on CMRT v4.01a. With ongoing feedback and several inputs from the suppliers and manufacturers, CFSI has now come up with CMRT v4.01a as on August 6, 2015, which supersedes all the older versions. The CMRT v4.01a underwent the following changes in the “Smelter Reference List” tab. These changes were made for accurate smelter identification.

The gold smelter ‘Elemetal Refining LLC’s’ smelter Id has been rectified from CID001323 to CID001322.
Blank spaces have been removed from 4 standard smelter names.
The tin smelter ‘PT Supra Sukses Trinusa’ has been removed as it does not meet the CFSI definition of a smelter or refiner.
The gold smelters, ‘CCR Refinery – Glencore Canada Corporation’ and ‘OJSC ‘The Gulidov Krasnoyarsk Non-Ferrous Metals Plant (OJSC Krastvetmet)’ have been modified for typographical error.

The CFSI (Conflict-Free Sourcing Initiative) released the previous��revision of the Conflict minerals reporting template (CMRT) on June 12, 2015. The CMRT v4.01 superseded the v4.0 which was released on April 30, 2015.

Also Read Conflict Minerals Compliance: FREQUENTLY ASKED QUESTIONS

Basis the latest update CFSI now recommends CMRT v4.01a for collecting 2015’s supply chain data due to errors in CMRT v4.01. The CMRT v4.01a should be used for next SEC filing due May 31, 2016. ��CMRT v4.01 versus CMRT v 4.0

Declaration tab: The cell “I3” on CMRT v4.0 top right corner, shows an alert for more information even when all the necessary details are provided.
Smelter list tab: On selection of last two options (“Smelter not listed” or “Zhangyuan Tungsten Co Ltd”) from the smelter reference list available for Tungsten, the cell erroneously turns red.
Checker tab: The last 3 rows (“Smelter list- Tin”, “Smelter list- Gold”, “Smelter list- Tungsten”) turn green only when the smelter list is provided for Tantalum in the Smelter list tab.

��CMRT v4.0 versus CMRT v 3.02 The CFSI (Conflict-Free Sourcing Initiative) released the latest revision of the conflict minerals reporting template (CMRT) as of April 30, 2015. The CMRT v4.0 acts as a leading multi-industry tool which helps the manufacturers/suppliers to gather information through the supply chain regarding minerals used in their products, country of origin of the minerals, smelters and refiners used. The newer version of CMRT has been built such that it works across multiple softwares and operating systems. The tool has a simplistic structure to enable cross platform interactions. The CMRT 3.0, 3.01 and 3.02 versions are recommended for the collection of 2014’s supply chain data and the standard smelter list of the CMRT v3.02 version needs to be considered to file under SEC in 2015.The CMRT v3.02 underwent major changes for the new release of the CMRT v4.0. To improve the accuracy of users’ disclosure, CMRT v4.0 keeps the users updated with the recent changes in the IPC standard and smelter list. Along with the updated smelter list it also shows numerous translation changes. The changes that were observed in declaration and standard smelter names tab are discussed below: Declaration tab: The Company Information section remains unchanged on the tab but for the other sections like Sourcing and Policy Information slight modifications have been made on question 1-7 and A-J respectively. These changes are focused on the data collection of 3TG used instead of the broader category of conflict minerals. Standard Smelter Names tab renamed as ‘Smelter Reference List’: The renamed tab has been updated with commonly used alternate smelter names. For the selected metal and smelter name from the drop down, the Smelter City and the Smelter Facility Location loads automatically. This information would be helpful to have unique smelter data that will reduce ambiguity for the smelters that earlier had a multi-level facility reporting. The standard smelter list of CMRT v3.02 contains 279 smelters out of which 274 are unique while the updated standard smelter list contains 290 unique smelters. From the CMRT v3.02, 33 smelters were removed. Based on the CFSI’s revision on CMRT v3.02, we have listed the changes observed from the CMRT v4.0. Out of 290 unique smelters, 88 smelters were modified for the following reasons

56 smelters for Typographical Error
2 smelters for Location Correction
1 smelter for Metal Correction
29 smelters for Name Correction

The updated CMRT and standard smelter list is available on the CFSI website. The manufacturers need to consider these for the 2015 reporting. Conclusion The changes have been made to standardize the compliance for conflict minerals in the market. Consequent to which the manufacturers can source clear and precise data pertaining to 3TG. An important thing to note is that even with the revision, CMRT continues to have smelters mentioned in the standard smelter list who are undergoing due diligence. The standard smelter list will be updated by the CFSI regularly to help companies achieve their conflict minerals compliance. These updates are not only important for compliance but also for the better understanding of the smelters and integrating data on a uniform platform.

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How to effectively run your Reasonable Country of Origin Inquiry?

�ۿ۴�ý — Fri, 12 Dec 2014 07:38:51 +0000

Reasonable Country of Origin Inquiry (RCOI) is the important step in identifying the origin of conflict minerals in your supply chain. Most affected companies by this regulation have done the step at different scale of effectiveness during the 2013 reporting year.

We observed that most companies were not able to identify the mineral sources due to complexity of their supply chain and the lack of awareness in the tier-1 and tier-2 supplier base. ECCI and GeSI’s CMRT forms were available for standardizing the process across the industry, but some companies used their own RCOI forms which resulted in confusion that hampered the effectiveness of the process.

The major challenges observed in executing the RCOI effectively were as follows:

Limited time availability to approach several hundreds of suppliers to collect information
Limited knowledge about the regulation, across the Supply Chain
Language barriers, time zone differences and limitations of resources availability to handle this task internally
Prolonged delay in starting the compliance program
Low motivation levels of suppliers to provide the required information
Validating the data received from the suppliers and resolving red flags
Consolidating hundreds of CMRT files received to prepare a final report
Updating RCOI information each year and managing new supplier additions

As we know, completing RCOI effectively is the basis of the Form SD filing. RCOI is one of the major step in the due diligence process and running it effectively is essential for gaining knowledge about your supply base and identifying the risk associated with it.

The following steps will help you ensure control over the process.

Classify your suppliers as per volume based approach or spend based approach
Try to do a risk based classification of your suppliers
Build your priority in the supplier base
Communicate your conflict mineral sourcing policy to all your suppliers
Provide training and support for your suppliers on conducting their conflict mineral research
Adopt EICC- GeSI’s CMRT as your RCOI template and Join Conflict Free Sourcing Initiative
Decide if tool base or manual mode for the process is suitable based on the supplier nos. and complexity
Reach out to your suppliers using email and phone and ask them for conducting their own RCOI using the same template
Give them support to implement the RCOI and follow up at regular intervals
Collect the and engage with suppliers who did not respond or did not disclose smelters
Review the disclosures and check for red flags and resolve
Consolidate the report using MRPRO or your adopted conflict mineral tool

The RCOI process is a major step in your due diligence process. The above steps will give you a broader perspective as to how to handle your RCOI using the supply chain tracing process with Conflict Free Smelter Program as the foundation of your analysis. Keep an eye on the smelters which are approved and those are active in each metal category to ensure that you are identifying the riskier ones in your supply chain.

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How to Use Supplier Training as a Tool to Improve Conflict Mineral Responses from your Supply Chain?

�ۿ۴�ý — Fri, 05 Dec 2014 05:44:25 +0000

In addition to the Reasonable Country of Origin Inquiry (RCOI), the heavy lifting in conflict mineral compliance is the effort to survey your suppliers to gather . Industry has spent enormous amount of time in reaching out to suppliers and gathering this information in the past year. Different organizations have conducted studies on 2013 filings and have reported that the result of this supply chain analysis was not completely successful.

What does an issuer expect from its supplier in the conflict mineral survey?

The first criteria to complete a conflict mineral survey successfully is to have the supplier conduct a similar survey at its level in the supply base to understand the origin of conflict minerals in its products. Supplier should be able to identify the parts supplied by them to the listed company who asked for this survey and analyze and confirm whether those products contain 3TG. The supplier should have also established a decent level of due diligence within its organization to ensure that it does not fall under a risky supplier category.

The responses which are made through the should be based on the factual research the supplier has conducted. If the report is provided at product level, the supplier should be able to identify the parts/products and confirm whether the research was conducted by them. The report should also contain the smelter names which they have identified in their supply base which constitute the maximum percentage of supply of the conflict minerals.

Supplier Training and support- A tool to motivate the suppliers to provide better declarations

is a new regulation in US. Most suppliers are unaware about the details of the compliance requirements. In most cases, issuers who are affected by the SEC filing requirement have a vast supplier base spread across different parts of the world. This makes it more difficult to get responses as there is nothing legally binding the supplier to provide information. In several cases, replacing the non-responding supplier is not an easy task.

Most studies in the industry confirm that issuers who invested more resources in the front end communication, training and support have managed to reduce their overall conflict mineral compliance cost. A training delivered in a supplier conference or through a webinar will act as an effective tool for improving supplier responses and quality of responses.

A seminar/ webinar focusing on the regulation, its applicability, reporting process and tools (if any) will help suppliers to engage with the issuer more closely in this compliance process. Supplier training should be refreshed every year due to change of resources in the supply base and update them about the recent development and changes in the reporting process.

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