Honda, Ford spearhead new conflict minerals reporting tool

Honda, Ford spearhead new conflict minerals reporting tool

Editor's Note: The iPoint Conflict Minerals Platform is the most recent tool released that enables companies to trace their supply chain. Come back next week for an article from the Responsible Sourcing Network that will provide an overview of the range of systems and tools available for conflict mineral reporting.

Managing a web of suppliers isn’t easy. Now companies have an added responsibility: collecting reports from said suppliers on whether they use conflict minerals from war-stricken parts of Africa in their products.

The U.S. Securities and Exchange Commission passed a ruling in August requiring public companies to examine their supply chains and disclose if their products use tin, tungsten, tantalum or gold from the Democratic Republic of Congo, minerals that are said to fuel the conflict in the Central African nation.

But tracing hundreds – and in some cases thousands – of suppliers can be a daunting task.

A new web-based tool developed in collaboration with leading automakers aims to simplify the process. The iPoint Conflict Minerals Platform (iPCMP), launched by the Automotive Industry Action Group (AIAG) in partnership with product sustainability experts at iPoint, will help suppliers in all industries identify whether their products contain conflict minerals.

More than two dozen auto companies, including Honda, Ford and the Chrysler Group, worked since last year to develop the tool, which enables businesses to publish their conflict mineral status and helps them create reports that adhere to governmental requirements.

Many suppliers lack the resources to adequately examine their supply chains, said Tanya Bolden, AIAG’s corporate responsibility program development manager.

“The goal throughout this has been to make this process as simple as possible for the various suppliers in our supply chain to engage,” Bolden said. “We fully realize that many of the suppliers don’t have the resources that a tier-1 may have.”

Photo of gold link in chain provided by billdayone via Shutterstock

The tool, which is based on the EICC-GeSi template, allows companies to request information from their suppliers all the way down to the smelter, said Nick Stein, marketing manager at iPoint.

“The solution is simple, yet powerful,” he said. “[It] greatly streamlines reporting processes.”

The average tier-1 company has around 2000 suppliers, said Stein. To determine whether conflict minerals are present in the supply chain, a company needs to collect reports from every single one of its suppliers.

“There is a huge need for simplified and automated reporting processes, because it would be extremely labor-intensive to do the reporting manually,” Stein said. “iPCMP fills this gap.”

To sign up, a company creates an account on the iPCMP website, which Stein says takes less than five minutes. Once logged in, a company can send conflict mineral data requests to its suppliers. Ideally, all companies in the supply chain use iPCMP, said Stein, but the tool can also import and process conflict minerals reports that have been created by suppliers that are not signed up.

“This gives users maximum flexibility in creating their reports,” said Stein.

Once a company sends its request, the supplier is notified and guided through the process of filling out the reporting form, which is then sent back to the company.

Eventually, a company will have collected enough data from its suppliers to create a report that complies with SEC requirements.

“iPCMP enables you to aggregate the various reports into a single report, which you then amend with your own company’s information,” Stein said. “Afterwards, you can either pass on this report to your customer, or to the SEC.”

There are no limitations on the number of tiers or companies that a business can add and interact with. To learn how to navigate the tool, users can access an e-learning course as well as a user guide. iPoint is also offering introductory webinars.

The conflict minerals reporting requirements are very new, Stein said, so as processes and standards emerge, iPoint will add them to the solution. Ongoing supplier engagement is key, he said, to enhance and improve the tool.

iPCMP is the latest in a string of initiatives developed by AIAG. Most markedly, the association helped develop the widely-used EICC-GeSI program, which helps standardize information received from suppliers and offers a template that identifies the smelters that process metals in the supply chain.

In 2011, the association felt the need to do more to help its members, said Bolden, in anticipation of the SEC's upcoming vote on disclosure requirements which was originally scheduled for April of that year.

“We wanted to use [the EICC-GeSI] template, but one that helped us navigate the automotive supply chain and the other companies involved in our supply chain,” she said. “We looked at how we could develop a tool that could support our companies.”