Canadian companies still in early stages of conflict minerals compliance: PwC
By Jen St. Denis
Most Canadian companies who must comply with complex new U.S. securities regulations around conflict minerals are still in the early stages of compliance efforts, according to a survey released by PwC today.
The Dodd-Frank Wall Street Reform and Consumer Protection Act requires companies to disclose payments to governments and any minerals coming from Africa’s “conflict minerals” zone (Democratic Republic of Congo and adjoining countries). The new rule came into effect earlier this year.
PwC’s survey found that 44% of respondents expected to be either directly or indirectly affected by the SEC rules because their products contain conflict minerals.
The four industries most likely to be affected by the rule are:
- industrial products and manufacturing;
- technology;
- retail and consumer; and
- automotive.
Some Canadian mining companies must also comply.
The survey showed that 26% of respondents weren’t sure whether or not the rule applied to them.
While 58% of respondents viewed the rule as a compliance exercise only, 33% viewed the conflict minerals legislation as an opportunity to improve their supply chain. The survey found that 20% of respondents said their company’s social responsibility or sustainability departments were involved in the compliance effort.
Investigating whether or not their supply chains contain conflict minerals will likely be the most challenging part of compliance, says the report.
“More than a quarter of the companies we surveyed indicated their supply chain contains over 1,000 suppliers. Less than 17% of companies have fewer than 100 suppliers,” says the report.
“Multiply those by an often unknown number of upstream suppliers, and the process of tracking conflict minerals becomes exponentially more complex.”
The survey noted that the automotive, technology and industrial products and manufacturing industries have made the most progress, likely because trade associations in those industries are more actively involved in the conflict minerals process.
