Conflict Free Minerals Supply Chain Workshop 12

Washington, DC

September 10 and 11, 2013 1

Photo by Jay Celorie

Conflict Free Minerals Supply Chain Workshop 12

Welcome

Washington, DC

Mike Loch, Motorola Solutions

2

EICC® 81 Members (July 12, 2013)

3

GeSI Members (as of Sep 2013)

Members

Partners

4

CFSI Partners ( As of Sep 8, 2013 )

Partner Industry Associations

Non-Member Partner Companies

+ 4

others

5

CFSI Commitment

• The CFSI is committed to improving conditions in its supply chain and mining activities that fuel conflict are unacceptable.

• In order to enable participating companies to source conflict-free minerals, we are taking action by: – Implementing Conflict-Free Smelter and Due Diligence Programs

– Supporting in-region sourcing schemes to enable future legitimate trade from DRC and surrounding countries

– Supporting OECD due diligence guidance and pilot

– Engaging with stakeholders for collaboration and efficiency

6

Upstream

Smelters /

Refiners

Downstream

Conflict Free Smelter (CFS) Program

Raw Materials

Finished Products

CFSI Supply Chain Strategy

7

Why Here?

1) Conversion

2) Small Numbers

(<500)

RCOI \ Due Diligence

In-Region Sourcing

In-Region Schemes

Conflict Free Smelter Program (CFSP)

Company Assurance

Finished

Product

MINE SMELTER/REFINERY OEMS

CFSI Conflict-Free Sourcing Approach

8

Conflict Free Sourcing Initiative

Supply Chain Workshop XII

Conflict Minerals Overview Washington DC

September 10, 2013

Overview

• Definitions and Acronyms • Overview of Conflict Minerals • U.S. Law – Dodd Frank Act • What Are Conflict Minerals • SEC Three Step Process • OECD Due Diligence Requirements • Industry Approach

– In-region Activities – Conflict Free Smelter Program – Conflict Minerals Reporting Template

Definitions and Acronyms

• ASM – Artisanal and Small-scale Mining

• BGR – German Federal Institute for Geosciences and Natural Resources – Certified Trading Chains (CTC) Program

• CFS – Conflict-Free Smelter program

• FARDC – DRC Army

• FDLR, CNDP, M23, Mai-Mai – Illegal Armed groups

• GIZ Deutsche Gesellschaft für Technische Zusammenarbeit (German Technical Cooperation)

• ICGLR – International Conference on the Great Lakes Region – 11 Member Countries

• iTSCi – ITRI Tin Supply Chain Initiative

• LBMA – London Bullion Market Association

• MONUSCO – United Nations Organization Stabilization Mission in DRC

Definitions and Acronyms

• OECD – Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chain Management of Minerals from Conflict-Affected and High-Risk Areas

• PAC – Partnership Africa Canada, implementing partner for the development of the ICGLR Regional Certification Mechanism (RCM), and recipient of PPA funding for gold traceability.

• Pact – Implementing partner for iTSCi

• PPA – Public Private Alliance for Responsible Minerals Trade

• PROMINES World Bank Technical Assistance to the DRC, co-funded by DFID

• RJC – Responsible Jewelry Council

• UN GoE – United Nations Group of Experts

• WGC – World Gold Council

Focus on Conflict Minerals

and the DRC

• United Nations reports (2001, 2008 and 2009) that minerals trade directly contributes to funding the war in the Congo.

• “Conflict minerals” issues have become the focus of numerous non-governmental organizations (NGO), as well as the media.

• US legislation signed in 2010 requires US companies to disclose sources of tin, tungsten, tantalum and gold; and to conduct due diligence in their supply chain (Dodd-Frank Wall Street Reform and Consumer Protection Act)

Mineral

wealth

funds

bloodshed

in the

Congo

Conflict Minerals Facts

• Tin (Sn) , Tungsten (W), Tantalum (Ta), Gold (Au) are mined in the Democratic Republic of the Congo (DRC).

• Mining areas in eastern DRC provinces are the site of ongoing conflict. Considered by some the worst since WWII

• Revenues from mining activity sustaining the conflict and ongoing human suffering in the region

• Not all mines in the DRC are associated with conflict

• Nations neighboring the DRC are the transport or smuggling routes

• These minerals are not unique to the DRC. The majority of the global supply of these minerals originates outside of the region.

The “3T’s plus G”:

Tin (Sn) , Tungsten (W) Tantalum (Ta) and Gold (Au)

U.S. Law

• July 2010 - President Obama signs the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Section 1502 requires companies to file disclosures and reports with the U.S. Securities and Exchange Commission (SEC) related to the use of tin, tantalum, tungsten and gold in their products.

• The SEC issued the final rule August 2012 implementing the provisions of Section 1502.

• The first reporting year began January 1, 2013 and the first report to the SEC is due May 31, 2014.

What are Conflict Minerals?

The Dodd-Frank Act defines 'Conflict minerals' as the following minerals as well as their derivatives: 1. Columbite-tantalite (Coltan) refined into tantalum (Ta)

– DRC provides ~17% of global production 2. Cassiterite refined into tin (Sn)

– DRC provides <5% of global production 3. Wolframite refined into tungsten (W)

– DRC provides <2% of global production 4. Gold (Au)

– DRC provides <2% of global production

Regardless of their origin Regardless of whether connected to armed groups

Commonly referred to as: 3T’s plus Gold or 3TG

SEC Rule Overview:

Basic Three-Step Process

1. Determine applicability

2. Conduct “reasonable

country of origin inquiry”

3. Exercise due diligence and

potentially file an audited Conflict Minerals Report

Any issuer that files reports with SEC under Exchange Act sections 13(a) or 15(d)

•Includes:

•U.S. Companies that issue stock

•Foreign private issuers that file Form-20F or 40F

•Regardless of size

•Excludes:

•Foreign private issuers of unsponsored ADRs

Conflict minerals are necessary to the functionality or production of a

product the issuer manufactures or

“contracts to manufacture”

Step 1: Applicability

AND

Step 2: Reasonable Country

of Origin Inquiry (RCOI)

Designed to evaluate whether minerals in a company’s supply chain originated from:

• Recycled /scrap sources; or

• Outside Covered Countries.

Determines whether Step 3 due diligence

is necessary

Step 3: Due Diligence

Currently, due diligence means using OECD Due Diligence Guidance. 1. Establish strong management

systems

2. Identify supply risks

3. Implement strategy to address the risks

4. Independent audit of Smelters/Processors

5. Report File Form SD and submit audited Conflict Minerals Report to SEC

Step 3: Transition Period

“DRC conflict free undeterminable” • Available for a transitional period

– 2 years for all issuers – 4 years for smaller reporting companies

• Will allow companies time to better develop and implement RCOI and due diligence procedures

• Must still file CMR, but no requirement to audit during transition period

• Once transitional period ends, these products will have to be described as “not found to be DRC conflict free”

In-Region Schemes

Conflict-Free Smelter Program (CFS)

Company Assurance

Finished Product

MINE SMELTER/REFINERY OEMS

Industry Approach to

Conflict-Free Sourcing

(pinch point)

In-Region Schemes

• The ICGLR is an 11 member organization consisting of the Countries of the Great Lakes region of Africa have implemented their Regional Certification Mechanism (RCM)

• iTSCi program is the first in-region mineral tracing initiative supporting locations in DRC and Rwanda

• The CTC is a program supported by the German government and certifies mines to defined performance standards.

• The Public-Private Alliance, sponsored by the U.S. State Department and USAID partnering with industry and civil society, is supporting systems that trace and certified mineral supply chains in the Great Lakes Region

• Solutions for Hope program sources conflict-free tantalum from Katanga province of DRC

• Partnership for Social and Economic Sustainability program sources conflict-free tantalum from Katanga province of DRC

• Conflict Free Tin Initiative program sources conflict-free tin from the South Kivu province of DRC

Conflict-Free Smelter (CFS)

Program A voluntary initiative with independent 3rd party audits of smelter and

refiner procurement and tolling activities to assess if the smelter or refiner demonstrates that all the minerals they processed originated from conflict-free sources. CFSI (formerly the EICC and GeSI extractives workgroup) worked in collaboration with multiple stakeholders to develop the CFS program.

• Why: Provides a credible mechanism that enables and encourages responsible sourcing of tantalum, tin, tungsten and gold

• Schedule: Addressing each metal separately, but concurrently • Results: A list of smelters and refiners who are compliant with the

CFS assessment protocol will be posted on the CFS website.

http://www.conflictfreesmelter.org ** Companies make their own sourcing decisions. **

Conflict Minerals Reporting

Template • What is the Conflict Minerals Reporting Template?

– A tool that provides a common means to collect due diligence information related to the source of conflict minerals.

– Companies may use of the Template as an element of their conflict minerals DD program to assist in verifying responsible sourcing.

– Companies will be able to forward a completed Template to all of their customers that request this information.

Conflict Free Sourcing Initiative (CFSI) Conflict Free Smelter Program (CFSP)

Jean-Paul Meutcheho Global Advanced Metals (GAM), CFSI Member,

CFSP Compliant Smelter

10 September 2013

CFSP Overview

• CFSP Background

• CFSP Specifics

• CFSP Auditor Information

• CFSP Audit Costs

• Additional Information

Supply Chain Focal Point – Smelters and Refiners

Conflict-Free Smelter Program

The Conflict Free Sourcing Initiative (CFSI) has spearheaded the development of a 3rd party audit process to determine if smelters/refiners are capable of sourcing conflict-free minerals.

• Why: Provide a mechanism that enables and encourages responsible sourcing of tantalum, tin, gold, tungsten

• Schedule: Addressing each metal separately, but concurrently – Tantalum, tin and gold smelter/refiner assessments are underway; tungsten

smelter assessments are expected to begin in 2013.

• Results: A list of smelters/refiners who are certified as compliant with the CFSP audit protocol, which is posted on the CFSP website. – http://www.conflictfreesmelter.org

** Companies make their own sourcing decisions. **

What defines a smelter or refiner? The CFSP audits smelters and refiners. Therefore, it’s important to identify the correct

smelters and refiners within the supply chain and have those companies audited to

determine compliance to the CFSP audit protocol.

Definition: a company which converts mineral ores, concentrates or recycle/scrap

material to a metal containing intermediate, purified metal or metal compound. Metal

specific definitions as follows:

– Tantalum (Ta) smelter: a company which converts tantalum containing ores, slags,

powder or scrap into tantalum containing products or intermediate products.

– Tin (Sn) smelter: a company which treats crude tin, containing concentrates and

secondary material to produce crude or fully refined tin.

– Tungsten (W) smelter: a company which converts tungsten ore, tungsten concentrates,

or tungsten bearing recycled/scrap material to tungsten containing intermediates such

as Ammonium Para-Tungstate (APT), Ammonium Meta-Tungstate (AMT), Ferrotungsten,

and Tungsten oxides.

– Gold (Au) refiner: a metallurgical operation that produces fine gold with a concentration

of 99.5% or higher from gold and gold-bearing materials with lower concentrations.

Principles of CFSP Audit 1. Conflict Minerals Policy

The Company will have a documented, effective and communicated policy for procurement of materials which explicitly avoids utilization of conflict minerals and adherence to regulations for transportation and other requirements including

– Public communication of the policy (such as posting to company website)

– Policy embedded into standard operating procedures and individuals trained

– For those companies sourcing from the DRC or nine surrounding countries, their sourcing policy will have to comply with Annex II of the OECD Due Diligence Guidance

2. Mass Balance – The Company will have a established mechanism for tracing sold goods back to the

purchased material source (aka traceability).

– Reconciliation of receipts, inventories, and sales volumes to demonstrate receipts are fully accounted for in a mass balance and do not exceed the theoretical sales amount.

3. Procurement and incoming materials documentation All materials (including direct purchases and/or tolling) are appropriately documented to be from non-conflict sources and recycle/scrap material confirmed as such.

Audit of prior year(s) procurement activities, not a minerals certification

CFSP Audit Focus

32

Company Mass Balance - Includes all inventory - Includes all facilities

Ore / Concentrate

Recycled / Scrap

Toll Customer

Finished Products

Toll Supplier

Conflict Free

Policy

Intermediates

Unfinished Products

Company Program Validation - Conflict Free Policy - Conflict Free Sourcing Systems

Sourcing Processes Validation

CFSP Audit:

Procurement Documentation

• Level 1: countries with known active ore production which are not identified as plausible countries for export out of region, smuggling, or transit of conflict minerals

• Level 2: known or plausible countries for export out of region, smuggling, or transit of conflict minerals (currently: Kenya, Mozambique, South Africa)

• Level 3: ore sources currently within conflict regions that are potentially supplying ore materials which currently include the Democratic Republic of the Congo and the adjoining countries

Documentation Examples

L1 L2 L3 Examples of Acceptable Documentation

X X X Government-issued country of origin certificate or copy of mine license/certificate (for domestic mines only)

X X X Government issued export certificate or similar document (for imported material)

X X X Bills of lading or transportation documentation

X X X Sample analysis/results from supplier and/or smelter

X X On-site mine visit reports conducted by the smelter or representative

X X All documents that validate chain of custody from mine to smelter

X X Government issued operating license/certificate for industrial operations or registered cooperatives.

X Demonstrated sourcing from an OECD conformant process

CFSP Audit Process Overview

CFSP Auditor Information

• Qualified CFSP auditing firms – Liz Mueller, Inc.: http://www.lizmuller.com/ – UL-STR: http://www.strquality.com/en-

us/responsible-sourcing/Pages/default.aspx – SGS: www.sgs.com

• Background and Details – Follow ISO19011 standards – Conduct audit expectations in accordance to OECD – Global company with regionally based staff – CFSP selects auditors for the smelter primarily based

on cost and availability

CFSP Audit Cost Information Because smelter benefit from their participation in the CFSP due to the resultant company marketing information, smelters are currently expected pay the audit costs to participate*. • CFSP costs:

– Typical program costs are $5,000-10,000 USD – Cost covers 3rd party auditor and CFSI admin costs – CFSI nor its member companies financially benefit from the CFSP audit

payments – Audit costs are directly related to the amount of time the auditor

needs to complete the validation – Properly preparing for the audit before the auditors arrive on-site is

the best way to minimize audit costs

• Audit Frequency: – Annual on-site validation currently required – Annual re-audit is needed to maintain CFSP listing

* An audit funding Foundation is attempting to be established

CFSP Online Indicators / Active List

• Active = signed agreements, audit progress being made

• Presently no Tungsten smelters active

http://www.conflictfreesmelter.org/cfshome.htm

CFSI Conflict-Free Sourcing Approach

Finished

Product

MINE SMELTER/REFINERY OEMS

In-Region Schemes

Conflict Free Smelter Program (CFSP)

Company Assurance

Conflict Minerals Reporting Template: Philosophy and Approach

Re

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es

ts

Co

mp

lete

d T

em

pla

tes

Company Assurance

The CMRT and forthcoming IPC standard

-Michael Rohwer, EICC -Fern Abrams, IPC

CFSI Conflict-Free Sourcing Approach

In-Region Sourcing

Conflict Free Smelter Program

Company Due Diligence

MINE SMELTER / REFINERY OEMS

Company Assurance

Development, integration, and maintenance of tools and processes which support a down-stream company’s management system and risk assessment activities • Policy language included in the EICC Code

of Conduct (http://www.eicc.info/eicc_code.shtml)

• Information collection tool on supplier’s due diligence processes and sourcing: Conflict Minerals Reporting Template

• Establishing resources and processes to support information collection and analysis

Conflict Minerals Reporting Template

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English

Revision 2.03a July 25th, 2013

The purpose of this document is to collect sourcing information on tin, tantalum, tungsten and gold used in products Link to Terms & Conditions

Mandatory fields are noted with an asterisk (*). The information collected in this template should be updated annually. Any changes within the annual cycle should be provided to your customers

Company Information

Company Name (*):

Declaration Scope (*):

Description of Scope:

Company Unique Identifier:

Address:

Authorized Company Representative Name (*):

Representative Title:

Representative Email (*):

Representative Phone:

Date of Completion (*):

Answer the following questions 1 - 6 based on the declaration scope indicated above

1) Are any of the following metals necessary to the functionality or production of your company's products that it manufactures or contracts to manufacture? (*) Answer Comments

Tantalum (*) Tin (*) Gold (*) Tungsten (*)

2) Do the following metals (necessary to the functionality or production of your company's products) originate from the DRC or an adjoining country? (*) Answer Comments

Tantalum (*) Tin (*) Gold (*) Tungsten (*)

3) Do the following metals (necessary to the functionality or production of your products) come from a recycler or scrap supplier? (*) Answer Comments

Tantalum (*) Tin (*) Gold (*) Tungsten (*)

4) Have you received completed Conflict Minerals Reporting Templates from all of your suppliers? (*) Answer Comments

Tantalum (*) Tin (*) Gold (*) Tungsten (*)

5) For each of the following metals, have you identified all of the smelters your company and its suppliers use to supply the products included within the declaration scope indicated above? (*)

Answer Comments

Tantalum (*) Tin (*) Gold (*) Tungsten (*)

6) Have all of the smelters used by your company and its suppliers been validated as compliant in accordance with the Conflict-Free Smelter (CFS) Program and listed on the Compliant Smelter List for the following metals? (*) Answer Comments

Link to "CFS Compliant Smelter List"

Tantalum (*) Tin (*) Gold (*) Tungsten (*)

Answer the Following Questions at a Company Level

Question Answer Comments

A. Do you have a policy in place that includes DRC conflict-free sourcing? (*)

B. Is this policy publicly available on your website? (*)

C. Do you require your direct suppliers to be DRC conflict-free? (*)

D. Do you require your direct suppliers to source from smelters validated as compliant to a CFS protocol using the CFS Compliant Smelter List? (*)

E. Have you implemented due diligence measures for conflict-free sourcing? (*)

F. Do you request your suppliers to fill out this Conflict Minerals Reporting Template? (*)

G. Do you request smelter names from your suppliers? (*)

H. Do you verify due diligence information received from your suppliers? (*)

I. Does your verification process include corrective action management? (*)

J. Are you subject to the SEC Conflict Minerals disclosure requirement rule? (*)

© 2011 Electronic Industry Citizenship Coalition, Incorporated and Global e-Sustainability Initiative. All rights reserved.

The Conflict Minerals Reporting Template

Conflict Minerals Reporting Template: Philosophy

Define a common industry approach supporting the downstream Due Diligence requirements of the SEC and

to empower companies to make informed choices about conflict minerals in their supply chain

• Preserve customer-supplier relationship

• Reduce burden on suppliers and customers

• Preserve confidentiality, enable sharing

Conflict Minerals Reporting Template: Approach

• Common reporting template

• Free

• Accessible by all

• Provide instructions and training

• Revision control to preserve the integrity of the template

• Change control management

Conflict Minerals Reporting Template Information Flow

Conflict Minerals Reporting Template Access

Click here for CFS Program

Supporters

Conflict Minerals Reporting Template & Dashboard Select Language▼

http://www.conflictfreesmelter.org/ConflictMineralsReportingTemplateDashboard.htm Click the following links to download the Template, the Orientation presentation (which includes a link to download the Dashboard), and the Process Steps description to use the Dashboard: Conflict Minerals Reporting Template •EICC GeSI Conflict Minerals Reporting Template Version 2.03a - New version! •YouTube instruction video on how to complete the Conflict Minerals Reporting Template

Conflict Minerals Reporting Template Updates

• Version 2.03

– Resolved Microsoft Excel 2003 incompatibility

– Clarified instructions

– Corrected translations

– Revised aesthetics

– Added, corrected, and revised smelter names

Conflict Minerals Reporting Template Current Challenges

• Does not meet needs for all industries

• Read strictly imposes burdens on some respondents

– Distributors

– Product-level reports

• Inaccurate smelter name responses

IPC-1755:

A Multi-Industry Effort to

Standardize Conflict Minerals Data

September 10, 2013

Fern Abrams

Director, Government Relations and

Environmental Policy

About IPC - Association Connecting

Electronics Industries

• Founded in 1957 as the

Institute of Printed Circuits

• Strong foundation as a technical

organization dedicated to meeting

industry needs

• Focus on design, PCB

manufacturing and electronics

assembly

• Not-for-Profit driven by industry

needs

53

IPC Today

IPC is an international trade association dedicated to the

furthering the competitive excellence and financial

success of its 3,400 member companies that make, use,

specify and design printed boards and assemblies,

including those in:

• Advanced microelectronics

• Aerospace and military

• Automotive

• Computer

• Industrial equipment

• Medical equipment and devices

• Telecommunications industries

54

IPC Standards

• Standards are developed by volunteer

committees

• Committees are made up of subject matter

experts across the electronics supply chain

• Committees are open to all interested

participants, regardless of membership

• Over 1,000 standards exist within the IPC

library

55

IPC and Conflict Minerals

• High level of member interest

• Well known for our involvement

– Member advocacy

– Involvement in OECD Due Diligence pilot

implementation project

– Developing due diligence guideline

– Strong interest in supply chain issues

including data exchange

56

Why Data Exchange

Standards?

Why a Data Exchange Standard

• Many different data management solutions

will be used across the supply chain

• These data management solutions must

work together – need a standard electronic

data format

• Supports the exchange of conflict minerals

information between trading partners (B2B)

• Reduces burden on the supply chain

58

Conflict Minerals Data Exchange

Standard

• Goal: Development of a broad, multi-industry,

consensus standard for communications of conflict

minerals data

• Leveraging our materials data exchange experience

• ‘Streamlined’ approach to developing a consensus

standard

– Build on and integrate existing approaches

– Adhere to American National Standards Institute

(ANSI) approved procedures

59

Why a Data Exchange Standard

A number of software vendors are developing conflict

minerals tools

AIAG/iPoint Papros/MRPRO

BomCheck PTC

Dassault Systems Total Parts Plus

EICC/GeSI Template Silicone Experts

Foresite

Listed companies are all participating in IPC-1755

60

Data Exchange Standard vs.

Reporting Form

• IPC-1755 Conflict Minerals Data Exchange Standard:

– Defines what data is to be collected and shared

– Defines the language (XML) for sharing data

– IPC-1755 is NOT a reporting form

• Independent third-party providers develop tools (i.e.

forms) compatible with IPC-1755

– Ex. EICC/GeSI Template, iPoint Conflict Minerals Platform

– Data can be easily exchanged among all tools that support IPC-

1755

– Some tools provide sophisticated data management

– Tools can also interface with internal company systems

61

IPC Standards Process

Overview

• Open to all interested parties

• No charge for participation

• Voting on the draft standard by participants

• Multi-industry collaboration on IPC-1755

– MOUs with EICC, AIAG, and JEITA

– Participating organizations will jointly publish the

standard, if approved according to their own

processes

62

IPC-1755

• Working draft of the standard developed by

outside consultants

• Based on Dodd-Frank, SEC rules, EICC/GeSI

Reporting Template and draft IPC standard

• Circulated Final Draft for Industry Review –

January 2013

• Comments resolved during February 2013

meeting

• Draft standard revised based on committee

decisions

63

Overview of IPC-1755

• Terms and Definitions

• Questions cover:

– Applicability

– Company policies and conflict minerals program/due

diligence

– Smelter information

• XML Data Structure (schema)

• Non-normative Appendices

– Covered countries

– Conflict metals

– SEC rule overview

– Guidance on data verification

64

Key Provisions of the Standard

• Three declaration classes

– Company Level: Declaration for all the products

manufactured by the company

– Product or List of Products Level

– User-defined Level: Declaration shall be defined as

agreed to by the supplier and requestor (i.e. company

division level or category of products)

• Customer and supplier to decide on declaration class

• Provides flexibility and improve the likelihood of

standard adoption

65

Data Elements: Applicability

Initial set of questions establish applicability of

conflict metals reporting obligations

– Is each conflict metal intentionally added to your

product?

– Is each conflict metal necessary to the production of

your company’s products and is contained in the

finished product that your company manufactures or

contracts to manufacture?

– Does each conflict metal originate from the covered

countries?

– Does 100 percent of each conflict metal (necessary to

the functionality or production of your products) come

from a recycler or scrap supplier?

66

Data Elements:

Due Diligence/Company Policies • Have you received conflict metals data/information for each

metal from all relevant suppliers of 3TG?

• For each conflict metal, have you identified all of the

smelters your company and its suppliers use to supply the

products included within the declaration scope indicated

above?

• Has all smelter information been provided?

• Do you have a policy in place that addresses conflict

minerals sourcing? Is it publicly available on your website?

• Do you require your direct suppliers to be DRC Conflict

Free?

67

• Have you implemented due diligence measures for conflict

free sourcing?

• Do you collect conflict minerals due diligence information from

your supplier which is in conformance with IPC 1755 Conflict

Minerals Data Exchange standard?

• Do you request smelter names from your suppliers?

• Do you verify due diligence information received from your

suppliers?

• Does your verification process include corrective action

management?

• Are you subject to the SEC Conflict Minerals rule?

Data Elements:

Due Diligence/Company Policies

68

Data Elements:

Smelter Information

• Smelter Name

• Smelter Country

• Smelter Contact Information

• Smelter Identification

• Source of Smelter Identification Number

• Does 100% of the smelter’s feedstock come from

recycled or scrap material?

• Name of Mines

• Location (country) of Mine(s)

69

Consensus Balloting

• Proposed Standard for Ballot circulated for sixty

days; closes September 26, 2013

• Only active participants may vote

• IPC ensures that the consensus balloting group

is fair and balanced

• Any interested stakeholder is welcome to

comment on the proposed standard

70

Approval by Participating

Associations

• Associations will review and ballot the proposed standard according to their own process

• Approval of the standard requires the support of 2/3 of the participating associations

– Dissenting associations will have the option of not being listed as a supporter of the standard

71

Next Steps

• If standard passes this ballot, a final

published standard is expected by the end of

2013

• If the standard is not approved, revision and

re-balloting would push publication to 2014

72

Questions?

Fern Abrams

(703) 522-0225

fabrams@ipc.org

Conflict Free Sourcing Initiative Workshop

74

Conflict Minerals Certification and

Traceability Program Updates:

Implementation of the Regional

Certification Mechanism

PRESENTATION DU CERTIFICAT CIRGL/RDC

ET DU PLAN D’OPERATIONNALISATION DE LA

MISE EN OEUVRE DU MECANISME DE

CERTIFICATION CIRGL

REPUBLIQUE DEMOCRATIQUE DU CONGO

Présenté par Monsieur Joseph IKOLI YOMBO Y’APEKE, Directeur de Cabinet Adjoint du Ministre des Mines, Chef de la Délégation

et assisté par Monsieur Freddy MUAMBA KANYINKU, Directeur des Etudes et

Méthodes, CEEC

Notre intervention se resume en deux parties à savoir:

I. Présentation du Certificat CIRGL/ RDC; II. Plan opérationnel de la mise en circulation du certificat CIRGL/ RDC

I. Présentation du Certificat CIRGL

Le certificat de la CIRGL/ RDC comprend trois volets : Le 1er volet à remettre à l’exportateur ; Le 2ième volet, à coller sur l’enveloppe contenant tous les documents de traçabilité destinés à l’Autorité d’importation ou Autorité importatrice, indique que ladite enveloppe ne peut être ouverte pour l’inspection que par l’Autorité précitée ; Le 3ième volet réservé à l’Autorité d’importation du pays auquel est destiné le lot concerné. Ce volet accompagne le chargement et doit être retourné au CEEC, organisme chargé de procéder à l’expertise et à l’évaluation des minerais en République Démocratique du Congo.

SPECIMEN DU CERTIFICAT CIRGL RDC

Papier / Paper

Description des quelques éléments de sécurité

• Papier filigrané standard, fibres visibles rouges, fibre invisible jaunes et bleues, réactifs (Acides, alcalins, solvants, chlore)

• Fond anti copie

• Fond irisé

• Encre Tehermochrome 37°P

• Encre Grattable

• Hologrammes

Description des Mentions permettant d’assurer la traçabilité du lot, à savoir:

• Au recto :

– Le numéro du certificat ;

– Le numéro du chargement ;

– Le lieu d’origine ;

– La province d’origine ;

– Le nom et adresse de l’exportateur ;

– Le numéro de la licence d’exportation ;

– Le nom et adresse de l’importateur ;

– La date d’expédition ;

– La date d’expiration du certificat ;

– Le nom du transporteur ;

– La ville et pays de transit ;

– Type d’emballage et le numéro du container ;

– Le minerai, le symbole chimique, son poids net et sa teneur, les autres métaux contenus ainsi que la valeur du lot ;

– Le nom de l’Autorité de certification ou son délégué dûment désigné, sa qualité, sa signature ;

– La date d’émission

UV active

VERSO DU CERTIFICAT

Tableau de traçabilité

– Le code du site d’exploitation d’origine ;

– Le nom du site ;

– Les coordonnées géographiques ;

– La localité ;

– Le territoire, district, province, la quantité.

Autorité de Certification

Le Ministre ayant les mines dans ses attributions et le Directeur Général du CEEC constituent l’Autorité de Certification de la RDC.

En cas d’empêchement ou d’absence, ils sont remplacés par :

– Le Vice-ministre ou le Secrétaire Général pour le Ministre ;

– Le Directeur Général Adjoint ou Directeur Technique pour le Directeur Général du CEEC

– Les personnes habilitées conformément aux textes régissant leur services respectifs pour les délégués.

BAT / Press check

© 2013 Oberthur Fiduciaire

Vérification de la cohérence des couleurs

Inspection des premiers certificats à venir au large de la presse

Coordination de la production

La production a été

coordonnée pour

répondre à tous les

besoins du CEEC

Le CEEC est en

possession d’un

stock de 100.000

certificats prêts à

être délivrés.

1. Montage du logiciel hybride

1.0. Cette solution, conçue et mise en œuvre par l’équipe du CEEC, permet d’assurer le suivi des inspections et certifications des sites miniers de la chaine de possession des minerais désignés et la certification des exportations des minerais désignés afin de répondre aux requêtes de la CIRGL

II. Plan opérationnel de la mise en circulation du certificat CIRGL/ RDC

1.1. Test unitaire et validation du logiciel

Le test du fonctionnement intégral et de validation a été fait à la satisfaction des utilisateurs.

1.2. Définition des procédures de centralisation

Les procédures d’envoi des données par les entités et leurs centralisation à la Direction Générale du CEEC avant transfert à la base des données de la CIRGL basée à Burundi sont quasi terminées.

Le CEEC est en train de rédiger le manuel d’utilisateur ainsi que son contenu pédagogique lequel sera prêt avant le 30 septembre 2013.

1.3.Déploiement de la solution finale

le programme d’installation du logiciel a été finalisée;

la solution Finale est déjà installé dans 10 ordinateur destinés aux différents points de sortie dissimilés à travers la RDC.

2. Atelier de Formation

Le CEEC, concepteur de l’application, organise trois ateliers, à la demande de Son Excellence Monsieur le Ministre des Mines, relatifs à la formation des agents utilisateurs des services intervenants dans la chaine d’approvisionnement à savoir : SAESSCAM, CADASTRE MINIER, ADMINISTRATION DES MINES, ITRI et BGR.

Le calendrier se présente comme suit:

-Lubumbashi: du 15 au 20 septembre 2013;

-Kalemie; du 23 au 28 septembre 2013;

- Bukavu: du 05 au 10 octobre 2013

L’Objectif étant de réunir les services intervenants dans la chaine d’approvisionnement, commercialisation et d’exportation en vue d’analyser et de mettre en place une matrice d’informations à interéchanger avec le CEEC .

L’Objectif étant de réunir les services intervenants dans la chaine d’approvisionnement, commercialisation et d’exportation en vue d’analyser et de mettre en place une matrice d’informations à interéchanger avec le CEEC .

MODELE DE MATRICE D’INFORMATIONS A

INTERGEANGER

DATE DE LA MISE EN CIRCULATION DU CERTIFICAT CIRGL/ RDC

Lancé le 24 juillet 2013 à Kinshasa, le certificat CIRGL RDC sera mis en circulation le 30 septembre 2013 à Kalemie, dans le site Mai-baridi dans la Province du Katanga et 15 octobre à Bukavu, pour le compte du site de Nyabibwe dans la province du Sud-Kivu.

Les autres sites seront couverts de manière progressive.

Pour ce faire:

- le CEEC mettra en place son équipe de suivi et devra centraliser les données statistiques internes afin de répondre à la demande de la base des données CIRGL située à Bujumbura.

En résumé, la République Démocratique du Congo soutient que le mécanisme de certification et de suivi des minerais de la CIRGL ne sera crédible que si tous les Etats membres mettent en place :

-Des procédures de systèmes crédibles d’audit des sites miniers destinés à confirmer que ces derniers répondent aux normes et critères du Manuel de certification de la CIRGL ;

-Des procédures de publication des données statistiques nationales de production et d’exportation afin d’alimenter la base des données régionales de suivi des minerais;

-Des systèmes d’alerte rapide pour lutter contre la fraude transfrontalière ;

- Des procédures de transparence et de bonne gouvernance dans la gestion du secteur minier en vue d’éliminer les minerais dits « minerais de conflit » dans la chaine de possession des minerais (Chaine d’exploitation, d’approvisionnement et de commercialisation) des Etats membres.

En conséquence, dès la mise en circulation du premier certificat aucun lot des minerais de 3T et de l’or ne sera exporté s’il n’est pas accompagné du certificat CIRGL/ RDC délivré par les Autorités de certification de la RDC, en l’occurrence le Ministre des Mines et le Directeur Général du CEEEC ou leurs délégués dûment mandatés.

La République Démocratique du Congo entend répondre ainsi aux exigences des fonderies appliquant le programme CFS (Conflit Free Smelter) et aux utilisateur finaux des industries électroniques et automobiles- que vous-êtes- en certifiant la provenance de nos minerais selon les standards internationaux et régionaux.

MERCI POUR VOTRE ATTENTION

Status of the implementation of the Regional Initiative against the Illegal Exploitation of Natural Resources in

the Great Lakes Region

12th Conflict-Free Sourcing Initiative Workshop

Arlington(USA) 10th September 2013

by Silas Sinyigaya

Democracy and Good Governance Program Officer

ICGLR

Mandate of the ICGLR • Promote and strengthen in each Member State,

the development of effective mechanisms to eradicate the illegal exploitation and trade of RN;

• Revitalize and strengthen cooperation and transparency between Member States in the fight against the illegal exploitation of natural resources;

• Promote harmonization, by Member States, of their national laws and procedures, policies and procedures against illegal exploitation and trade.

Role of Conference Secretariat

• Serve as a platform for political and technical exchange;

• Develop transparency tools for the mining sector;

• Facilitate the adoption of these tools by the Member States;

• Support Member States in the implementation of the tools ;

• To monitor the implementation of the Initiative and evaluate it;

Declaration of Summit of Heads of State held in Lusaka(2010)

• Recognition problems arising from the illegal exploitation of NR;

• Reaffirming the responsibility and commitment of States in the region to solve the problems together;

• Approval of the six tools developed by the ICGLR and commitment to implement them in their respective States;

• Appeal to the International Community to support the Initiative;

• Ask the International Community to ensure due diligence (OECD) in mineral supply.

Implementation of the six tools 1. Certification.

• Certification scheme developed;

• Regional audit committee established;

• Audit Committee support service established;

• Independent Mineral Chain Auditor being put in place;

• Advanced mineral traceability in DRC and Rwanda;

• Evaluation of chains of custody underway in Rwanda (towards the regional certificate delivery)

• Self-financing mechanism for the regional certification developed;

• AFP: MOU signed with SEAMIC (Dar es Salaam) for the Analytical Fingerprint;

• Training Rwandan and Burundian laboratory technicians BGR (Hannover) and training of Congolese technicians being planned;

• Equipment for AFP lab already available ;

• Recruitment of four employees of the AFP Management Unit.

Launching of the ICGLR Certificate in DRC

•On 24 July 2014, the ICGLR has launched the Regional certificate in the DRC; •Rwanda is planning to launch its certificate in the near future; •O ther countries are advancing in the process

Accreditation of Third Party Auditors

•The ICGLR Audit Committee is developping an audit template to be used by Third party Auditors; •A meeting where the template will be approved is planned on 14-16 October 2013 in Nairobi; •The accrediation of the Auditors will follow without further delay.

2. Harmonization of national legislations

• Comparative analysis of legislations in the 12 States of the GLR done (2010);

• Development of a model law for the domestication of the Protocol on NR and harmonization of the model law with due diligence by the OECD (2011);

• Approval of a final version of the Model Law to serve as reference for the domestication of the Protocol by the Member States (2012).

3.Whistleblowing • Purpose: capitalization of fresh and direct

information on the phenomenon of illegal exploitation and frade of NR;

• Appropriate research recommended to start the implementation of the tool in a pilot phase focusing on the North and South Kivu. ICGLR also examine the possibility of extending this pilot phase also to Burundi;

• Mechanism: submit an anonymous report via SMS or website without the possibility of knowing the identity of the person or the place where it is located.

• Training and awareness raising have been conducted in the DRC;

• A response team of the ICGLR is based at its headquarters. It will analyzes the complaint and give a recommendation for appropriate action;

• If the team finds the complaint is verified, the response will be sent to the competent authorities of the relevant Member State

4.Initiative for the Extractive Industries Transparency Initiative (EITI)

• This initiative is undergoing reform.

• When this reform is complete, the Conference Secretariat will organize a meeting to launch the regional platform.

• Five states in the region are parties to the initiative and at least two other countries have expressed interest in joining.

5. Formalization of artisanal mining

Meaning:

Strictly speaking, "formalization" refers to giving access to the artisanal miners a mining title.

Within the meaning of the ICGLR and its partners, formalization means "working progressively towards a situation where artisanal miners can successfully and responsibly participate in the certification process in a transparent and credible manner.

• The formalization of artisanal mining is an idea that is realized in the long term, to the point that there are many challenges in the world. It is a very complex process in itself.

• To our knowledge, the experience of FECOMIRWA(Rwanda) is interesting . It is the largest organization of cooperatives in Rwanda, and has already established structures that allow small-scale miners to be formalized in the sense that their activities are legal and formal.

• In June 2012, the ICGLR facilitated an exchange visit of artisanal miners from Burundi in Rwanda, which is an inspiration to Burundian artisans to formalize their sector in their country.

• In Rwanda, there is already a draft version of the new mining law that aims to better formalize the sector.

Documentation

• Flow of valuable minerals recorded and sent to the ICGLR (regional database)

• Member States shall send the data, and there is a focal point by country;

• Looking for means to recruit staff to work on the database at the headquarters of the ICGLR.

Thank you for your attention !!

Update CTC (Certified Trading Chains)

12th CSFI Workshop

Washington, September 10th 2013 | Uwe Naeher, BGR

BGR Support to Mineral Certification in the GLR

Rwanda

CTC mineral certification

pilot project

2008-2011

DRC Rwanda Burundi

AFP

RCM

DR Congo

BGR module:

National certification system

for the 3T minerals and gold

2009-2013 (phase 1)

ICGLR

BGR module:

Support to the Regional

Certification System

2011-2015

transparency

labor &

working

conditions

security community

development environment

origin, volume

fiscal obligations

legality

traceability

salary level

child labour

workers

organization

protective &

production

means

health &

safety

training

risk assessment

capacity structured

dialogue

local business

integrated

support

free, prior

Informed

consent

Gender, migration

EIA

waste disposal

provision for

rehabilitation

5 p

rin

cip

les

21 s

tan

dard

s Certified Trading Chain (CTC) Standards

Standards harmonized with National Laws, OECD, ISO. Verified by audits

Conflict free

Developments 2008-2013

RWA:

1. Phase: CTC Pilot Project in Rwanda (2008-2011)

- Implementation in 5 Mines, 3 certified as of 2011;

2. Phase : BGR support for the implementation of the RCM in Rwanda and Burundi, - -

introduction( of AFP concept within GLR (2011-2015)

DRC

1. Phase CTC DRC (2009-2013):

- CTC Manuals produced (3T & Au), included in DRC Legislation;

- Implementation in pilot sites (2 certified June 2013, 3 to follow)

2. Phase DRC (2013 - 2016:

- Large scale implementation of CTC, support to RCM implementation

- Test CTC application in CU, Co and Dia mines

ICGLR

2010-2011 Harmonization of CTC Standards with RCM

CTC Certification - GLR

Mineral / Metal Supply Chain Initiatives

CTC

Audits

• bottom-up from mine site; typical duration = 1 week

• on-the-ground assessment: site inspections, interviews, documentation

• verification & cross referencing of evidence; plausibility checks; AFP

Key Differences:

• mine site focus, national standards

• certificate refers to mine sites - bottom-up audit

• - 3rd party audit • mines: 20 (21) standards • Only pilot mines and

significant producers • objective: responsible

mining practice – improvement dimension – incl. due diligence

elements

• integrated scheme, regional standard – incl. mines, CoC, exporters

• certificate refers to export containers – top-down audit

• mines: 35 standards – CTC as progress criteria

• objective: supply chain due diligence – global market access – incl. mining practice monitoring

• mine site focus,

• No certificate - Not an audit!

• 3 criteria

• All Mines in E-DRC • objective: -

Qualification of MS as - conflict free, - no child labor, - no grave human rights

abuses

Validation Missions

CTC audits

ICGLR RCM

CTC Pilot Mines (as of 04.2013)

Lulingu

Luntukulu

Bibatama

Kalimbi

Mayi Baridi

3rd Party Auditor

Mine Owners/ Cooperatives/ FEC

2 observers from COCERTI (Kinshasa)

1-2 observers Civil Society BGR

2 SAESSCAM 1 - 2 observers from Provincial Mining Division

CTC Audit Teams, DRC

Important: Multistakeholder approach, credibility, access to information, plausibility checks of available information (whistle-blowing ICGLR-GIZ)

CTC Audits in DRC

Location Baseline Compliance

Nyabibwe, S-Kivu September 2011 February 2013

Mayi Baridi, Katanga February 2012 January 2013

Bibatama MHI, N-Kivu February 2012 Planned for November

2012, postponed due to

M23 and insecurity in N-

Kivu

Lulingu, S-Kivu Octobre 2012 ?

Luntukulu, S-Kivu Octobre 2012 ?

Next Steps CTC:

Location Baseline Compliance

Bibatama MHI, N-Kivu February 2012 Q3 2013

Lulingu, S-Kivu October 2012 Q3 2013

Luntukulu, S-Kivu October 2012 Q3 2013

Audits in already selected sites in South and North Kivu, plus sites in

Maniema and Katanga;

Audits to be extended to Au producing sites in P.Orientale, Maniema,

N.Kivu, S.Kivu & Katanga

Training and accreditation of Auditors, capacity building of COCERTI.

ICGLR and CEEC

Province Green Yellow Red Total

South Kivu 14 14 5 33

North Kivu 11 0 0 11

Maniema 28 1 0 29

Validation Missions:

Missions Conjointes:

Joint validation missions with UN, Government, Industry, Civil Soc., Police:

Focus on:

- Control, illegal taxation by military and armed groups;

- Human rights, Situation of women

- Child labour

Rating: Green (conformity, yellow (deficiencies, 6 months to fix), red (not

acceptable) (after OECD DD Guidelines and ICGLR RCM)

MONUSCO plus:

Title/Mine Owners

FEC Civil Society

BGR SAESSCAM Provincial Mining Division

Validation Missions, DRC

Important: Basde on TdR, Multistakeholder approach, credibility, access to information, fast deployment. NOT an Audit

ITSCI

Mining Police

CAMI OIM

Next Steps Validation Missions:

Missions in Maniema & Katanga (North to South w Focus on Major

Producers);

South Kivu (Major Producers, Where safe!);

North Kivu (where safety permits!!!

OBSTACLES:

- Funding

- Priority

- HR

Challenges:

Dynamic Security Situation;

Infrastructure and access;

Legal situation, title issues, formalisation;

Long Term Securisation of financing of CTC audits and VM,

sustainability;

Communication and dissemination;

Harmonisation of main schemes and initiatives (checklist, audits) in

the region;

THANK YOU

E-Mail: uwe.naeher@bgr.de

Web: www.bgr.bund.de/mineral-certification

Conflict Free Sourcing Initiative Workshop

118

Conflict Minerals Certification and

Traceability Program Updates:

Public Private Alliance for

Responsible Minerals Trade

Direct Sourcing Pilots and Programs

CFSI Workshop

September 10, 2013

Public-Private Alliance for Responsible Minerals Trade

Eileen Kane, U.S. Department of State

A multi-sector and multi-stakeholder initiative to support supply chain solutions to conflict minerals challenges in the Great Lakes Region of Central Africa.

What is the PPA?

Lake Kivu (photo provided by CFTI)

120

Provides funding and coordination support to organizations working in the region to

develop verifiable conflict-free supply chains;

align chain-of-custody programs and practices;

encourage responsible sourcing from the region;

promote transparency;

bolster capacity of in-region civil society and governmental representatives

What is the PPA? 121

PPA Participants (August 2013)

NGOs (“Other Orgs”) (14) Africa Faith and Justice

Network B.E.S.T. CENADEP DDI Enough Project Global Witness IOM IPIS Jewish World Watch Pact Partnership Africa Canada RESOLVE Responsible Sourcing Ntwk World Vision (unofficial)

Governments (3) US Dept. of State USAID ICGLR

End-users (26) Acer Advanced Micro Devices Apple AT&T Blackberry Boeing Dell, Inc. Ford Motor Company General Electric Global Advanced Metals H.C. Starck HP Intel

Microsoft Motorola Solutions Nokia NVIDIA PAMP Panasonic Qualcomm Sony Corporation Sprint Telefonica Toshiba Toyota Verizon

122

Industry Associations (4 representing >100 members) Electronics Industry Citizenship Coalition Global e-Sustainability Initiative International Tin Supply Chain Initiative World Gold Council

December 2010: PPA idea conceived when USG, civil society, industry met and agreed to create a mechanism for all stakeholders to work together to improve conditions in the GLR

October 2011: Initial announcement by senior USG, DRC, & International Conference of the Great Lakes Region officials

15-16 Nov. 2011: PPA launch event in Washington, DC and first PPA meeting

December 2012: Initiated programming in DRC; Meeting with Under Secretary Hormats

June 2013: Hill briefing and 2nd full PPA meeting; 2nd RfP released

July 2013: 15 new members announced

PPA History/Timeline 123

Joint funding pool ($1,177,000 to date) and 47 members

Funded 2 on-the ground projects; soon to fund others

Established tripartite governance structure

2 Hill briefings and 2 full PPA meetings to promote and plan activities

PPA Accomplishments 124

Artisanal gold miners near Mangi (north of Kinsangani). Photo credit: Joanne Lebert.

Convened 3 sessions with ICGLR, Member States, in-region implementers to promote alignment of chain-of-custody systems (audits, data, mine site inspections)

Developed and launched PPA website

Met key partners and actors in-region

USAID $3.5 million in parallel funding for infrastructure and traceability

PPA Accomplishments, cont’d 125

Artisanal miner removing the overburden to reach ore-bearing

layers. Photo credit: Joanne Lebert.

CENADEP (Congolese NGO) will support civil society capacity to monitor transparency, implementation of an early warning system, and accountability of the mining sector in South Kivu province of the DRC

Work commencing autumn 2013

Funded Projects/Status 126

CENADEP

CENTRE NATIONAL D’APPUI AU

DEVELOPPEMENT

ET A LA PARTICIPATION

POPULAIRE

Partnership Africa Canada and Diamond Development Initiative completed site selection analysis; collected information from miners to create database to support registration.

Funded Projects/Status 127

Photo credit: Joanne Lebert

Orientale Provice Exploration Licenses (red) and Mining Licences (turquoise) - (Source: CAMI)

PAC will next work to support mechanization and establish a traceable conflict-free mineral chain for artisanal gold from 1-2 sites in the Orientale province in the DRC.

Funded Projects/Status 128

Photo credit: Shawn Blore

Additional fundraising for second call for proposals and projects in the Great Lakes Region

Support alignment of systems implemented in the GLR

Communications on responsible sourcing and PPA activities/funded projects

Bolster website to be an information resource

Year 2 Priorities/Activities 129

PPA Participant Benefits

Local residents meeting Solutions for Hope delegation at the Mai Baridi mine, Jan 2012.

130

Provides vetted, safe, and efficient funding channel channel to support development and research projects in the GLR

Serves as platform to inform, manage, and leverage funding priorities by combining resources

Provides a multi-stakeholder and multi-sector community of peers to share challenges, solutions, and interests

Allows end users to communicate, demonstrate, and reinforce commitment to conflict-free mineral sourcing

Supports in-region systems alignment, especially mine site inspections, audits, and data management

A forum for downstream companies to provide input to others in the supply chain and implementers in the region, and vice versa

PPA Participant Benefits 131

1. Complete Expression of Intent (on PPA website) and Return to RESOLVE

2. Due Diligence review by USG

3. Review and sign MOU

4. Contribute pledged funds, if applicable

How to Join 132

Solutions for Hope: Raw material received at MMR depot in Kalemie prior to initial processing, Jan 2012

Website: http://www.resolv.org/site-ppa/

Contact Information: ppainfo@resolv.org

We are pleased at the progress made by the PPA . . . It is particularly notable to see leading U.S. and international companies contributing their human, financial, and other resources and demonstrating that the best response business can make to the concern about conflict minerals is to invest in long-term solutions in the region. Robert Hormats, Under Secretary for Economic Growth, Energy, and the Environment; U.S. Department of State

133

“

Responsible production and trading of minerals improves livelihoods and the PPA has demonstrated that the public and private sectors can work together to encourage such behavior. Terry Heymann, World Gold Council

134

The PPA grant will enable us to continue our mission to reinforce integration of civil society actors in the work for conflict free mineral trade in the Great Lakes Region. Together we will have the opportunity to tackle these problems. Aussi, quelque soit la longueur de la nuit, le soleil finit par poindre.

Cyprien Birhingingwa Mugabo of CENADEP

For more information, please contact the PPA Facilitator: Jen Peyser, RESOLVE jpeyser@resolv.org or ppainfo@resolv.org

Direct Sourcing Pilots and Programs Solutions for Hope (SfH)

Conflict-Free Tin Initiative (CFTI)

Conflict Free and Socially Sustainable September 10, 2013

Bill Millman, AVX

Mike Loch, Motorola Solutions Inc.

Richard Robinson, USAID

Solutions for Hope Project Issue: Due to DF Act millions of people and their livelihoods have been threatened by the de facto embargo. Action: In July of 2011 the Solutions for Hope Project was launched as a pilot initiative to source conflict-free tantalum from the DRC to be used in AVX, Motorola Solutions products. Solution: We worked with a defined set of suppliers to create a closed-pipe supply line.

PAGE 138

The ‘Comptoir’ Supply Chain Model

NEGOTIANT

NEGOTIANT

COMPTOIR

NEGOTIANT

COMPTOIR

INT

TR

AD

ER

S

SM

ELT

ER

S

MA

UN

FA

CT

UR

ES

OE

M

Typical Artisanal Mining Supply Chain

Creuseur

Creuseur

Creuseur

Creuseur

Creuseur

preneurs

preneurs

preneurs

MMR** AVX/SMELTER AVX Motorola Solutions MINE*

MINING IS CONDUCTED UNDER

CONCESSION FROM MMR.

CUSTOMER HAS A TRANSPARENT

TRACEABLE SUPPLY CHAIN

AVX TAKE OWNERSHIP OF MATERIAL

DIRECTLY FROM MMR

The “Closed Pipe” Solutions For Hope pilot in the DRC

provides a Secure Chain of Custody that Meets OECD DD

Guidance

* The diggers sell through their cooperative CDMC ** Mining Mineral Resources

AVX buys the ore at world market prices –

• Secure chain of custody, traceability, monitoring, independent

audit

• More value remaining in region, governmental taxes paid

• Reinvestment – safety, mining equipment & technology, facilities

• Social benefits program built in by partner contract

• Building technical capacity on the ground

• Engagement by the end consumers from the start

‘Closed Pipe’ Supply Chain

Solutions for Hope Project • The pilot project supports and is

supported by several implementing Initiatives: – ICGLR Regional Certification; – Traceability program by iTSCi; – Certification of mines by BGR

• Certified Trading Chain; – Due diligence guidance and implementation by the OECD and the UN

Group of Experts; – Conflict-Free Smelter (CFS) program; and – Conflict-Free Reporting Template

• Creates an initial flow of tantalum that helps enable miners to work

and conflict-free systems to be developed in the DRC. • New business model leveraging vertical integration and community

re-investment that creates an initial flow of tantalum that helps enable miners to work and conflict-free systems to be developed in the DRC.

Solutions for Hope Project Results and Participants

Participating Companies

• AVX

• Coopérative Des Artisanaux Miniers du Congo (CDMC)

• F&X

• Flextronics

• Foxconn

• Global Advanced Mining (GAM)

• HP

• Intel

• Mining Minerals Resources (MMR)

• Motorola Mobility

• Motorola Solutions

• Nokia

• Research In Motion (RIM)

• Robert Bosch GmbH

Results

•Over 165 metric tonnes mined

•DRC Green Mine Site- MaiBaridi/Luba

•Targeted for first ICGLR Certificate

•Pilot demonstrated Credible,

Sustainable and Expandable Program

Well received by Media, Governments and NGOs.

•Coverage includes: Bloomberg, New York Times, Business Week, GreenBizz, Mission Critical Communications, TMCnet, Asia Metals, Afrique Expansion, Radio France, Bloomberg Business Week, MMTA and the Enough Project, GAO Reports

• Tweets include: Senator Durbin, RAISE Hope for Congo

• Speech by Ambassador Barrie Walkley, Apr 12 2012 Philadelphia, EICC/GeSI Work Shop

•Highlighted by the U.S. Department of Labor’s Bureau of International Labor Affairs (ILAB) as part of their new online tool to help businesses manage issues in their operations and supply chains.

Solutions for Hope

Conflict Free Tin Initiative (CFTI) Enabling responsible sourcing from the DRC

• CFTI is a public-private initiative to source conflict free tin from South Kivu, eastern Congo

• Participants: Dutch Ministry, Industry, NGOs • Goal: initiating a tightly controlled, verifiable

conflict free tin supply chain from mine to end-users

• Success of this initiative will lead to: – More legitimate mining – Increased employment for artisanal miners – Economic development and stability – Greater security of supply for industry

• Timeline: – Oct 2012: first mineral bags left the mine site – Dec 2012: minerals exported to Malaysia Smelting Corporation – Mid 2013: first refined tin sent to solder manufacturers

Tin Closed Pipe Supply Chain

HRH Jamie de Bourbon Parme,

Dutch Ministry of Foreign Affairs

Conflict-Free Tin Initiative

• The Conflict-Free Tin Initiative introduces a tightly controlled conflict-free supply chain outside the control of the armed groups. It offers a first step towards renewed economic activity and hope to the masses of unemployed miners. Currently, the infrastructure is being put in place in the DRC for this pilot to be able to start.

• So far Royal Philips Electronics, Tata Steel, Motorola Solutions, Blackberry, HP, Nokia, Alpha, AIM Metals & Alloys, Malaysia Smelting Corporation Berhad (MSC), Traxys and ITRI are committed to participate in the Conflict-Free Tin Initiative. The Initiative welcomes all companies, including mines, smelters, component manufacturers and product manufacturers (end-users) to join, and its success will be largely measured by the industry participation in the closed-pipe supply system.

Conflict Free and Socially Sustainable

Lessons Learned • Long term investment – not ‘aid’, move to semi-industrialization • Need initial investment to kick-start program • Avoid dependency culture from developing, building local capacity • Engagement linked to good practices • Self enforcement at the in-region local and regional levels • Sustainability – long term planning & development, levy structure • Encourage enlightened self interest – not donor cheque to donor cheque

• Features of a true sustainable closed pipe

– Purchase at world market prices for maximum local re-investment potential – All materials available should be purchased – End customers have a direct engagement – specific participation – High level of transparency – Engagement dependant of good practices, mechanisms institutionalized – It is - Reliable, sustainable, expandable

Solutions for Hope Project

Next Steps:

• Continue to solicit participation of other actors

• Expand the program to include other mines

• Expand SfH model to other minerals (gold is next), using Solutions Network platform (www.solutions-network.org). See results from recent gold pilot planning session at RESOLVE.

Thank you!

Questions?