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On July 23, 2013, the D.C. District Court upheld the Security and Exchange Commission's (SEC) final rule on conflict minerals reporting, disappointing many companies that had postponed preparations and now must sprint to achieve compliance. Contrary to fears, however, these late-movers may not be far behind their more proactive peers, some of whom have been monitoring Dodd-Frank Act, Section 1502, since prior to the Conflict Minerals Rule's final release in August 2012. By leveraging proven tools and processes, filers can still get their conflict minerals compliance programs on-track in time to file by the May 31, 2014, deadline.

Grossly simplified, the Rule requires SEC "issuers" (i.e., publicly-traded companies) to disclose the presence of any "conflict minerals" (tin, tungsten, tantalum or gold) in their manufactured products and identify whether or not these substances originated from the Democratic Republic of the Congo or an adjoining country. Even overlooking the Rule's many nuances, compliance efforts can quickly escalate into an intensive supply chain due diligence project, requiring a cross-functional team drawn from legal, procurement, finance, CSR and other departments. 


CONFLICT MINERALS COMPLIANCE: A SURVIVAL GUIDE FOR LATE MOVERS
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MANUFACTURING INDUSTRY NEWS
a Global Midwest Alliance Publication
Winter 2014
Build a Dedicated Team
Partial measures are the antithesis of due diligence, given the potential for intense customer, SEC or NGO scrutiny. Assigning CM compliance to one person, or even a single silo (e.g., procurement), is not a recipe for success. Consider training in-house personnel across an assortment of processes and tools, or engaging an outside CM consultant. If a company wishes to develop CM competencies, a wealth of guidance is available online and through industry groups. The services of consulting, legal and auditing firms also come in a range of capabilities and price points, including both turnkey and a la carte solutions. Assess available resources, current progress and compliance drivers to determine the most expedient option for RY2013.

For Smart Compliance, Get Informed
Open-ended explorations of marginal strategic approaches will have to wait -- the quickest viable route to compliance represents the dominant strategy for 2013. Fortunately, early-movers have already defined much of the CM landscape, and compliance objectives are easier than ever to both develop and prioritize. In fact, non-SEC compliance drivers tend to self-identify through customer data requests, NGO surveys, outreach from external auditors or other stakeholder communications.

Combine these drivers with now-established standards and interpretations to confine the scope of your first year compliance efforts. The virtual consensus surrounding the Rule's "Reasonable Country of Origin Inquiry" (RCOI) requirement illustrates the importance of familiarity with the prevailing interpretations. SEC declined to define the term, "reasonable," leading most industries to conclude that tracing CMs to the smelter -- rather than to the mine -- of origin represents a reasonable compliance effort for initial reporting years. Conversely, trying to skirt the Rule too closely may result not just in compliance failures, but in redundant effort, as well. For instance, some customers are requiring their supply chains to report the presence of CMs, regardless of relevant exclusions in the Rule (e.g., recycled CMs) or RCOI findings outside the covered countries. Ultimately, suppliers must respond according to their customers' interpretation of the Rule, not their own.

These and other de facto guidelines have developed organically since the Rule was in draft, so gaining competency will be more challenging than with other aspects of compliance. Your company's legal counsel or internal auditor may be able to advise whether internal capabilities are sufficient, or whether retaining the expertise of outside services would provide good value. Now is also the time to evaluate potential related efforts needed for complying with similar legislation in the EU and other jurisdictions.

Leverage Technology
For companies with complex supply chains it is likely too late to conduct CM due diligence manually. Fortunately, there are many software platforms and tools on the market specifically developed to automate labor-intensive processes, like sending, responding to and documenting requests for CM data. The platforms exist at a range of price points and capabilities, but the first step in selecting a platform is to determine whether your industry has already adopted a particular IT solution. If not, consider a platform that will be compatible with the platforms of downstream customers while remaining accessible to smaller, upstream suppliers. A platform's native compatibility with the EICC/GeSI template (presently free) is preferable.

With a concerted effort and early adherence to these best practices, even companies that have only recently embarked on their CM journey can achieve compliance with stakeholder expectations.

About Tetra Tech
Tetra Tech is a leading provider of consulting, engineering, program management, construction management, and technical services. The Company supports government and commercial clients by providing innovative solutions to complex problems focused on water, environment, energy, infrastructure, and natural resources. With more than 14,000 staff worldwide, Tetra Tech's capabilities span the entire project life cycle. This article was provided by Tetra Tech's Conflict Minerals Practice. If you have any questions or would like to discuss your compliance plan, please email conflictminerals@tetratech.com.

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Conflict minerals (CM) are ubiquitous (e.g., tin is found in electrical solder), bringing many companies into scope: An estimated 6,000 issuers and their 275,000 suppliers will be affected. Privately-held suppliers are not regulated by the SEC, but the Rule's due diligence standard requires their issuer-customers to trace the origins of CMs through the supply chain. Thus, "compliance" for suppliers consists of meeting customer expectations for support.

QUICKLY RAMPING UP CONFLICT MINERALS COMPLIANCE
The compliance roadmap has not greatly changed since the Rule's release, but now there are tools, processes and services available to help companies travel a more direct route. Use the following guidance to avoid the iterative learning process endured by early-movers and to efficiently get on-track:
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Advanced Manufacturing: What Is It and How Will It Affect My Business? 

April 24, 2014
7:30 a.m. - 10:30 a.m.  

TMA
1177 South Dee Road
Park Ridge, IL 60068 

Join us at TMA headquarters on April 24 as the Alliance hosts its annual manufacturing industry program for a three-part discussion on innovation, growth and globalization in the advanced manufacturing sector. This year's keynote speaker will discuss the new opportunities and economic benefits that advanced manufacturing is providing in the Midwest and globally. 

Hear from our Innovation Panel, comprised of industry experts and insiders, who will host a discussion on recent advancements in technology that are increasing U.S. manufacturing competitiveness in the global marketplace. Finally, the Growth and Global Opportunities Panel, which will be comprised of leaders in the manufacturing industry, will review and discuss the case for manufacturing exports and how advanced manufacturers can lead the charge in the economic recovery. 

Manufacturers will have the opportunity to learn how advanced manufacturing can be used to change both the local and global landscape, as well as network with industry leaders, corporate executives, government officials and advanced manufacturers. Registration coming soon. 

Global Midwest Alliance is a business-led, region-wide organization dedicated to transforming the Midwest into an internationally recognized leader in innovation and business growth. The Alliance aligns and integrates resources throughout the Midwest helping businesses to grow by leveraging existing resources to develop new products and find customers throughout the world. The Alliance is the Private Sector Liaison Office for the World Bank and a member of Global CONNECT. Through these and other affiliations, the Alliance facilitates access to global business opportunities for Midwest business. The Alliance offers educational and networking opportunities through a variety of programs and resources designed to promote innovation, technology development and access to global opportunities in the clean technology, energy, food, logistics, manufacturing and water industries.



The Private Sector Liaison Office (PSLO) Network of the World Bank Group is a group of 156 business intermediary organizations in 106 countries around the world working to foster trade and investment between countries with the support of the World Bank Group's products and services. PSLOs facilitate companies' access to World Bank Group business opportunities, services and knowledge, and act as the voice of the private sector in advising the World Bank Group on how to better engage companies on development issues.he Private Sector Liaison Office (PSLO) Network of the World Bank Group is a group of 156 business intermediary organizations in 106 countries around the world working to foster trade and investment between countries with the support of the World Bank Group's products and services. PSLOs facilitate companies' access to World Bank Group business opportunities, services and knowledge, and act as the voice of the private sector in advising the World Bank Group on how to better engage companies on development issues.

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