Overview of the Conflict Minerals Issue
The Democratic Republic of the Congo (“DRC”) is a Central African country with vast mineral wealth,including reserves of cassiterite (tin), columbite-tantalite (aka coltan – source of tantalum), wolframite(tungsten) and gold. For many years, armed groups have fought to control mines within the DRC; those armed groups have been cited for committing violent crimes against locals, including murder, rape and forced labor. Armed groups controlling mines smuggle minerals out of the DRC and the proceeds are used to further finance conflict and perpetuate criminal behavior; hence, cassiterite, coltan, wolframite and gold are considered conflict materials.
The elements tantalum, tin, tungsten and gold are metals used in many manufactured goods across many industries, including the aerospace, appliances, automotive, electronics, jewelry, medical and tool & die industries. About 25% of all tantalum and about 8% of the gold supply is used in electronic and electrical products. Similarly, about 36% of the global tin supply is used in electronic solders. A small portion of the world’s tungsten supply is used in electronic products as counter weights in cell phone vibrator bobs and in the manufacture of integrated circuits.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed into law in July 2010, contains requirements that U.S. companies report to the Securities and Exchange Commission (“SEC”) on the origin of conflict minerals or their derivatives and show due diligence if conflict minerals are sourced from the DRC or an adjoining country. The goal of the act is to cut direct and indirect funding of armed groups engaged in conflict and human rights abuses. The SEC published regulations implementing Dodd-Frank Section 1502 on August 22, 2012; the first reports to the SEC are due May 31, 2014 for the calendar year ending December 31, 2013. If a large company cannot be sure of the origin of its conflict mineral derivatives used in its products during the first two reporting years (four years for smaller companies), it may report that the products are DRC conflict undeterminable. Definitions Related to Conflict Minerals Adopted by RNA
(A) columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives; or (B) any other mineral or its derivatives determined by the Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country. Per the SEC 1502 regulations, conflict minerals are necessary to the functionality or production of a product, but must be contained in the end product in order to be considered a conflict mineral under the rules (so tools used to manufacture parts are not included in the scope of products covered by the SEC regulations).
DRC Conflict Mineral Free
DRC Conflict Mineral Free materials do not contain conflict minerals that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo or an adjoining country. This term also applies to materials determined to be processed from scrap and/or recycled material. Materials that were already incorporated into products or were already within the supply chain as of December 31, 2012 will not be subject to inquiry or reporting rules (The first reporting period covered by the new SEC rules is January 1, 2013 – December 31, 2013).
Armed Group means an armed group that is identified as perpetrators of serious human rights abuses in the annual Country Reports on Human Rights Practices under sections 116(d) and 502B(b) of the Foreign Assistance Act of 1961 (22 U.S.C. 2151n(d) and 2304(b)) relating to the Democratic Republic of the Congo or an adjoining country.
RNA’s Position on Conflict Minerals
Suppliers to RNA must develop policies toward preventing the use of conflict minerals or derivative metals to RNA must document their efforts to determine the source of any conflict minerals or derivatives and provide RNA with evidence of the origin of the metals tantalum, tin, tungsten and gold in products to be supplied to RNA. Any smelters producing tantalum, tin, tungsten or gold metals subsequently used in RNA’s products are requested to seek and obtain certification through the EICC/GeSI Conflict Free Smelter (CFS) program. When there are an adequate number of CFS smelters/refiners available for sourcing, RNA will require sourcing from CFS certified smelters. RNA encourages its suppliers to responsibly source conflict minerals and derivative metals from the Democratic Republic of Congo (DRC) and neighboring countries in order to prevent an embargo and associated worsening of economic conditions and human suffering.
Supplier Code of Conduct
RNA has established and declared its “Supplier Code of Conduct” published in 2013. This Code contains the provision that 'Suppliers shall evaluate the origin or source of their materials throughout their supply chains to verify that that they have not been obtained through any illegal form of mining (e.g., materials obtained from the Democratic Republic of Congo)”. This Code of Conduct contractually binds suppliers to not use conflict minerals.