Addressing conflict minerals as part of our ESG strategy
The EU’s import directive, Conflict Minerals Regulation (2017/821), will go into effect in 2021. It regulates trade in minerals — in particular tin, tantalum, tungsten and gold (3TG) — that have been extracted from mines in politically unstable or conflict-affected areas.
The regulation targets the human rights practices of armed movements that finance their campaigns and their weapons purchases by running mining operations that rely on forced and/or child labor.
Under the EU Conflict Minerals Regulation, EU importers of 3TG minerals must comply with and report on their supply chain due diligence obligations if they import minerals that originate from conflict-affected areas. The EU regulation was inspired in part by the Dodd-Frank Act, a US law regarding transparency and accountability that took effect in 2010. However, it takes a more comprehensive view of conflict mining and trade: while the US law was specific to minerals sourced from the Democratic Republic of Congo and adjoining countries, the EU rule targets all countries exporting 3TG minerals to the EU and does not contain language that limits its impact to specified locations. This extends its impact beyond current conflict areas to countries or regions that may become conflict-affected in the future.
At Oerlikon, we support this regulation and have in fact taken steps that anticipated its concerns. We have instituted a conflict mineral sourcing policy and due diligence measures across our supply chain in accordance with voluntary efforts, such as those advocated by the OECD in its Guidance for Conflict Affected and High Risk Areas as well as US legislation.
We are aware that Oerlikon Metco Materials Business Unit’s suppliers have a history of acquiring conflict minerals in trade from multiple sources worldwide. In keeping with our commitment to corporate responsibility and upholding human rights across all operations, we are seeking to ensure that our suppliers source 3TG minerals exclusively from mines in conflict-free areas. We expect our suppliers to establish and implement policies and due diligence measures that assure they supply us with conflict-free 3TG products and components in compliance with the EICC Code of Conduct and our conflict mineral sourcing policy, which is a part of our Supplier Code of Conduct.
In support of this policy, Oerlikon Metco Materials Business Unit will:
- Exercise due diligence with relevant suppliers consistent with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and encourage our suppliers to do the same with their own suppliers.
- Expect our suppliers to cooperate in providing due diligence information to confirm that the
3TG minerals they are providing are conflict-free. - Collaborate with suppliers and others on industry-wide solutions to ensure products containing
3TG minerals are conflict-free. - Commit to transparency in the implementation of this policy by making reports available on their
progress to relevant stakeholders and the general public.
We are encouraged by the EU’s regulation on the sourcing of 3TG minerals as a mechanism for barring illicit trade and boosting supply chain transparency. We take pride in having enacted our own human rights measures before being required to do so by law and assure our stakeholders and investors that we will continue to integrate ESG factors across our supply chain.
