On 17 May 2017 an agreement was reached on European Regulation (EU) 2017/821 that imposes certain due diligence obligations on upstream companies and on importers of tin, tantalum, tungsten and gold. This Regulation must also end the financing of armed conflicts and rebel groups by trading in conflict minerals.
The Regulation builds on the OECD Guidelines on the subject that are the international standard in this area and will have to be applied by companies from 1 January 2021.
Who is concerned: Upstream & downstream
The Regulation published on 19 May 2017 contains mandatory regulations for smelters and refineries (upstream sectors) and importers of tin (Sn), tantalum (Ta), tungsten (W) and gold (Au) (as mineral but also in their metallic forms). They will have to ensure, through due diligence, that they are supplied through responsible channels where their suppliers do not contribute to financing armed conflicts or other illegal activities. Annex I to the Regulation contains a specific list of the goods and threshold quantities subject to compulsory due diligence. There is an exemption for recycled materials.
There are no obligations for the downstream sectors. Nevertheless, the downstream sectors are encouraged to carry out due diligence on a voluntary basis:
- First and foremost, the degree to which downstream sectors perform due diligence will be taken into account when evaluating the application of the Regulation.
- The European Commission is working on a database in which companies can voluntarily register and briefly report on due diligence measures.
A list of responsible smelters and refineries will be elaborated. These smelters and refineries can be located both inside and outside the EU. This white list should help companies to make the right choices and do due diligence themselves.
The European Commission has developed guidelines to help large companies of public interest with mandatory reporting of non-financial sustainability information in their annual report. Within these guidelines, a number of key performance indicators are included that relate to the due diligence on conflict minerals.
Conclusion
Lift companies are downstream companies, not smelters nor refineries (upstream sectors) nor importers of tin (Sn), tantalum (Ta), tungsten (W) and gold (Au) as mineral or in their metallic forms, so they are not directly obliged parties, but are encouraged to put in place a responsible supply chain management policy. This could, for instance, be achieved through setting up a due diligence system proving that neither themselves nor their suppliers are using resources containing conflict minerals.
© Copyright 2018 ELA - All Rights reserved.
Disclaimer: The present information note reflects the best knowledge of ELA experts at the moment of its publication. It is for general information purposes only, is not legally binding and should not be construed as legal advice. It is also not intended as a substitute for each stakeholder's own assessment and decision making. ELA declines any and all liability both for the content and for any measure taken or not taken on the basis of this information note.