Most US public companies are failing to adequately check and disclose whether their products contain conflict minerals, according to a report.
Human rights groups Global Witness and Amnesty International’s study, Digging for Transparency, analysed 100 conflict minerals reports filed by companies under the 2010 Dodd Frank Act (Section 1502), known as the conflict minerals law.
Under the law, more than 1,000 US listed companies that believe they may source minerals from central Africa submitted reports to the US Securities and Exchange Commission last year. The law is designed to reduce the risk that the purchase of minerals from the region contributes to conflict or human rights abuses.
In the study, 82 per cent of companies demonstrated they have adopted and committed to a conflict minerals policy. And 62 per cent of companies in the sample demonstrated efforts to go beyond a basic supplier survey, the report said.
However, the companies in the sample are not doing enough to map out the supply chain of the minerals they purchase, the report claimed. Only 16 per cent go beyond their direct suppliers to contact, or attempt to contact, the smelters or refiners that process the minerals, it said.
More than half of companies sampled do not report to senior management when they identify a risk in their supply chain.
Most companies acknowledged their reporting could be improved and provided some information on plans to do so, the report said.
The report said: “Failure to do supply chain checks hampers attempts to clean up the conflict minerals trade. Very few of the reports contained detailed information about the steps companies had taken to source minerals responsibly. This suggests that many of these companies made little effort to understand their supply chains and to take steps to ensure that they are not contributing to harm."
The second set of US corporate conflict mineral reports will be submitted in June.