The US State Department has issued a statement clarifying its position on due diligence requirements with respect to Section 1502 of the Dodd-Frank Act concerning “conflict minerals”. Final regulations are due to be issued by the Securities and Exchange Commission (SEC) between August and December this year, but in the interim it “specifically endorses the guidance issued by the Organization for Economic Cooperation and Development (OECD) and encourages companies to draw upon this guidance as they establish their due diligence practices”.

In the statement the State Department says that it “holds that it is critical that companies begin now to perform meaningful due diligence with respect to conflict minerals. To this end, companies should begin immediately to structure their supply chain in a productive manner to encourage legitimate, trade, including minerals sourced from the DRC and the Great Lakes region”

It notes how the OECD framework has been endorsed by the UN Security Council and Central African companies grouped in the International Conference of the Great Lakes Region (ICGLR) and advises concerned organisations that “a company may rely on the documented representations of suppliers further upstream, provided that the company has taken the appropriate internal and independent auditing measures and due diligence steps set forth in the five-step framework. Furthermore, we note that, according to the OECD guidance, companies “may coordinate efforts through industry-wide initiatives to…overcome practical challenges and effectively discharge the due diligence recommendations contained in this Guidance”. We recognize implementation of this framework will take time, and will present challenges as many of the mechanisms needed to facilitate transparency for in region sourcing are developed.”