Conflict Free Sourcing Initiative (CFSI)
Program Update
[SIO Conference, Vancouver]
John Plyler
BlackBerry
CFSI Workgroup
18 June 2013
1
CFSI Conflict-Free Sourcing Approach
Finished
Product
MINE
SMELTER/REFINERY
OEMS
In-Region Programs
Conflict-Free Smelter Program (CFS)
Company Assurance
2
CFSI Conflict-Free Sourcing Approach
Finished
Product
MINE
SMELTER/REFINERY
OEMS
In-Region Programs
Conflict-Free Smelter Program (CFS)
Company Assurance
3
In-Region Programs
• Public-Private Alliance (PPA)
– Established by US State Department and USAID
– Mission: The development of traceability, validation, and due
diligence schemes for minerals sourced in from the DRC and
adjoining countries.
– $5.2 Million total expected public/private funding (~$1M already
donated by industry)
http://www.resolv.org/site-ppa/
• iTSCi (Bag-Tag scheme in SE DRC/Rwanda currently)
– iTSCi scheme is the first in-region mineral tracing initiative
– Developed by Tin/Tantalum Industries; aligned with CFS
– Three CFS compliant smelters receiving iTSCi material thus far,
as well as a few other smelters not yet CFS compliant
4
In-Region Programs
• Solutions for Hope Project
– 1st demo of a verifiably conflict-free, in-region sourcing model
– Tantalum ore sourced from Southern DRC
– Initial material segregated, once proof of concept achieved,
material has become standard part of material flow for
component manufacturer’s supply chain
http://solutions-network.org/site-solutionsforhope/
• Conflict-Free Tin Initiative
– Dutch Government Supported Initiative kicked-off mid-2012
– 1st demo of verifiably conflict-free material from Northern DRC
http://solutions-network.org/site-cfti/
5
CFSI Conflict-Free Sourcing Approach
Finished
Product
MINE
SMELTER/REFINERY
OEMS
In-Region Programs
Conflict-Free Smelter Program (CFS)
Company Assurance
6
Conflict-Free Smelter (CFS)
Program
CFSI has spearheaded the development of a multi-stakeholder
assessment process to verify that smelters/refiners are sourcing conflictfree minerals.
Why: Provide a mechanism that enables and encourages responsible
sourcing of tantalum, tin, gold, tungsten
Schedule: Addressing each metal separately, but concurrently
–Tantalum, tin and gold smelter/refiner assessments are underway; tungsten smelter
assessments are expected to begin in 2013.
–Gold CFS assessment process has been harmonized with Responsible Jewelry Council
and London Bullion Market Association audit processes
Results: A list of smelters/refiners who are compliant with the CFS
assessment protocol is posted on the CFS website:
http://www.conflictfreesmelter.org
** Companies make their own sourcing decisions. **
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Supply Chain Focal Point –
Smelters/Refiners
Raw Materials
Upstream
Why Here?
Conversion of distinguishable starting material
into an indistinguishable product
Small Numbers – tantalum, tin, tungsten and
gold smelter/refiners total less than 500
companies globally
Smelters /
Refiners
Finished Products
Conflict-Free Smelter
(CFS) Program
Downstream
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CFS Audit Focus
Company Mass Balance
- Includes all inventory
- Includes all facilities
Company Program Validation
- Conflict Free Policy
- Conflict Free Sourcing Systems
Sourcing
Processes
Validation
Ore /
Concentrate
Unfinished
Products
Intermediates
Finished
Products
Recycled /
Scrap
Toll Customer
Toll Supplier
Conflict
Free
Policy
9
Audit Protocol Improvements
• 3Ts harmonized protocol released 22 Dec 2012,
effective 28 Feb 2013
–
–
–
–
Improved Level 3 Country requirements
Separation of Audit Procedure and Protocol content
Improvements from stakeholders
Translation to several key smelter languages
• Further improvement underway (May 2013 release)
– Addressing further tin industry concerns (definition, ASM,
secondary materials, slags)
– Improving standardization, readability and clarity
– Recognition of U.S. SEC Rule grandfathering allowances
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CFS Online Program Indicators
http://www.conflictfreesmelter.org/CFSindicators.htm
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CFS Program Indicators Changing
• Plan:
– Indicator reduction:
1.
2.
Number of smelter/refiner companies currently active in
the CFS process (active = signed agreements, audit on
track)
Number of companies with compliant smelters/refiners
– Qualitative program status is provided to stakeholders on a
monthly basis (company names not included)
• Reasoning:
– Previous indicators allow tracking in and out of corrective
action status when Compliant and Active lists compared
– Previous indicators provide no pre-audit details on specific
company and thus no means for smelter engagement
12
Audit Program Improvements
• Further work being undertaken to ensure CFS
Program compliance with ISO Standards
– ISO 19011 and ISO/IEC 17021
• Auditor accreditation program being developed
– Will allow other audit firms to become qualified
– Will allow smelters/refiners to become educated to
content auditors are trained on
13
CFSI Conflict-Free Sourcing Approach
Finished
Product
MINE
SMELTER/REFINERY
OEMS
In-Region Programs
Conflict-Free Smelter Program (CFS)
Company Assurance
14
Company Assurance
Development, integration and maintenance of tools
and processes which support a downstream company’s management
system and risk assessment activities:
– Policy language included in the EICC Code of
Conduct (http://www.eicc.info/eicc_code.shtml )
– Created; maintaining a tool to collect information
about a supplier’s due diligence processes and
sourcing: Conflict Minerals Reporting Template
– Establishing resources and processes to support
data collection and analysis
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Conflict Minerals Reporting Template Flow
1. Sends request to
direct suppliers
Template
User
2. Sends request to
sub-suppliers
Direct
Direct
Suppliers
Direct
Suppliers
Suppliers
4. Direct suppliers
return aggregated
roll up template
Original
User
Direct
Direct
Suppliers
Direct
Suppliers
Suppliers
SubSubSuppliers
SubSuppliers
Suppliers
Smelter
Smelter
Smelters
3. Cascades through supply chain
until smelters identified. Subsuppliers return template to
suppliers.
5. User returns final
aggregated roll up
template
Customer
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Company Assurance Program Updates
• Conflict Minerals Reporting Template & Dashboard
– Revision 2.02 released March 2013; Revision 2.03 in
process
– MRPRO Dashboard (free) improved to accept all 2.xx
versions as well us upgrade Rev.1 templates (available
here)
– Supporting Solution Providers creating database versions
– Reporting template and dashboard tool available at
http://www.conflictfreesmelter.org
– Considering a quarterly update schedule; primary purpose
is revision of the Standard Smelter List; next major release
contingent on IPC Standard
• Online training for CFSI members in process
17
Release 2.02 Noteworthy
Improvements
• Addition of Italian translation (ninth language in
addition to (English, Mandarin, Japanese,
Korean, German, Spanish, Portuguese, French)
• Simplification of “terms of use” language
• Additions / edits to the “Standard Smelter List”
• Addition of “Smelter ID”
• Added more rows for reporting smelters (2500)
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IPC1755 Standard
• EICC and GeSI collaborating with the IPC
(www.ipc.org, “Association Connecting
Electronics Industries”) with the objective to:
– Develop a standard for exchange of data related to
conflict minerals used in manufactured products to
facilitate efficient data exchange across companies,
supply chain levels, and industries
• Not an actual data collection tool – but a set of due diligence
information requirements and “instructions” to allow different
tools to communicate
• IPC facilitating an open ANSI standard process
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IPC Progress and Next Steps
• Work began in November 2012 and continues:
– Committee last met on Feb 21 to resolve comments
received on the Final draft for Industry Review; post
meeting briefings held
– Revising schema; text according to committee decisions
– Circulate Proposed Standard for Ballot in July - August
– Publish final standard in Fall 2013
• Open to engagement by Individual Companies
and Trade organizations
– Contact Fern Abrams: FernAbrams@ipc.org
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Summary
In-region activities are critical to promote
responsible sourcing of materials for
smelters and refineries from the DRC and
surrounding countries
the
CFS Program is a voluntary initiative in which an
independent third party audits smelter and refiner sourcing
activities to demonstrate that all minerals processed
originated from conflict-free sources
Company assurance activities are focused on improving
company capabilities to validate responsible sourcing of
materials by creating common tools and processes
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