Interview With HP: On Conflict Minerals Supply Chain Challenges

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We recently caught up with Jay Celorie, Global Program Manager at Hewlett-Packard and active participant in the EICC® (Electronic Industry Citizen Coalition) and GeSI® (Global e-Sustainability Initiative), regarding MetalMiner’s white paper, “The Definitive Guide to Conflict Minerals Compliance for Manufacturers.” 

Intro: Sending an Economic Signal Toward Responsible Sourcing

A simple way to think about conflict minerals – and complying with SEC rules – is making sure that your economic signal is directed toward responsible sourcing. The EICC and GeSI organizations have provided a tool (the reporting Template) and a program (the CFS Program) to enable any company to accomplish this task.

From an industry perspective, we are focused on these efforts – the CFS Program, which validates conflict-free smelters, and the common reporting Template – a common data format to identify smelters in a company’s supply chain. Companies need to ask their suppliers to use these to identify their smelters and then ask those smelters to get on the CFS list.

If they are not on the CFS list, they must understand their customers may switch to smelters who are on the CFS list. Within the next few years, we expect to have a critical mass of CFS smelters and refiners for all four metals (tin, tungsten, tantalum and gold) that will enable electronics companies (at a minimum) to confirm they are sourcing conflict-free.

Below, Jay Celorie shared some of his thoughts on some of the key issues around conflict minerals, our paper and various approaches.

On Supplier-Centric vs. Part-Centric Due Diligence Approaches

HP has deployed a supplier-level approach to conflict minerals due diligence, as opposed to a part-level approach, because most companies do not have a material management system that tracks material origin to end product.

A supplier-level approach is also what was supported by the Multi-Stakeholder Group comprising NGOs, sustainable and responsible investors and companies.

There is a slight variation of this approach that allows for segregation between major product categories or divisions. When separate groups of suppliers support a particular product category, those supplier responses can be aggregated to represent the facts and circumstances of that supply chain.

For HP, we can create a ‘bill of suppliers’ for our inkjet printing business, which is unique compared to our server business, as an example.”

The EICC and GeSI Conflict Minerals Reporting Template

“The objective behind creating the Template was to encourage the supply chain to report information in the same way, in order to minimize the burden and to focus on creating the information accurately once.

In the electronics industry, where we have very complex, interrelated supply chains through multiple tiers of suppliers, we wanted to standardize the data exchange format and methodology. Companies in our industry often have many of the same suppliers, and in some cases, suppliers are customers and vice-versa. We wanted to ensure what we developed for suppliers, we would also be able to complete effectively and efficiently [for] our customers.

The MetalMiner white-paper raised a question about which smelters should be listed in the Template. The intent of the list of known smelters is to identify smelters and refiners who are producers of 3TG and who may be sourcing one of the minerals (cassiterite, wolframite, tantalite, and/or gold) directly.

A definition of the 3TG smelters is provided in the Template, and comes from the CFS audit protocols. Some of the smelters and refiners listed are recycling facilities that do not necessarily source minerals, but produce one of the 3TG metals.”

Continued in Part Two here.

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