Two-thirds of respondents to a new survey say their companies are in the early stages or have not yet started compiling information needed to meet the requirements of the Securities and Exchange Commission’s conflict minerals reporting law that takes effect in May 2014.
One-third of the nearly 900 executives surveyed said they still are trying to figure out if the reporting requirement applies to their businesses, according to the survey released Wednesday by PwC. Less than 5% said their companies have gathered most of the required information from their suppliers and have begun assessing it.
The SEC law mandates companies disclose whether any of their products–including materials provided to them by suppliers–contain tantalum, tin, gold or tungsten that comes from the Republic of Congo region in Africa. The mining of these minerals is believed to be funding armed groups in the region allegedly responsible for labor and human rights abuses.
“I dont think we expected to see this level of companies saying they haven’t really done much yet,” Bobby Kipp, partner in PwC’s risk assurance practice, said. “But I think companies are beginning to realize they can’t wait forever.”
The survey didn’t ask the executives why their companies have yet to get started, but Ms. Kipp said some reasons may include companies delaying work in this area while their offices completed annual reports and other filings, or some firms hoping the deadline would be extended or the rule would be amended so as not to apply to them. A lawsuit has been filed to overturn the reporting requirement, and is pending in federal court.
The top challenges to meeting the requirements of the law listed by respondents were getting accurate and complete information from suppliers, establishing an enterprise-wide conflict minerals policy and identifying relevant suppliers. Ms. Kipp said PwC was somewhat surprised more respondents did not cite scaling their information technology systems to meet the requirements to gather and analyze this information.
The survey found nearly 13% of respondents said their companies have 5,000 or more suppliers, with nearly 14% saying they had over 1,000 but less than 5,000, more than 23% saying between 100 and 1,000 and 16.5% having fewer than 100.
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