Overview of CMRT

Conflict Minerals Regulations refers to the efforts made to ensure that minerals used in the manufacturing of products are sourced responsibly. This regulation aims to prevent the procurement of minerals like Tin, Tantalum, Tungsten, and Gold from mines controlled by armed groups or related to human rights violations, environmental degradation, and financing armed conflict. The above minerals referred to as 3TG are frequently mined in volatile areas like the Democratic Republic of the Congo (DRC) and its neighboring nations. Regardless of where the conflict minerals and metals originated, companies that import products containing 3TGs into the EU and the USA market are required to comply with conflict minerals regulations.

Conflict Minerals Disclosure

Companies must disclose if their products contain conflict minerals and information on the due diligence measures undertaken to trace their origin. This regulation applies to a wide range of industries, including the automotive sector. The CMRT (Conflict Minerals Reporting Template), developed by the Responsible Minerals Initiative (RMI) is being used by companies to communicate with their suppliers and gather data on the origin of minerals for reporting disclosure. The latest version of CMRT can be downloaded here

What new information are customers seeking in the disclosure?

Over the last 2+ years at APA, we have seen significant changes to the information disclosure requested by our customers, especially in the USA with their suppliers. Earlier most of the customers were content with Company level CMRT. This scope extended to all products produced by each manufacturer, enabling both suppliers and manufacturers to utilize the same CMRT for various customers and a diverse range of products.

1. Demand for Product level CMRT: Due to the recent regulatory enforcements like Uyghur Forced Labor Prevention Act (UFLPA), Supply chain Due Diligence regulations, and ESG; customers prefer detailed information from the suppliers. This has led to customers requesting ‘Product-level CMRT’. This scope covers only those products or parts that are being supplied to a specific client which has advantages like:

  • Reducing unwanted smelters
  • Reducing overall risk in the customer process

This also places a burden on the suppliers as they would have to separate the list of suppliers and smelters from the general list sent by the manufacturers for all products. Let us say that the supplier provides batteries and semiconductors for Client A, oscillators, and batteries for Client B, the supplier is now required to submit two CMRTs to Client A and Client B with their respective products. This process can become cumbersome and time-consuming which results in delays in conflict mineral disclosure.

2. Smelter Analysis: Customers also require detailed risk analysis of the smelters based on their smelter location (Country & State). Identifying high-risk smelters is crucial to improving the overall smelter quality. While the reporting template provides information on ‘Covered Countries’ and CAHRA countries, customers are also requesting information on the high-risk countries and smelters related to:

  • a. Non-compliant smelters including those in DRC and adjoining countries.
  • b. Smelters of those countries where US sanctions have been imposed
  • c. Smelters in the area where UFLPA regulations have been imposed by the US like Xinjiang, China
  • d. Smelters from the region of the Russian Federation.
  • e. Smelters based on Office of Foreign Assets Control (OFAC) sanctions
  • f. L2 – High-Risk Smelters based on RMAP standards where the Smelter/Refiner may be sourcing minerals directly or indirectly from countries with known illegal routes in the covered countries. This is available when customers have paid membership with the RMI database

3. Scoring System to Evaluate CMRT: Customers are also highly interested in evaluating the quality of the CMRT received from their suppliers through a scoring mechanism, which is based on multiple criteria like:

  • a. Validation of 3TG minerals / Cobalt / Mica through IMDS data or Full material disclosure reporting.
  • b. Suppliers sourcing from CAHRA countries
  • c. Recyclability information of 3TG: As companies are constantly battling to become more sustainable, suppliers who can provide recyclability evidence like documentation or reports are likely to receive higher scoring making them the customer’s reliable supplier.
  • d. Supplier response rate based on CMRT request initiated by the customer.
  • e. Conflict mineral Policy implemented by the supplier in their organization.
  • f. Supplier Due Diligence obligation.
  • g. Virtual Supplier Audits.

So how does APA handle conflict minerals requirements? 

We at APA understand that due diligence is a complex process and have strategized 4 effective steps with our regulatory experts that would assist any businesses with conflict mineral disclosure. CMRTs can be processed manually or using our software tool “Autogen CM”. We can help you identify if our software tool is necessary to complete conflict mineral reporting promptly.

  • 1. Supplier Chain TracingIdentify the products and the list of suppliers which may contain 3TG generally called scoping rather than request all of the suppliers to submit a conflict mineral report.
  • 2. Supplier EngagementCreate awareness about conflict mineral reporting for suppliers engaged with the customer, and provide needed clarification through conducting webinars, meetings, and scheduled calls. Once the supplier is confident, request them to submit a conflict mineral reporting disclosure.
  • 3. Data Assurance and AssessmentPerform OECD Due Diligence (Guidelines that companies respect human rights and avoid contributing to conflict through their mineral purchasing decisions and practices) and validate the information provided by the supplier using our logically defined 150+ criteria. Once the data assessment is performed, re-engage with the suppliers if any issues have been identified.
  • 4. Data ReportingPost-data assessment, data from all suppliers are consolidated to generate a single CMRT disclosure. This consolidation may vary based on regulations in the USA and the UK.

Reach out to our regulation experts on product regulatory compliances