Yesterday, the European Commission announced that a “political understanding” was reached on the European conflict minerals law. As we understand it, this means that the relevant political entities have agreed upon high level legal principles for the conflict minerals requirements for covered businesses in Europe. The technical and implementation details are to be developed in the future.
Video announcements are available here and here. The most substantive information in the first video is presented at 13:30 – 14:50 and 16:50 – 19:50. In the second video, substantive information is presented at 10:22 – 11:20 and 13:30 – 19:22. We distilled this down to the following points we were able to extract:
- Due diligence and disclosure are mandatory, not voluntary, for the covered supply chain actors
- Due diligence is based on OECD, but is limited to 3TG at this time
- It is global in scope, covering conflict-affected areas, not just DRC and adjoining countries as is Dodd-Frank
- Requires due diligence for upstream actors, including smelters/refiners
- Due diligence is also mandatory for importers of ores and processed metals, but manufacturers are not covered
- Covers 95% of relevant European importers of ores and processed metals
- Specific guidelines are to be developed for companies with more than 500 employees
- Requires public disclosure by covered downstream actors, which will include a registry/database
- A clause exists for the EU/EC to review/renegotiate the law in the future relative to covered downstream actors
- Includes some form of on-going monitoring, possibly audits
- Several exemptions have been agreed upon, including recycled materials, existing stocks of materials and by-products from processing. The details are to be worked out in additional trialogue technical negotiations
As we know more, we will continue to post updates. Feel free to contact us with any questions.
Minutes ago, Fern Abrams at IPC posted an important update about the EU Parliament vote on the EU conflict minerals directive.
We highly recommend taking a few minutes to read it and get caught up.
Bloomberg.com reported that earlier this week, European authorities launched a major investigation of several large companies that are thought to have played a role in a system of fraud and tax evasion that may have impacted 7% of the total CO2 emissions trading market for 2009 in the EU.
Prosecutors and tax investigators yesterday searched Deutsche Bank, HVB Group and RWE AG in a raid on 230 offices and homes to investigate 180 million euros ($238 million) of tax evasion. The probe targeted 150 suspects at 50 companies…
Yesterday’s raids were the biggest related to a fraud that may have tainted an estimated 7 percent of European Union carbon trades in 2009…
About 400 million metric tons of emission trades may have been fraudulent last year, or about 7 percent of the total market, including futures transactions, according to estimates from Bloomberg New Energy Finance.
Europe lost about 5 billion euros in revenue for the 18 months ending in 2009 because of value-added tax fraud in the CO2 market, according to Europol, a European law-enforcement agency.
A recent article in Investments & Pensions Europe (IPE) magazine provided a detailed review of a study that looked at the status of environmental management programs in the EU commercial real estate industry. Based on the results of the study, the sponsors have launched a new Global Environmental Real Estate index.
Research commissioned by asset managers APG and PGGM and the Universities Superannuation Scheme found many property companies and fund managers are not actively managing environmental issues in their real estate portfolios, even though research suggests environmental performance is “significantly and positively related with return on assets”.
The findings may actually be more positive than the true status of property companies environmental performance as it is feared only the better property managers responded to the survey.
Companies focused on residential or non-core property types “score substantially lower on the implementation measurement index of environmental practices”, the study found. At the same time, dedicated office funds have the highest scores as many of the environmental metrics and technology on the market is targeted at that sector. Yet industrial buildings significantly lag other sectors.
Findings revealed just 19% of property company respondents report actual numbers of energy consumption, while 16% report water consumption and 14% report carbon emissions.
The criteria for assessment were related to the presence of environmental management policies, the integration of issues in property management and their disclosure, and asked for evidence on water and energy consumption, waste collection and recycling, CO2 emissions as well as on employee environmental training programs and remuneration policies.