In a press conference concluded minutes ago, Bernd Lange, Chair of the International Trade Committee, Iuliu WINKLER, rapporteur with Cecilia MALMSTRÖM, Member of the EC in charge of Trade and Council presidency and Ivan LANČARIČ, Ministry of Economy of Slovak Republic announced what is called “informal deal on a regulation” for the EU conflict minerals scheme. This action will be legally binding and is aligned with the June 2016 political understanding. The final text will be voted on by the member states on December 7, 2016, with a vote in the plenary expected in the first half of 2017.
Details are forthcoming, but what is known now is:
- Due diligence is based on the OECD Guidelines.
- The scheme is mandatory for importers of 3TG and applies to companies with more than 500 employees but small volume importers will be exempt from these obligations. The “small” threshold was not provided in the public announcements. Previous reports place the threshold at 100kg for gold.
- The regulation allows companies to become a responsible importer by declaring in writing to the competent authority in a member state that it follows the due diligence obligations set in the regulation. A list of these importers will be published by the Commission. The competent authorities will carry out checks to ensure that EU importers of minerals and metals comply with their due diligence obligations. Details about the checks were not provided in the public announcement.
- The legal deadline for implementation is January 1, 2021 but the EP specifically invites voluntary early entry into the program by EU manufacturers and sellers not otherwise subject to the law.
- The Commission will draft a handbook including non-binding guidelines to help companies, and especially SME’s, with the identification of conflict-affected and high-risk areas.
Press releases from the EP are available here and here. A more detailed press release is here.
We will continue to follow these developments and will post updates as they are available.
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.
In taking over the EU presidency for the current term, the Netherlands publicly stated one of their primary goals was to complete negotiations on the final EU conflict minerals law and get a final law on the books. This has not happened and the Dutch presidency ends in June. Joanna Sopinska of EU Trade Insights earlier this week provided an update (subscription required) on the negotiations.
According to Sopinska, the Dutch are now working toward a
mandatory certification method for importers of minerals and metals, whose annual imports exceed a certain threshold. The document [on the matter obtained by EU Insights] notes that the threshold/ thresholds will be determined on the basis of proposals by member states.
This indicates that while the scheme would be mandatory, fewer than the originally-estimated 800,000+ businesses may be affected based on the thresholds. With member states establishing their own thresholds, they retain a significant amount of sovereign control over the impact of the requirements within their borders and economy – an approach that could hold enough appeal to be successful.
Talks continue next week concurrent with the OECD Forum and perhaps an announcement of some kind will be made. We will post information and updates from the Forum as they become available.
An excerpt from an article in Chemical Watch:
… last week, Signe Ratso, trade strategy and analysis director at the European Commission’s trade directorate, said discussions between the Parliament, Commission and Council of Ministers on the amendments should be concluded during the next EU Presidency, form [sic] 1 January to 30 June, which is held by the Netherlands. After that, she said, the trilogues – three-way talks between the institutions to finalise a law – will start.
So we have a while to go before the EU’s conflict minerals requirements will be finalized.
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.