Elmgroup Blog

Documentation on SEC Position on Tin Available

UPDATE:  This topic was presented in detail by Eric Gotting of Keller and Heckman at last week’s IPC conflict minerals seminar.  As was made clear in their follow up letter to the SEC, the exclusion includes 3TG, not just tin. The law firm of Keller and Heckman, on behalf of ten industry associations, participated in a telephone conference with  the SEC staff concerning whether non-metallic forms of tin qualify as conflict minerals under the final rule.  The meeting – and its outcome – has been widely publicized, but documented confirmation of the SEC’s position is not expected to be published by SEC themselves. Earlier this week, however, Keller and Heckman’s follow up letter was published, confirming the Staff’s agreement that non-metallic forms of tin are “chemically distinct from the metal derivatives themselves and thus the agency did not intend the scope of the final rule to reach that far.” Eric Gotting from Keller and Heckman will be speaking on this at IPC’s Conflict Minerals Conference this Thursday, July 10 in Santa Clara.  Elm will also be presenting.  We hope to see you there.  

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Tulane’s 2011 Conflict Minerals Cost Study Proving Accurate

Our review of all 1300+ Form SD and CMR filings continues. At this time, 400 full reviews are complete, along with another 130 partially completed.  Very soon we will be announcing the participation of a prestigious law school in the study as well. But yesterday, something struck me as I prepared to be interviewed by our friend Broc Romanek of TheCorporateCounsel.net. I compared a couple findings from our sample of 400 to certain predictions in the Tulane University/Payson Center October 2011 cost analysis submitted to the SEC during the proposal stage of the conflict minerals disclosure requirements.  The study (along with NAM’s cost study) was viewed by the SEC as “the most useful framework[] for considering costs” (p. 302 of the Final Release) and has been widely acknowledged for its impartiality and credibility. I found that: Tulane’s estimate of “large company” issuers (those with annual revenues greater than $100 million) was very close to the actual number of filers.  The University’s prediction was 1,678 compared to 1,308 actual*. Regarding the number of impacted direct suppliers, Tulane essentially hit the bullseye – a predicted average of 1,060 relevant suppliers per filer as compared to an actual average of 1,126 suppliers per […]

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Upcoming Elm Presentations on the First SEC Conflict Minerals Filings

We are participating in a number of upcoming conferences and webinars reviewing the 2013 Form SD/CMR filings, providing lessons learned and thoughts on 2014 program improvements.  We hope you will join us. June 26:  Webinar presented by SourceIntelligence June 26: Webinar presented by ThomsonReuters July 10:  IPC Conference – Conflict Minerals:  Staying Current in a Changing Landscape August:  Webinar presented by Compliance Week (TBD) October 22:  National Industrial Fastener & Mill Supply Expo

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Tulane University Post Mortem Conflict Minerals Implementation Cost Analysis

Tulane University is seeking input from companies that implemented conflict minerals compliance programs under Section 1502 of the Dodd-Frank Act. This study will gather data on actual implementation costs and externalities related to company activities behind the first Form SD/CMR filings. Dr. Chris Bayer, who authored the University’s original cost analysis of the SEC proposed regulation in 2011, will act as the study coordinator, providing continuity of knowledge and expertise.  Several major industry associations from a spectrum of industry sectors are suggesting that their members participate in the study.   Given the credibility that the SEC gave to the first Tulane cost analysis in 2011, we believe that this study will also be well received by regulators and policymakers.   All stakeholders stand to benefit from the findings, which will reveal realities of Section 1502 regulatory compliance.  More information about this study can be found at  http://www.payson.tulane.edu/welcome-tulanes-conflict-minerals-post-filing-survey The deadline for participation is July 31, 2014, so don’t delay.

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Conflict Minerals Form SD/CMR Benchmarking – You Pick the Companies

The semi-official final count of Form SDs/CMRs filed with the SEC is 1,300.  We are in the process of reviewing every single one of these against a set of 20 key criteria to produce flexible benchmarking reports.  To date, we have completed full reviews of 125 filings and partial reviews of almost 500. We have captured the “big names” in the initial 125 full reviews but are now tackling the rest alphabetically.  That may not be the best approach, so we’d like your help in determining the companies you are most interested in having us review first. From there, you can request a benchmarking report that includes the requested filings. We welcome any comments and suggestions to assist in prioritizing the reviews.   Please feel free to email us directly or via the contact form on our website.

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SEC Confirms Exclusion of Tin Chemicals from Conflict Minerals Disclosures

UPDATE:  Last week, the SEC made available the letter from the law firm confirming the teleconference with SEC staff on this matter.  Further, the matter was discussed in detail at last week’s IPC conflict minerals seminar.  We have learned that the exclusion includes 3TG, not just tin. Yesterday we had an inquiry from Jeff Perry at King & Spalding concerning very recent guidance from the SEC on whether the conflict minerals disclosure applies to chemical forms of tin or is limited to metallic forms of tin.  As a result, we contacted the SEC staff directly about this and received confirmation that indeed the staff has determined that the disclosure requirements only apply to metallic forms of tin, including alloys containing tin that is intentionally added.  It does not appear that the staff will issue any written documentation of this new interpretation, but we believe outside counsel representing the group requesting this interpretation will memorialize the position in followup correspondence to the staff. At this time, it is unclear if the interpretation is limited to tin or applies to chemical forms of the other three minerals.  For instance, gold salts are a common chemical form of gold. Issuers who filed by […]

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May 30 Conflict Minerals Filings – Our Initial Review and Thoughts

UPDATE:  We have standardized benchmarking analyses/reports available for a nominal fee.  As of late Sunday night (June 1), we began detailed reviews and summary data collection/analysis on over 100 filing companies representing a range of industry sectors.  This will expand over the coming weeks to include the thousands more filings expected by the end of the day today.  If you are interested in obtaining a benchmarking report for your company, contact us.  We can provide custom reporting as well. Want to help us prioritize our company reviews?  Read this. Even before we got our first cup of coffee this morning, we went to SEC’s website and perused the recent filings for Form SDs/CMRs. Over the past 48 hours (at least as of about 10am eastern time), close to 150 filings were submitted. And there will certainly be more than that by the time this article is published. We semi-randomly selected 15 company filings to compare and contrast. In selecting the companies, we tried to select large, well known companies across a range of industries. We excluded companies with whom Elm worked on their program or filing. Below is summary information of the 15 filings that includes the company name and industry, […]

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US State Department Statement on Continued Conflict Mineral Due Diligence

The US State Department has issued a short statement about its continuing support of corporate due diligence for conflict minerals in light of the recent US Appellate Court decision and related SEC statements. The State Department’s statement is available here.

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Intel Files its Conflict Minerals Form SD, CMR and IPSA

Industry leader and conflict minerals bellwether Intel has filed its conflict minerals disclosure with SEC.  Certainly we aren’t the first to break this news, although it seems this is still not as widely known as one may have expected. We expect this to be viewed as a reference point for others to use, although few are likely to follow the lead entirely as Intel has put itself into a unique position relative to conflict minerals and has been highly proactive for more than four years. Our main impressions of the filing: To no one’s surprise, it is far more than a minimalistic document, containing details and some metrics; Some products are classified as DRC Conflict Free and others as DRC Conflict Undeterminable – using the phrasing struck down by the Appellate Court; An IPSA was conducted and included in the filing as required for a DRC Conflict Free determination (we suggest everyone read the IPSA report to get a good understanding of what the IPSA entails, what is specifically excluded, and then assess the value of the IPSA in relation to potential cost); Intel’s definition of Due Diligence measures draws a clear line between RCOI and due diligence activities.  This is […]

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Conflict Minerals Filings: Need a Last Minute Quick Third Party Review?

We expect everyone who needs to know is painfully aware that the filing deadline for SEC’s Conflict Minerals Form SD and CMR is only seven calendar days (but five business days) away. While most companies have likely finished their internal reviews and final approvals of the filings – and are simply awaiting the official filing date – some are still completing last minute preparations.  Based on most of the early filings and some others we have seen, we recommend that issuers have a quick third party review completed before the documents are submitted to the SEC. We have completed many reviews of SDs and CMRs for companies ranging from Fortune 50 to $120 million annual revenues and have a process and reference template for comparison.  As a result, we can very quickly provide comments and recommendations even with same-day turnaround.  Some firms are charging a minimum of $5000 for such a review.  Because of our experience, existing reference template and efficiency we can complete the task at a cost that can be 50% – 80% lower than others. Give us a call or send an email to get started.  But don’t delay – time is running out.    

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