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Assessing and Enhancing the Contribution of Small and Medium-scale Enterprises to Due Diligence for Responsible Mineral Supply Chains

Assessing and Enhancing the Contribution of Small and Medium-scale Enterprises to Due Diligence for Responsible Mineral Supply Chains


Author(s): Dr. Yolande Kyngdon-McKay, with contributions from Angela Jorns, Estelle Levin-Nally and Yifang Song

Client(s): Bundesanstalt für Geowissenschaften und Rohstoffe (BGR)

Date: Jun 2016

This study is an examination of how small and medium-scale enterprises (SMEs) in the jewellery, medical technology, automotive and electronics industries in Europe, the United States of America and China are managing their “conflict minerals” reporting and/or due diligence requests and/or obligations. It was commissioned by the German Federal Institute of Geosciences and Natural Resources (BGR). ELL researchers used survey and interview research methods to gain an understanding of the key challenges faced by SMEs in relation to conflict minerals, what large-scale companies and industry associations have observed within their own respective SME supplier groups and memberships, and which efforts have ameliorated SME limitations in this field of compliance.

SMEs dominate much of the global economy and have a key role in the electronics, jewellery, automotive and medical technology industries, performing tasks including processing, part and component manufacturing, product assembly, and, primarily in the case of the jewellery industry, retailing also. Consequently, SMEs can be central to the production and distribution of products containing “conflict minerals”–tin, tantalum, tungsten and gold. However, there is limited existing research into how SMEs are managing this issue.

This study found that, overall, many SMEs are struggling with the conflict mineral issue and reporting requests from their customers. The findings also indicate that their need for more advice, information and support in the completion of these requests is not currently being met, which likely undermines their ability to provide their customers with reliable information about conflict minerals in their supply chains. Moreover, the incentives for SMEs to independently develop their own capacity for managing this issue do not currently exist in the industries examined for this study.

The report contains detailed recommendations for industry—including SMEs and large-scale companies, industry associations, the Organisation for Economic Cooperation and Development (OECD), and governments to improve the capacity of SMEs in carrying out conflict minerals requests and/or obligations. The best outcomes for responsible mineral sourcing would arguably be enabled by all of these stakeholders fully embracing their role in the provision of the study’s recommended support measures to SMEs in affected industries. Furthermore, in relation to the EU’s upcoming conflict minerals law, given that “overwhelming majority of affected EU importers (i.e. traders, smelters/refiners, and manufacturing companies) are SMEs or micro-enterprises”, it is ELL’s recommendation that in order for downstream companies in this region to responsibly source minerals an appropriate burdening of SMEs throughout affected supply chains should be clearly stated in the text.

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