NEW YORK, Aug. 23, 2012 /PRNewswire/ -- Jim Low, a partner with U.S. audit, tax and advisory firm KPMG LLP and the leader of the Americas' Financial Services Center of Excellence, today issued the following statement after the U.S. Securities and Exchange Commission voted to approve rules that have become known as the "Conflict Minerals" provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010:
Corporate Landscape: Approval of these rules creates a challenge for many companies whose products or suppliers use or are exposed to the so-called "conflict minerals" in the manufacturing process; the SEC has estimated the rules will affect as many as 6,000 public listed companies, both domestic and foreign, while private companies may also be affected if they are suppliers to SEC registered companies. Companies will need to have a much better handle on their supply chains, tracing the use of these minerals to the raw materials from the mines or the smelters.
Compliance Frameworks: In most companies, C-level executives are handling compliance, with the Board and the CEO driving strategy. Since conflict minerals reports may be subject to an independent audit that would be filed in a company's public filings (Form-SD, created specifically for this rule) with the SEC, it is expected that a company's SEC reporting group will take responsibility. The compliance process may involve at least four corporate departments: supply chain and procurement, legal counsel, finance, and the internal audit group. The head of sustainability or corporate social responsibility (CSR) may also be involved in companies that have such a position. In addition, given the requirement for an independent audit of the conflict minerals information, the audit committee of the board should be fully engaged in the same way as with other audit requirements.
Timing: Most executives that KPMG has spoken with believe it will take at least two years to implement compliance fully. Under the rules, starting in 2013, companies will file a Form "SD" (Specialized Disclosures) by May 31 covering the reporting period from Jan. 1 through Dec. 31, irrespective of a company's fiscal year.
Work to Date: A number of companies have already set up a framework of compliance, including, for example, setting goals to become "conflict free." At least 77 companies have published a conflict minerals statement online, and 63 organizations included conflict minerals information in their 2011 SEC filings.
For additional background on Conflict Minerals, discussion of the rules and the requirements, as well as discussions on local and global jurisdictions, please contact Bob Wade at 201-307-7482 to speak with Jim Low.
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International.") KPMG International's member firms have 145,000 people, including more than 8,000 partners, in 152 countries.
SOURCE KPMG LLP