Companies Report ‘Conflict Minerals’ Progress

This story appears in the June 13 print edition of Transport Topics.

Several publicly traded truck makers and industry suppliers have told federal regulators they are making progress uncovering “conflict minerals” from central Africa that might be used in their complex supply chains.

The companies filed compliance reports late last month with the U.S. Securities and Exchange Commission to update the requirement that they conduct a “reasonable country of origin inquiry” to determine whether there is “reason to believe” that their products are made using tantalum, tin, tungsten or gold, known as 3TG, originated in the Democratic Republic of Congo or surrounding countries.

Enough Project/Flickr

These commodities or their derivatives have been determined by the U.S. secretary of state to be financing hostilities in the Democratic Republic of Congo or the nine countries surrounding the Congo.

It was the third year of annual corporate disclosures summarizing their companies’ activities of the prior year — one that showed progress in searching out the forbidden minerals, according to a leading international organization helping in the effort.

“While it is premature to draw firm conclusions, there are indications that due diligence programs may be contributing to, in certain areas and minerals, breaking the link between mineral extraction and trade and conflict in Central Africa,” a recent report of the Organization for Economic Cooperation and Development said.

A sampling of trucking industry-related corporate reports for calendar year 2015 listed from a handful to as many as hundreds of smelters believed to be free of conflict minerals.

For instance, in its report to the SEC, Navistar International Corp. said it got a 72% response from the 1,433 direct suppliers in North America it queried for potential 3TG minerals.

“Although most suppliers provided responses that listed the known smelter/refiners in their supply chain, they did not specify what smelter/refiners were associated with products shipped to Navistar,” the truck and engine maker said. “Navistar is therefore unable to validate smelters or refiners or determine whether the conflict minerals reported were in fact contained in these products that Navistar manufactured in the reporting period.”

Engine maker Cummins Inc. said it surveyed more than 800 direct suppliers worldwide for 3TG minerals.

“Most of the responses the company received indicated that the 3TG in the suppliers’ components and materials either did not originate from a covered country, were not necessary to the functionality of the components and materials or the source country was undeterminable,” according to Cummins’ report.

Truck and engine manufacturer Paccar Inc. said it transmitted conflict mineral requests to nearly all of its approximately 400 largest production suppliers worldwide.

“The majority of our suppliers have provided a company-level response which does not identify the smelters/refiners used for particular parts/components or business customers,” Paccar said. “From the responses received from its suppliers to date, Paccar has not been able to fully determine the specific mines and smelters that processed the conflict minerals used in its products, or if the minerals are sourced from a recycler or scrap supplier.”

Eaton Corp. said it solicited approximately 3,100 suppliers for detailed information. The company’s suppliers identified only 38 potential smelters or refiners, all believed to be conflict-free. “Eaton found no reasonable basis for concluding that any minerals known to be in its supply chain directly or indirectly benefited armed groups in the DRC or surrounding countries,” the company said.

Meritor Inc. said it identified 368 potential direct suppliers that could use products that contain 3TG. Only 22 said that 3TG minerals may be used.

“Based on what Meritor’s core team has learned through its association with the Automotive Industry Action Group’s Conflict Minerals Work Group, it is clear that a great deal of work remains to be done in order to identify which smelters are or are not conflict free,” Meritor said.

Likewise, Wabco Holdings Inc. said it surveyed 600 of its suppliers in 2015.

“Due to a number of unidentified smelters referred by our suppliers as a potential source of some of the 3TG materials in our products, we are unable to determine whether our products contain conflict minerals that originated from the covered countries,” Wabco said.