Companies alongside the supply chain of US-listed companies - be it as direct suppliers or as sub-suppliers - today face the challenge of having to examine products with respect to the utilization of so-called conflict minerals.
Since July 2010, the US American Dodd-Frank Act (Dodd-Frank Wall Street Reform and Consumer Protection Act) is legally binding.
It includes, among other things, the disclosure and reporting requirements for US-listed companies regarding the use of certain raw materials originating from the Democratic Republic of Congo (DRC) or neighboring countries. Under the Dodd-Frank Act, "conflict minerals" are defined as the raw materials tantalum, tin, gold and tungsten, when their production and the trading with these raw materials contributes to the financing or other supporting of armed groups in the Democratic Republic of Congo or neighboring countries (Angola, Burundi, Republic of the Congo, Rwanda, Zambia, Sudan, Tanzania, Uganda, Central African Republic).
The objective of this regulation is to stop the financing of armed groups in the DRC from the proceeds generated by mining and trading raw materials. The background for this are the continuous conflicts - particularly in the Eastern Regions of the Democratic Republic of Congo (known as the Great Lakes Region), which have significant adverse effects on the local population and cause a precarious humanitarian situation.
Section 1502 of the Dodd-Frank Act does not prohibit the utilization of conflict minerals, but operates according to the "name and shame" principle. The regulation shall de facto induce companies not to finance armed conflicts with the raw materials used by them, so that a reputational risk is not entered into.