Jun 14, 2023
Complete Guide: The Conflict Minerals Reporting Template (CMRT)
The Conflict Minerals Reporting Template (CMRT) is intended to help companies report on the sourcing of conflict minerals within their supply chain. The template can be used by organizations working under the European Union’s Conflict Minerals Regulation, Section 1502 of the United States Dodd-Frank Act, or both.
Through annual conflict mineral reporting, consumers, investors, and other stakeholders can understand the extent to which a firm’s conflict mineral supply chain might be at risk of funding armed combat and human rights abuses in some of the world’s conflict-affected or high-risk areas.
Based on data submitted using the template, stakeholders can find that:
65% of smelters and refiners (SORs) in Microsoft’s supply chain had passed a third-party audit for sustainably sourcing conflict minerals in 2022.
100% of SORs in Apple’s supply chain have been certified conflict-free or are in the process of becoming certified for the eighth year in a row.
Amazon has never reported on how many of its suppliers complete CMRTs.
This article explores the reasons behind the CMRT and what is involved in completing it for compliance.
What is the Conflict Minerals Reporting Template (CMRT)?
The Conflict Minerals Reporting Template is a standardized survey, asking questions of smelters with conflict minerals downstream a company’s supply chain. It was developed by the Responsible Minerals Initiative (RMI) to help businesses report on activities within their supply chain related to tin, tungsten, tantalum, and gold. These resources, often sourced from high-risk countries, are collectively known as the 3TG minerals.
For companies in the scope of global regulations on conflict minerals required to report annually on the due diligence within their supply chain, the CMRT is a useful tool to ensure they make comprehensive and impactful disclosures. In the reporting year 2023, analyzing activities in 2022, 78% of U.S. organizations used the CMRT to make their disclosures. However, even out-of-scope organizations can use the CMRT to provide transparency over the use of conflict minerals in their value chain.
Purpose of the CMRT
The reasons behind the implementation of the CMRT include:
Transparency - Encouraging companies to investigate and declare the source of 3TG minerals in their supply chain for the benefit of stakeholders
Standardization - Ensuring that all companies are using a standard measure to produce their conflict mineral reporting
Compliance - Helping businesses remain compliant with the Dodd-Frank Act and the EU Conflict Minerals Regulation
Risk-management - By identifying sources of 3TG minerals, companies can better avoid those that fund conflict and suffering, reducing the risk of reputational damage and legal issues
Ethical sourcing - With a transparent knowledge of sources used by smelters and refiners, it is easier for businesses to find sustainable suppliers
Stakeholder assurance - Investors, consumers, and the public can trust that a business is doing what it can to avoid minerals from conflict-affected areas.
The CMRT supply chain process
You should make sure that each supplier in the supply chain between your organization and the smelter fills in CMRT. Request a survey from your primary supplier, who will then request from their primary supplier, up until the supplier who receives the goods from the smelter. They request the relevant information on the use of 3TG minerals from the smelter.
Once the smelter provides that detail, the organization that buys directly from them can fill in their CMRT, passing it back along the chain, with each supplier collecting the data, checking it, filling in their template, and passing it on until the aggregated conflict mineral survey returns to your business for checking and using to fill in your template.
Step-by-step guide to CMRT completion
The CMRT is an eight-page Excel document, featuring sheets entitled:
Revision
Instructions
Definitions
Declaration
Smelter list
Checker
Product list
Smelter Look-up
Revision
This page simply details the different versions of the CMRT, with information on the version number, what changed in terms of the function of the template, and any updates to the list of known smelters. The first step, especially for those who have reported previously, is to read the latest updates to understand whether you need to make any adjustments to their reporting to comply with the new template.
Instructions
All users should read this page to understand the background to the template and for instructions on how to complete the declarations. You can find help with answering questions on due diligence in line with the Organization for Economic Co-operation and Development (OECD) Due Diligence Guidance Annex II Risks, for example.
The instructions give guidance on permissible responses to questions that require more detail than simple “yes” or “no” answers.
It also provides assistance with completing the Smelter List requirements and finishes with terms and conditions of use.
Definitions
Read the Definitions tab for clarity on some of the official terms used in the CMRT. This includes guidance on who should be designated as the “Authorizer” in the document. The Authorizer is the person within your organization who is responsible for the content you fill in the Declaration tab.
Declaration
Start by selecting the language you want to use to fill in the declaration, using the dropdown menu. There are three sections of the Declaration page on the CMRT. They comprise:
A section for company information
A section featuring questions relating to the use of 3TG minerals within your supply chain
A section regarding responsible sourcing policies, due diligence measures, and actions undertaken
Company information section
Boxes marked with an asterisk and highlighted in yellow are mandatory fields and all users must complete them. This includes your company name, declaration scope or class, and details of a contact person and the Authorizer. However, the more detail you can give, even when it is not mandatory, the more transparent your declaration will be.
Under Declaration Scope or Class, you should stipulate whether the declaration applies to all company products (state “Company”), some products (state “Product” or “List of Products” and fill in the details on the “Product List” sheet), or User Defined. In the latter case, provide more details in the Definition of Scope section.
For the “Effective Date” field, use the DD-MMM-YYYY format, e.g. 23-Apr-2024.
3TG minerals section
In question 1 of this section, declare the 3TG minerals used in your products or production process. If you answer “No” in this question regarding a mineral, you do not need to answer further questions about that mineral below.
Answer these questions truthfully to the best of your ability. They help stakeholders understand the extent to which minerals are used in your supply chain. The Comments section is available for providing further detail on your answers. For example, if you answer “Yes” to the question regarding any of the smelters in your supply chain sources from Covered Countries, add the smelter name and CID number, which you can find on the Smelter Look-up sheet.
Policies, measures, and actions section
The first question in this section, question A, asks whether the company has a responsible minerals sourcing policy. In order to answer “Yes”, this policy must cover the 3TG minerals in your supply chain, the OECD-identified risks, and any conflict-affected and high-risk areas from where you source minerals. It should also identify the response your company makes when a risk is identified.
Use the Comments section to add detail to your answers, including the process through which you carry out due diligence on CMRTs from suppliers and the corrective action management processes you have in place.
Use the dropdown menu when asked whether your company is required to file an annual conflict minerals disclosure. You can state whether you are required by the US Securities and Exchange Commission (SEC), the European Union, or both, or whether you are not obligated to report.
Smelter list
Enter the details of the smelters in your supply chain, along with identifying numbers. You can find information on Standard Smelter Names (SSN) – those recognized by the RMI – on the Smelter Look-up. For non-SSNs, you should perform due diligence to ensure their processes are compliant.
Once you add the CID number of the smelter in the list, the other fields will automatically populate. For non-SSN smelters, select “Smelter not listed” in column C and fill in as many details as you can. If you do not know which smelter forms part of your chain, select “Smelter not yet identified” in Column C.
Product list
If you are reporting on a product-basis, rather than a companywide basis, fill the 3TG-affected product number and name into the Product list. There is also a Comments section for any other information relating to the products on the list.
Checker
This page serves to show you any sections that you are yet to adequately complete. If the section turns green, you have completed it. If it is red, you must fill in the required information.
This relates only to mandatory fields. When you have filled all required sections in, the Checker tab on the bottom row turns green to allow you to proceed. Even if it is in green, check through your entries, as you may wish to complete some non-mandatory sections, too.
Download CMRT
For the latest version of the CMRT, click here and download the spreadsheet.
Common pitfalls in conflict minerals reporting
Limited supply chain visibility
You need to understand the use of 3TG minerals across your entire supply chain and, without good communication down the line to smelters, it can be difficult to draw an accurate picture of compliance. Detailed and accurate information is a necessity.
Insufficient due diligence processes
You cannot rely on ‘out of sight, out of mind.’ You are responsible for reporting on the actions of the chain that leads to your products and services, which means following OECD’s guidelines on ensuring your suppliers meet internationally recognized standards.
Over-reliance on supplier self-assessments
It is essential that you seek independent verification of the claims made by suppliers regarding conflict minerals. Simply accepting self-assessments as a matter of course could lead you to be liable under the Dodd-Frank Act or the EU Conflict Minerals Regulation.
Inaccurate or incomplete reporting
Accurate reporting does take a lot of time and significant resources, but it is a regulatory requirement and that means it is essential for your company’s relationship with investors, customers, and regulators. Don’t underestimate the amount of work required to complete reporting to a satisfactory level.
FAQ
Who is required to fill out the Conflict Minerals Reporting Template?
The CMRT is designed primarily for companies within the scope of Section 1502 of the Dodd-Frank Act and the text of the EU Conflict Mineral Regulation, as well as the suppliers in their value chain, down to, but not including, smelters. Essentially, downstream companies. However, businesses not in scope of these pieces of legislation may also fill the template in for their own disclosure processes.
How often do companies need to update their CMRT?
Companies should update their CMRT annually to maintain compliance and ensure accurate reporting on their relationship with the 3TG metals.
What is the difference between the CMRT and the EMRT?
The Conflict Minerals Reporting Template and Extended Materials Reporting Template both aim to understand the use of minerals in organizations’ processes. However, there are some differences:
Scope of Minerals:
CMRT - A standardized reporting template, focused on reporting the sourcing of 3TG minerals (tungsten, tantalum, tin, and gold), which are often associated with funding armed conflict and human rights abuses.
EMRT - Expands the scope to include cobalt and mica, referred to as extended minerals. These are not covered under the CMRT due to their different sourcing concerns and uses in industries.
Mandatory vs. Voluntary:
CMRT - Completing the CMRT is mandatory for companies required to report on conflict minerals under regulations such as the Dodd-Frank Act in the United States and the EU Conflict Minerals Regulation.
EMRT - The use of the EMRT is voluntary and intended for companies looking to provide additional transparency around their sourcing of cobalt and mica, beyond regulatory requirements.
Conclusion
The Conflict Minerals Reporting Template is a helpful tool to standardize the way that the use of 3TG minerals in companies’ supply chains is disclosed. It provides transparency on the processes and helps to ensure that businesses are carrying out the required due diligence on the suppliers that they work with.
Communication is key to supply chain success and compliance, which is why Beebolt’s supply chain operating system is an essential addition to any organization. It provides a central point for engagement with suppliers, helping to build relationships and make the process of information gathering more simple. Learn more about Beebolt or book a demo.
References and further reading
Which Procurement Sourcing Strategies Are Most Successful Today?
What Are the Objectives of the EU Conflict Minerals Regulation?
Compliance Requirements of the EU Conflict Minerals Regulation