Publicat pe 30/06/2014

1. EUROCHAMBRES main message:

EUROCHAMBRES’ position on the proposed regulation on a system of self-certification for importers of “conflict minerals”

On 05.03.2014 the European Commission proposed the draft regulation setting up an EU system for self-certification for responsible importers of tin, tantalum, tungsten and gold from conflict-affected and high-risk areas.

EUROCHAMBRES supports EU efforts geared towards encouraging responsible sourcing and preventing that trade in minerals intensifies or perpetuates armed conflicts in third countries. However, this should not come at the expense of the competitiveness of European industry.

We therefore support and plead to uphold the European Commission’s choice in proposing a voluntary self-certification system, as this is in line with the aims enshrined in the EU raw materials initiative that access to raw materials must be assured to safeguard European industrial competitiveness.

However necessary changes need to be made to draft regulation, so as to avoid imposing overly burdensome requirements on companies and public authorities, nor place EU companies at a competitive disadvantage when seeking compliance with different existing certification schemes on the international scene, such as the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Preventing unnecessary duplication in compliance processes and creating asymmetries among certification schemes on the international level must therefore be a priority in the legislative process, leading to a future adoption of the proposed regulation. At the same time, increased efforts should be deployed towards reaching a more unified global approach on supply chain control of conflict mineral, as it would be the most effective tool in achieving responsible sourcing on a global level. For example, the Conflict Free Smelter Programme is widely accepted as “industry standard”, yet due to different requirements in the proposed EU rule, it would not be compatible with the EU rule.

Moreover, EUROCHAMBRES would like to recall that more needs to be done at EU and Member State level to actively support and encourage the production of targeted metals within the European Union, as well as enabling a facilitation of license procedures allowing for their exploitation. EUROCHAMBRES Position Paper 30.06.2014 2

1. EUROCHAMBRES proposed changes to the draft Regulation:

• In order to make the draft regulation practicable and operational for EU companies EUROCHAMBRES has identified key areas below where changes should be undertaken to the draft regulation

1. Clarify the definition of “conflict and high risk areas” in Art. 2 (e):

The scope of the proposed EU regulation appears to be broader than any other certification system implemented on the international scene, with the major impracticality lying in the very vague and general wording of what constitutes a “conflict or high risk area”. Judging from the definition in the text, which includes countries of “weak governance” and “human rights abuses”, it is in no way clear which countries are to be targeted and by whose judgment this is to be determined.

With no further qualification of this term, the scope of the regulation risks becoming boundless and would leave EU importers in a position of having to judge subjectively which areas could be considered as “high risk” or conflict ridden. The unnecessary legal uncertainty for concerned economic operators must be avoided.

EURCOHAMBRES thus calls for a more precise definition of the geographical scope in Art. 2 (e).

2. Limit the scope of the regulation to “minerals” only, in accordance with Art. 2 (a)

In accordance with the definition in Art.2 (a), limiting the scope of the regulation to ores and concentrates as defined by Annex 1 to the regulation, would significantly reduce the burden on EU industry in terms of compliance with the code of conduct for responsible importers and would enable and incentivize more companies to participate in the proposed certification scheme. While the trade in mineral ores and gold may be contributing to conflicts in certain regions, there is no evidence that the downstream products beyond ores and concentrates are involved (e.g., tungsten oxides, carbides, powders, bars, rods, wires, plates, etc.). The processing of tungsten and tantalum concentrates is a cost and labor intensive process that requires conversion plants, chemicals and equipment that is not present in conflict regions.

3. Recognize as ‘equivalent’ companies’ compliance under existing international certification schemes

EUROCHAMBRES pleads to strengthen the benefits for responsible importers and avoid double certification for companies trading on the international marketplace that are already certified under an existing international scheme.

To better achieve this aim, compliance under the Dodd Frank Act and other responsible supply chain frameworks should be considered equivalent to the requirements of the obligations pursuant to Articles 4, 5, 6 and 7 of the proposed Regulation. EUROCHAMBRES Position Paper 30.06.2014 3

Moreover, importers complying with equivalent responsible supply chain frameworks shall also be included in the list of responsible smelters and refiners according to Article 8. Importers should thus be in compliance with this Regulation if they are undertaking due diligence in line with a recognized scheme or do business with companies that satisfy the requirements of another recognized scheme, as it would create efficiencies in the supply chain while trading responsibly with affected minerals.

4. Limit the disclosure requirements for companies under Art. 7

The requirements regarding the disclosure of supplies are quite comprehensive and would in many cases mean that the exact supplier of the certified importer could be identified. This would be detrimental for the business of the importer and could involve the disclosure of commercially sensitive information involved under the auditing mechanism foreseen in the draft regulation. Excessive disclosure requirements will create administrative burdens for importers that risk undermining effective participation of industry, ultimately weakening the policy effect of proposed certification scheme.

EUROCHAMBRES thus pleads to reduce the disclosure requirements set out in Article 7 and further clarify how “business confidentiality “will be ensured in the auditing process.

5 Need for clear rules to enable uniform application in all Member States

A uniform application of the rules on conflict minerals in all EU Member States is essential to avoid competitive distortions within EU member states. In order to allow for a uniform application, these rules must be clear and leave no room for inconsistent interpretation. In order to enable a uniform application of the third party audit obligations according to Art 6, clear audit protocols must be developed which should ideally be done in close consultation with industry groups. In this regard, it should be examined whether this aim can be best achieved through more coordination among competent authorities in Member States or through a centralized coordinating authority within the EU.

Final remarks:

While EUROCHAMBRES sees the need for increased transparency in the trade of minerals form conflict areas, EU Institutions should also consider programmes on the ground that could be equally effective in reaching the policy aim in question, such as supporting good governance, education, improving conditions in the mining sector or supporting political stability in conflict ridden countries.