At your firm or within your company dealing with conflict minerals, you might have recently heard the buzz about the latest Dodd Frank Conflict Mineral Compliance requirements. If these requirements affect the way law firms or companies do business, then working towards compliance initiatives remains a priority.
Regulatory Assessment and Scope Analysis
This involves examining the law firm’s client or company seeking compliance product portfolio and doing an analysis of whether the product are affected by the law and therefore must be in compliance, or “in scope” Vs “out of scope.” It can also include:
- Examining corporate obligations
- Determination of key regulatory compliance decision points
- Creation of a conflict minerals technical document
Creation of a Compliance Plan
This involves creating an end to end compliance plan and associated processes
- All activities detailed in chronological order
- Creation of application of due diligence standards
- Responsibilities assigned to personnel
- Determination of compliance communication pathways
Software Set Up
Industry standard to date for the majority of companies in scope of this regulation involve using a software platform to manage the large amount of data and suppliers that will be surveyed.Vendor Selection
- Vendor Selection
- Decisions to integrate with Enterprise Resource Planning system (ERP), which is used to design and manage resources within a company, as well as Product Lifecyle Management (PLM), used to design, manufacture and plan the development of products
- Methodology of supplier communication
Supplier Engagement
This portion of the process involves communication and data collection from the supply chain. Includes:
- Data collection methodology
- Reporting and analytics of the data collected
- Corrective action and addressing problem suppliers
Reporting
Once data has been collected firms enter the reporting phase to complete the process for the first year. This process is then replicated year over year. With the infrastructure in place firms enter the “maintenance” phase of compliance.
Standard practise in the compliance industry has also seen that Law firms or the company seeking Dodd Frank compliance are engaging 3-4 outside service providers.
They are usually:
1. Law firms: To determine exact requirements and legal requirements.
2. Software: To provide the platform for data collection, management and analytics.
3. Accounting: To audit the data collected and ensure strong data backing the program.
4. Consulting: To develop the processes, work with /train suppliers and help with data collection.
Assisting your clients with Dodd Frank Conflict Mineral Compliance does not have to be complicated. Working through the 5 step process above and working with other 3rd party providers makes compliance at any level easy.
