Conflict reporting: diamonds, tungsten, Whac-A-Mole ... and the CPA.

• Author: Monterio, Brad J.
• Position: Newfinancials

Chances are you send mails and surf the web on a daily basis using a handheld device that might contain questionable components. You probably often sit in front of a glossy screened device on game day that just isn't playing lain The machine that gets you between point A and point B might actually deserve an F. What do these things have in common?

Consumer electronics, cars, food packaging. toys, clothing, jewelry and other items potentially contain "conflict minerals" sourced in the Democratic Republic of the Congo (Congo) in Africa. Predictably, the next question in your mind is, "What are conflict minerals and why should I care?"

In short, conflict minerals include tin, tungsten, tantalum and gold--together known as 3TG--sourced from the Congo and alleged to be the newest Funding source for African armed conflicts. The 3TG are used as raw materials in thousands of products around the world. Regulators and lawmakers are trying to find solutions to identify whether these materials sourced from the Congo are in companies' supply chains/products so that alternative sources can be found, funding for armed conflicts can be eliminated or reduced, and stakeholders made aware of which companies are "doing the right thing."

It may not be readily apparent to CPAs that conflict minerals will impact them, but take notice. CPAs are going to need to know more than auditing'. accounting and tax if Congress and the SEA: have am say. Enter supply chain management., natural resource disclosures and corporate social responsibility (CSR) awareness and reporting. But I'm getting ahead of myself. Some background context is needed before making that leap.

Conflict Minerals: The Cousin of Blood Diamonds

The recent attention on it conflict minerals is rooted in the actions taken around a well-known cousin, conflict diamonds. In June 1998, the United Nations Security Council (UNSC) passed Resolution 1173 that identified, among other things, the use of diamonds (also called "blood diamonds") to fund armed conflicts between warring factions in Africa.

In May 2000, the UNSC subsequently passed Resolution 1295 that served as a catalyst for the diamond-mining countries of southern Africa to devise a method to halt the trade of conflict diamonds and to provide assurance to diamond buyers that their diamonds have not contributed money to armed conflict.

In July 2000, the World Diamond Congress meeting in Antwerp passed a resolution to strengthen the industry's ability to block the trade of conflict diamond, The United Nations ultimately adopted the Kimberly Process Certification...