Manufacturers warned to be on their mettle

Midlands manufacturers could soon find themselves held to account if the authorities discover metals sourced from conflict-ridden countries such as the Democratic Republic of Congo (DRC).

That is the warning from Johnathan Dudley, Midlands managing partner of national audit, tax and advisory firm Crowe Clark Whitehill.

Legislation already exists in the United States while the European Commission has now closed its consultation period and is likely to follow suit.

In the US, Conflict Minerals Reporting focuses on the DRC and is set to affect as many as 300,000 public and private entities across a wide variety of industries.

But it is thought any European equivalent could be even more extensive.

At issue are gold, tin, tantalum and tungsten.

Mr Dudley said: “In the US all this is beginning to kick in, putting a further regulatory strain on business.

“Now the EU is poised to act and this will put specific obligations on public companies and their supply chains. This is likely to hit metal traders in particular, so West Midlands operators need to be on the alert.”

Mr Dudley said companies should conduct due diligence to determine source and origin, looking to identify minerals that originate or have been transported through “red flag” conflict affected or high risk areas and materials claimed to originate from a country that has limited known reserves.

He added: “Traders should be wary of suppliers that have interests in companies that supply minerals from or operate in red flag locations and those known to have sourced from these before.

“If a trader believes that they are or potentially may be a red flag supplier they should address the risks.

“We would recommend that companies potentially affected by legislation start to embed procedures into their control environment now.”