Conflict-Free

The term ‘DRC conflict-free’ was defined under the original SEC conflict minerals rules as minerals that did not directly or indirectly finance or benefit armed groups in the DRC or adjoining countries. However, following a 2014 U.S. Court of Appeals decision (National Association of Manufacturers v. SEC), SEC guidance states that companies should not be required to describe their products as ‘DRC conflict-free,’ ‘not DRC conflict-free,’ or ‘DRC conflict undeterminable’ in the Conflict Minerals Report. Instead, companies describe their due diligence efforts and findings.

SEC Rule 13p-1; National Association of Manufacturers v. SEC, 748 F.3d 359 (D.C. Cir. 2014); SEC Staff Guidance on Conflict Minerals (April 2014).

Despite regulatory nuance around the label, ‘conflict-free’ remains a widely used commercial and reputational term in the industry. The RMAP audit program uses ‘conformant’ to describe smelters that have passed audits, rather than ‘conflict-free.’ In practice, downstream manufacturers communicate to customers that their products source from RMAP-conformant smelters, which is the industry-accepted proxy for responsible sourcing.

A semiconductor company states in its Form SD that it conducted due diligence aligned with the OECD Guidance and that 94% of identified smelters in its supply chain are RMAP-conformant, rather than declaring its products ‘DRC conflict-free.’