Independent Private Sector Audit (IPSA)

An Independent Private Sector Audit (IPSA) is a third-party audit of a company’s Conflict Minerals Report (CMR) conducted by an independent, qualified audit firm. The original SEC conflict minerals rule required issuers to obtain an IPSA of their CMR. However, the SEC Division of Corporation Finance issued staff guidance in 2017 stating that it would not recommend enforcement action if companies did not obtain the IPSA. This de facto suspension of IPSA enforcement has remained in place; however, the Form SD filing requirement has continued.

Exchange Act Section 13(p)(1)(A)(ii); SEC Rule 13p-1; SEC Division of Corporation Finance, CF Disclosure Guidance: Topic 5 (April 7, 2014); SEC Staff Statement on Conflict Minerals (2017).

Although the IPSA is technically required by law, SEC enforcement guidance means that most companies do not obtain one. Instead, companies focus on ensuring their RCOI and due diligence processes are robust and well-documented, and that their Form SD disclosure is accurate. Companies with high ESG profiles or subject to investor scrutiny may choose to obtain an IPSA voluntarily to demonstrate audit rigor. Any change in SEC enforcement posture could revive the IPSA requirement without new rulemaking.

A company files its Form SD including a Conflict Minerals Report describing OECD-aligned due diligence across 12 3TG smelters. It does not obtain an IPSA because the SEC has not actively enforced this requirement since 2017. The company maintains detailed internal documentation in case SEC enforcement posture changes.