The Proposal for a Regulation of the European Parliament and of the Council setting up a Union system for supply chain due diligence self-certification of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas[1] was launched, on March 2014, by the European Commission and forwarded to the European Parliament and to the Council, according to the ordinary legislative procedure.
[1] Proposal for a Regulation of the European Parliament and of the Council setting up a Union system for supply chain due diligence self-certification of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas, COM/2014/0111 final - 2014/0059 (COD). Available on: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52014PC0111
On 20 May 2015, the European Parliament adopted 60 amendments to the proposal. However, the vote on the legislative resolution was postponed to a later session, thereby not closing the first reading.
Up to date, a number of informal contacts have taken place between the Council, the European Parliament and the Commission with a view to reaching an agreement on this dossier at first reading, thereby avoiding the need for second reading and conciliation.
In this context, the rapporteur, Mr. Iuliu WINKLER presented one single compromise amendment (amendment 156), agreed during the informal contacts and intended to replace the 60 amendments previously adopted by the European Parliament.
During these informal contacts, it was also agreed an amendment (amendment 157) inviting the Parliament to take note of a Council statement and three Commission statements made in the context of the informal contacts.
When it voted on 16 March 2017, the plenary adopted the single compromise amendment (amendment 156) to the proposal for a Regulation.
The Commission’s proposal as thus amended constitutes the Parliament’s first-reading position which should be, therefore, approved by the Council without further modifications.
The adoption by the Council is expected in the coming weeks.
Some particularly relevant provisions, contained in the European Parliament’s first reading position, are hereby highlighted.
The proposal of Regulation aims at introducing a supply chain due-diligence system for Union importers of tin, tantalum and tungsten, their ores, and gold (often grouped under the acronym of 3TG and called “conflict minerals” since their systematic exploitation and trade, in conflict-affected and high-risk areas, contribute to the commission of serious violations of human rights, international humanitarian law or violations amounting to crimes under international law).
The supply chain due-diligence system proposed by the Regulation is basically a self-certification mechanism, which seeks to encourage EU operators, importing minerals and metals, to a responsible sourcing of minerals.
It is a responsibility mechanism residing entirely on the importers, who, in order to comply with the Regulation, shall fulfil same obligations, such as: “management system”, “risk management”, “third party audit”, and “disclosure”. National competent authorities have only ex post checks to carry out, to ensure whether self-certified responsible importer comply with the obligations or not.
The Regulation will not apply to (Article 1):
Supply chain due diligence obligations (Article 3): Union importers of minerals or metals will have to comply with the supply chain due diligence obligations set out in the Regulation as well as keeping documentation demonstrating their respective compliance with those obligations, including the results of the independent third-party audits.
Recognition of supply chain due diligence schemes (Article 8): supply chain due diligence schemes can be submitted, by interested parties, to the Commission, in order to be recognised by Commission. The Commission will adopt delegated acts to set out the methodology and criteria allowing the assessment whether supply chain due diligence schemes facilitates the fulfilment of the requirements of the Regulation by economic operators and allowing the Commission to recognise schemes.
Management system obligations (Article 4)
Union importers of minerals or metals will have to:
Risk management obligations (Article 5)
Union importers of minerals will have to:
Third-party obligations (Article 6)
Union importers of minerals or metals will have to carry out audits via an independent third-party (‘third party audit’). However, Union importers of metals are exempted from this obligation as far as they can demonstrate that all smelters and refiners in their supply chain comply with the Regulation.
Guidelines and Commission’s list of conflict-affected and high-risk areas (Article 14)
The Commission, in consultation with the European External Action Service and the OECD, will prepare non-binding guidelines in the form of a handbook for economic operators, explaining how best to apply the criteria for the identification of conflict-affected and high-risk areas. This handbook will take into account the OECD Due Diligence Guidance.
The Commission will provide an indicative, non-exhaustive, regularly updated list of conflict-affected and high-risk areas.