The CMRT procedure involves the standardized process of reporting on conflict minerals within a company's supply chain to ensure responsible sourcing.
The Conflict Minerals Reporting Template (CMRT) is a free, standardized reporting template developed by the Responsible Minerals Initiative (RMI) that facilitates the exchange of information regarding the sourcing of "conflict minerals"—specifically tin, tantalum, tungsten, and gold (3TG). Companies use the CMRT to disclose information about the smelters and refiners in their supply chain and their due diligence efforts to determine if these minerals originated from conflict-affected and high-risk areas (CAHRAs) and funded armed groups.
Understanding the CMRT Procedure
The CMRT procedure is a critical component of supply chain due diligence, designed to help companies comply with regulations like the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act, Section 1502, and similar international mandates. It aids in transparency and responsible sourcing practices by providing a common framework for data collection and sharing.
Step-by-Step Guide to Completing the CMRT
Completing the CMRT typically follows a structured process to ensure accuracy and compliance. This process often involves collaboration across various departments, including procurement, legal, and sustainability.
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Obtain the Latest Template:
- Action: Companies must first access the most current version of the CMRT. This template is regularly updated by the RMI to align with evolving standards and best practices. It's crucial to download the latest iteration directly from the RMI website to ensure compliance with current reporting requirements.
- Insight: Using an outdated template can lead to non-compliance or requests for resubmission, causing delays in reporting.
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Gather Company Information:
- Action: The next step involves compiling essential company details. This includes accurate contact information, the specific reporting year, and other relevant identifying data for your organization.
- Insight: This foundational information ensures that the report is properly attributed and can be traced back to the submitting entity, forming the basis of the conflict minerals declaration.
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Identify In-Scope Products and Suppliers:
- Action: Determine which products manufactured or contracted to be manufactured by your company contain or may contain 3TG minerals. Then, identify the suppliers involved in producing these components.
- Insight: This requires a thorough review of your Bill of Materials (BOM) and direct engagement with your immediate (Tier 1) suppliers.
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Distribute and Collect CMRT from Suppliers:
- Action: Send the CMRT to your relevant suppliers, requesting them to complete it for their products and supply chains. Track responses and follow up as needed.
- Insight: This is often the most time-consuming part of the process, as it relies on the cooperation and diligence of upstream suppliers. Many companies use specialized software to manage this outreach efficiently.
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Review and Consolidate Supplier Responses:
- Action: Upon receiving completed CMRTs from suppliers, review them for completeness, accuracy, and consistency. Consolidate the data into a master CMRT for your own company.
- Insight: This step involves identifying declared smelters and refiners (SMRs) and checking them against industry lists of compliant or conformant SMRs (e.g., those audited by the Responsible Minerals Assurance Process - RMAP).
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Conduct Due Diligence and Risk Assessment:
- Action: Based on the consolidated data, assess the risks associated with the identified SMRs. If any SMRs are found to be non-conformant or have high-risk flags, further due diligence is required. This may involve engaging with those SMRs or exploring alternative sourcing.
- Insight: The goal is to identify and mitigate risks of sourcing from SMRs that might be funding conflict or involved in human rights abuses.
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Generate Company CMRT and Declaration:
- Action: Populate your company's consolidated CMRT with the collected and verified data. This includes your conflict minerals policy, product declarations, and a list of identified SMRs. Formulate your conflict minerals declaration (e.g., "DRC Conflict-Free," "Not DRC Conflict-Free," or "DRC Conflict Undeterminable").
- Insight: The declaration is a formal statement of your company's status regarding conflict minerals sourcing.
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Report and Publish (if applicable):
- Action: If subject to regulatory requirements (e.g., SEC filing for publicly traded U.S. companies), submit the conflict minerals report (typically a Form SD) and the completed CMRT (often as an exhibit).
- Insight: Companies may also publish their CMRT or a summary of their due diligence efforts on their website for transparency.
Key Sections of a CMRT
A typical CMRT is structured to gather specific information efficiently:
| Section | Description |
|---|---|
| Declaration Tab | Company information, contact details, reporting year, and the company's declaration regarding conflict-free status. |
| Smelter List Tab | A comprehensive list of identified smelters and refiners in the supply chain, including their unique RMI ID, facility name, country, and status (e.g., conformant). |
| Product Tab | Information about the products covered by the report. |
| Revision History | Tracks changes and updates to the template itself. |
| Instructions/Definitions | Provides guidance and clarifies terms used within the template. |
Importance and Benefits
The CMRT procedure is crucial for several reasons:
- Regulatory Compliance: It helps companies meet the requirements of conflict minerals regulations globally.
- Supply Chain Transparency: Enhances visibility into the origins of raw materials, promoting ethical sourcing.
- Risk Management: Identifies and mitigates risks associated with sourcing from conflict-affected areas.
- Reputation Management: Demonstrates a commitment to corporate social responsibility (CSR) and ethical business practices, enhancing brand image.
- Customer and Investor Confidence: Provides assurance to stakeholders that the company is taking steps to avoid contributing to conflict.
By following the CMRT procedure, companies contribute to a more responsible and sustainable global supply chain for vital minerals.
