GAO Says Due Diligence on Conflict Minerals Similar to Past Years
The Government Accountability Office said the result of its sample of companies that import minerals that could be contributing to conflict in the Democratic Republic of the Congo finds little change since 2015, both in the reasonable country-of-origin inquiry results and the due diligence results, and the challenges for companies trying to trace tin, gold, tungsten or other minerals back to the mine.
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The recently published GAO report said that 58% of companies that did a country of origin inquiry said in SEC filings required under Dodd-Frank rules on conflict minerals that their minerals may have come from the Congo or adjoining countries. Of those, 42% determined at least some of their minerals may have come from the countries considered risky for conflict minerals. About 16% determined their minerals were not from that part of Africa.
These percentages are similar to the SEC filings in 2015, 2016, 2017, 2018 and 2019, the report said.
"In 2020, an estimated 78 percent of the companies that conducted an RCOI went on to conduct due diligence to further investigate the source of their minerals," GAO auditors wrote. "After conducting due diligence, an estimated 44 percent of these companies reported that they could not determine whether their minerals originated in covered countries. An estimated 38 percent of the companies reported that their minerals may have originated in covered countries, and the remaining 18 percent did not clearly report their due diligence determination."
Only 4% of those companies that did due diligence were able to determine whether the minerals they purchased financed armed groups in Congo or neighboring countries.