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As we stated at first public comment, it is premature to set 7.3.3 as a “Required” level. We strongly request that 7.3.3 should be changed to an “Optional” level. If it should stay as Required Criteria, the numeral target (conformance rate “65%”) should be removed at least.

 

We would like to state that it is not considered appropriate to set numerical target for the following two reasons.

 

[1]Fairness issues regarding conformity among manufacturers

 

OECD guidance allows companies to determine specific risk assessment methods for due diligence of conflict minerals.

 

Thus, while some manufacturers survey more than 3000 suppliers for "all" parts and materials that consist of their registered products, others survey only a few dozen or so small suppliers for key components and materials only.

 

It is sure that the lack of unified method to set survey targets results in large differences in calculating the conformance rates among manufacturers, and then it causes significant problems in fairness in the conformity of this criteria.

As long as the survey target for the conformance calculation is not uniformed, numerical target should not be set.

 

If it is absolutely necessary to set numerical standards, it should be specified that “all” parts and materials which consist of the registered products should be covered for the survey and the conformance calculation.

 

[2]Changes in the compliance status of smelters/refiners are out of the manufacturer's control

 

The RMI, which operates the RMAP, frequently updates the validation/certification criteria for the smelters/refiners without notice, influenced by various circumstances, such as geopolitical risks, national sanctions and export and import regulations.

 

In fact, the ratio of RMAP's conformant smelters to the total number of 3TG smelters listed in the CMRT has been decreasing year by year. As shown in the attached table and figure made by JEITA (Japan Electronics and Information Technology Industries Association), the RMAP conformant rate initially increased steadily, but since 2017, has been decreasing gradually rather than increasing due to various influences. As of August 2023, the conformant rate of 3TG total is just 60.1%.  As the latest information in January 2024, the conformance rate was 60.3 %, which was not so changed from August 2023, but the rate continues low level.  We have serious concerns that there is possibility to decrease further in 2024.

 

Since it is impossible to predict what changes will occur in the future, the proposed 12-months grace period to improve participation rates is just a temporary measure and its effect is limited. The changes in the compliance status of smelters/refiners are out of the manufacturer's control. Considering further decreasing trend of the conformant rate in the future, we believe that non-conformant by the changes cannot be resolved even if grace period is set.

 

In particular, many of parts and materials used in imaging equipment products are required to be precise, specific, or customized/specialized, such as for unique driving mechanism not used for other product categories, so it is difficult to replace such parts and materials easily due to the necessary time including searching alternative suppliers, development and evaluation of substitute parts. Therefore, it means it is impracticable to switch the smelter used to raise the conformance rate even if such a grace period is set.

 

 

 

 

 

We strongly propose to change 7.3.3 to Optional criteria.

 

If it should stay as Required Criteria, we propose to change the beginning part of 7.3.3 as follows, in order to remove the numeral target (65%) as we explain it at our “Comment”:

 

“Manufacturer shall annually [DELETE: demonstrate that at least 65%] [ADD: disclose the percentage] of the total number of smelters/refiners from which manufacturer sources one or more 3TG minerals necessary to the functionality or production of registered products meet one or both of the following requirements: 

1. Smelters/refiners process only materials from recycled or scrap sources; and/or
2. Smelters/refiners participate in a validated responsible mineral chain-of-custody sourcing program(s) that aligns with the provisions for acceptable programs as defined below for at least the manufacturer’s most recent reporting year.

[ADD: Manufacturers also shall request their first-tier suppliers to use conformant smelters/refiners that are listed in the acceptable programs.]

 

The manufacturer may include … “

 

If neither of the above two proposals is accepted and if some numeral target should be set, we propose to add underlined texts as follows.

 

“…

The manufacturer may include active or in-process smelters/refiners in the percent conformance calculation for this criterion. “Active or in-process” means smelters and refiners that have committed to undergo an assessment by an approved program, have completed the relevant documents, and scheduled an on-site assessment to occur within the manufacturer’s reporting year, that meets the requirements of this criterion.

 

[ADD: In the conformance calculation, in principle, all parts and materials that consist of the registered products as of a certain reference date during the supplier investigation process shall be covered, and all identified smelters/refiners shall be counted as the denominator. Targeting only part of the product configuration, such as targeting major parts or materials, is not allowed. Also, manufacturer shall declare which responsible mineral chain-of-custody sourcing program and when the conformant smelter information is based on for the smelters that are the numerator in the conformance calculation.]

 

The list of smelters/refiners used to conform to this criterion shall be reported annually, either in the public disclosure made by the manufacturer in accordance with Criterion 7.3.1 Required – Public disclosure of due diligence processes for conflict minerals (3TG) in products and/or separately on the manufacturer’s website.

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