Average cost to issuers has dropped over past three years
OTTAWA, Feb. 24, 2017 /CNW/ - The average cost of the compliance of section 1502 for SEC issuers has dropped by 45% over the past three years. The average cost for the core elements of ongoing compliance to Section 1502 have dropped below $20K USD per issuer for the 2016 reporting period, from an average cost of $35K USD per issuer for the 2014 reporting period. Based on the approximate 1,223 issuers for the 2015 reporting period, this places the total core cost of ongoing compliance to Section 1502 of Dodd-Frank at $23M.
The cost reduction is stemming from increasing process efficiency, improved standardization across the industry, amortization of initial compliance investments, and normal cost cutting strategies employed by electronics manufacturers.
The compliance cost above is based on an average issuer completing the main requirements of compliance to section 1502 of Dodd-Frank: Supplier and smelter RCOI, smelter due diligence, compliance to the OECD due diligence guidance, and reporting to the SEC. Not included in the costs are responding to customer inquiries, internal staff that spend less than 20% of their time on conflict minerals, companies taking a leadership role with the CFSI, and any other activities that are not core to the compliance requirements of Section 1502. In particular, the leadership role adopted by key SEC issuers would result in a noticeably higher cost for those leading companies.
About Claigan Environmental (www.claigan.com)
Claigan has been the leader in conflict minerals compliance since the inception of Section 1502. Claigan has appeared before the US subcommittee on International Policy and Trade to discuss conflict minerals compliance costing, and Claigan's original cost estimates for compliance to Section 1502 are quoted in the SEC Final Rule on Conflict Minerals.
SOURCE Claigan Environmental Inc.