For the compliance sector, 2016 was a critical year.
It was a year in which regional government bodies around the globe took on greater responsibility as gatekeepers of environmental and human rights standards in the corporate sector. It was also the year of the investor, where corporate decision makers became more concerned with transparency and accountability in supply chains. Finally, 2016 was most certainly a year in which consumer awareness and subsequent purchasing choices signaled a growing unwillingness to support unethical and unsustainable sources of labor and materials in the supply chains of the companies they buy from.
Combined, these themes have placed mounting pressure on the corporate sector, requiring companies to comprehensively survey their supply chains for hidden vulnerabilities. For these reasons and more, 2016 was a massive year in the compliance field. Here’s a look back at the top ten headlines from the Assent Compliance blog this past year.
1. ECHA Agrees on New SVHCs for January 2017 Candidate List
The Member State Committee (MSC) of the European Chemicals Agency (ECHA) agreed on five Substances of Very High Concern (SVHCs) to be included in the Candidate List update for the REACH regulation. Benzo[def]chrysene (Benzo[a]pyrene) was added in June, and the following four substances were added in December 2016:
- 4,4′-isopropylidenediphenol (bisphenol A)
- nonadecafluorodecanoic acid (PFDA) and its sodium and ammonium salts
- 4-heptylphenol, branched and linear (4-HPbl)
- 4-tert-pentylphenol (PTAP)
In addition, further consultation will occur for two other proposed substances (4-tert-butylphenol PTBP] and benzene-1,2,4-tricarboxylic acid 1,2-anhydride [trimellitic anhydride, TMA]) throughout 2017. Click here to see our recent blog post on these updates.
2. SEC Concedes on Conflict Minerals Compliance Ruling
In March, the U.S. Securities and Exchange Commission’s (SEC) legal battle against the National Association of Manufacturers (NAM) was brought to a halt when the SEC decided not to pursue a review of a previous U.S. Court of Appeals ruling regarding conflict mineral disclosures in the corporate sector.
This ruling had found a certain conflict mineral rule under Section 1502 of the Dodd-Frank Act qualified as compelled speech under the First Amendment in requiring companies to disclose whether their products were linked to the DRC conflict. The rule was therefore deemed unconstitutional. Read more about this major decision here.
3. Human Trafficking and Modern Slavery In the Headlines
During the past year, a number of high-profile court cases involving forced labor have made headline news. For example, in June a California Federal Court ruled that a number of U.S. and international companies supplying seafood to Walmart and other buyers would be taken to court over the alleged use of human trafficking in their supply chains. Earlier in 2016, UK retailers were accused of exploiting Syrian refugee workers in their supply chains. Meanwhile, a factory fire in India shocked the corporate conscience, highlighting the importance of due diligence in the supply chain.
These events caused many companies to take steps to mitigate risk and end labor rights violations in their own supply chains. In 2017, companies will continue their push for stronger diligence in the face of mounting pressures from regulatory bodies, governments and the public.
4. Due Diligence Will Be Mandatory Under EU Conflict Minerals Regulation
After months of negotiations, the European parliament announced in November that under the EU’s conflict mineral regulation, due diligence would be mandatory for all importers of conflict minerals to the region. Prior to this decision, due diligence was only expected to be voluntary, yet members of parliament had long been pushing for tighter requirements. The next step for the EU’s conflict mineral regulation is a full house vote early in 2017, which will set a strong tone for upcoming due diligence standards in EU countries and around the world.
5. Assent Compliance Welcomes $20 million In Funding
After a wildly successful capital growth round, Assent Compliance generated $20 million in funding to continue the company’s drive for innovation and excellence in the supply chain regulatory compliance space.
The investment was led by Boston-based Volition Capital with participation from OpenText Enterprise Application Fund (OTEAF), the Business Development Bank of Canada (BDC), the Industrial Research Assistance Program (IRAP), the Royal Bank of Canada (RBC) and private investors.
This funding has enabled Assent Compliance to continue to invest in its industry-leading compliance platform and increase the number of team members across all divisions. You can read more about this here and here.
6. Conflict-Free Sourcing Initiative Releases CMRT 4.20
The Conflict-Free Sourcing Initiative (CFSI) released the Conflict Minerals Reporting Template (CMRT) 4.20, an upgrade to its industry-standard conflict mineral data collection template (previously version 4.10).
Version 4.20 includes updates to the CFSI’s Smelter Reference List. The Smelter Reference List is the list of smelters that meet the CFSI’s definition of a legitimate smelter or refiner. A total of 17 facilities were removed from this list, and nine were added. For more, click here.
7. U.S. Customs Closes ‘Consumptive Demand’ Loophole on Forced Labor
In February 2016, President Barack Obama signed the U.S. Trade Facilitation and Trade Enforcement Act which closed a critical loophole in the 1930 Tariff Act’s provision against forced labor. This loophole had previously meant companies using forced labor in their supply chains could circumvent the Act by claiming there was a “consumptive demand” for the product, meaning national demand exceeded national production capacity.
The U.S. Customs and Border Protection Agency filed its first withhold release order on March 29th and has since issued a number of others.
8. Launch of Assent’s Supply Chain Summit Series
Assent’s inaugural Supply Chain Summit Series kicked off in Chicago on October 20th, attracting compliance specialists from across the U.S. The second event in the series was held on November 17th in Boston, and another is fast-approaching in San Jose in February.
The Supply Chain Summit Series is revolutionary in the way it brings companies and their suppliers together in one room, and delivers real-world solutions developed by industry leaders. With a tailored agenda full of expert speakers and workshops on supply chain compliance, due diligence and education, attendees in Chicago and Boston walked away with up-to-date industry insights and a wealth of peer support. Places at the February 2017 San Jose Summit are filling fast, so find out more and register before it’s too late.
9. 2016 Top 100 Conflict Mineral Influence Leaders
Michael Loch, President of Responsible Trade, was named the top conflict mineral influence leader as part of Assent’s 2016 Top 100 Conflict Mineral Influence Leaders list. The list seeks to recognize individuals — from compliance specialists, corporate executives and government officials, to NGO workers and reporters — who work tirelessly to shape supply chain excellence through their industry influence.
The list was curated by independent researcher Lucas Taylor, MBA (Notre Dame) of LDT Consulting, and was an outstanding success. In total, 50 nominations were received and over 3,000 votes were counted.
10. Assent University Launches
In October 2016, Assent Compliance launched Assent University — a compliance learning management system that allows companies to educate their employees and suppliers about key compliance principles. The online courses and resource library is available in multiple languages, and combines cutting-edge technology with educational resources to provide companies and suppliers with robust compliance education. Topics covered include conflict minerals (CM), anti-human trafficking (AHT), restricted substances, anti-bribery and anti-corruption (ABAC), and more. Click here to visit Assent University.
It has been another big year for Assent and the compliance industry as a whole. As we look toward 2017, compliance specialists could expect to see even tighter regulations in areas related to conflict minerals, modern day slavery and human trafficking, ABAC and more. Join us later this month as we take a look at what the coming year might hold for you and your compliance team.