AIAG Members Help Automakers and Suppliers Comply with Dodd-Frank Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 includes new regulations targeting so-called "conflict minerals" minerals that are sourced from unstable regions of the Democratic Republic of Congo (DRC) and surrounding countries.

The legislation requires publicly-traded and electronic companies to submit an annual report outlining what they are doing to ensure that the minerals they're using tin, tantalum, tungsten and gold, in particular are "conflict-free."

That's not an easy task. Manufacturers typically use huge volumes of raw materials sourced from various different suppliers. Today's supplier networks are global, interconnected and enormously complex, and it's clear that compliance with the Dodd-Frank Act is going to be a daunting challenge for most companies.

Fortunately, members of AIAG, a not-for-profit organization that works collaboratively with a wide range of manufacturing companies, suppliers and service providers, are actively engaged in a work group that is developing an industry solution to help automakers and suppliers meet requirements of the act.

AIAG says its solution will help companies understand the due diligence required and encourage transparency in the supply chain to enable compliance.

"Global sourcing lacks transparency, and decisions made by one small company can have ripple effects on larger manufacturers, which will make compliance with the Dodd-Frank Act a difficult but not insurmountable challenge," J. Scot Sharland, executive director of AIAG, said. "Our project will develop common solutions that the entire industry can adopt quickly and efficiently because it will be a joint effort by automakers and suppliers, who will dive into the supply chain process and draw on the experience of other industries to indentify best practices."

Back in December, the US Securities and Exchange Commission released proposed rules on conflict minerals. Final rules are expected in April 2011.