The implementation of the EU Conflict Minerals Regulation (2017/821) has continued to reshape supply chain governance, particularly for sectors where tin, tantalum, tungsten, and gold—so-called 3TG minerals—are essential inputs. Nowhere has this been felt more keenly than in the automotive industry, where Tier 1 suppliers find themselves navigating complex global sourcing relationships under intense scrutiny. The experience of third-party audits in 2021 offers, if not a definitive blueprint, at least a set of emerging best practices that procurement directors might do well to internalize as they work toward compliance and risk mitigation.
Third-party audits, especially those focused on conflict mineral due diligence, have revealed both progress and persistent challenges. The more forward-leaning Tier 1 suppliers have started integrating smelter and refiner data at a level of granularity that would have been rare even a few years ago. But gaps remain. One issue that cropped up repeatedly in 2021 was inconsistent verification of smelter Responsible Sourcing (RR) certifications. It’s worth stating plainly that a smelter’s self-declared compliance or a certificate issued by an unfamiliar agency is no longer sufficient—not in the eyes of regulators, customers, or indeed, a growing body of investors focused on supply chain ethics.
This is where the OECD’s open smelter list becomes indispensable. It’s freely available, regularly updated, and aligned with globally recognized standards. Yet, some procurement teams still overlook it or use it in a somewhat superficial way, checking smelters against the list only at the start of a supplier engagement. Best practice, as demonstrated by leading automotive suppliers in 2021, involves integrating the OECD list directly into supplier onboarding systems and conducting periodic re-verifications. This ensures that if a smelter’s status changes—for example, if its RR certification lapses or it is delisted—the procurement team is alerted and can take timely corrective action. In practice, this might mean building an automated matching process into existing procurement software or at least maintaining a regularly refreshed master list that feeds into risk review workflows.
What complicates matters, of course, is that smelters rarely sit neatly at the boundary of one company’s supply chain. They’re shared, often indirectly, across multiple Tier 1 and Tier 2 suppliers. This makes transparency both more difficult and more necessary. One of the audit practices gaining ground in 2021 was cross-referencing smelter data not only against the OECD list but also against declarations made by other companies operating in the same sector. Collaborative initiatives, sometimes informal, saw procurement teams pooling knowledge about high-risk smelters, creating a kind of informal early-warning system. It’s not perfect—nothing in this domain is—but it represents the kind of pragmatic, industry-level cooperation that regulators are increasingly expecting.
For procurement directors looking to strengthen their internal processes, consolidating audit findings into a centralized supply-chain risk dashboard should now be considered essential rather than aspirational. A functional dashboard does more than store reports or list supplier names. It allows decision-makers to track key indicators: which smelters are in use, their RR certification status, their country of operation, any red flags raised in audits, and even patterns that might hint at emerging risks. Developing such a dashboard isn’t without its challenges. Many firms have legacy systems, patchwork data sources, or simply a history of decentralized supplier management that resists easy consolidation.
That said, the steps to building a workable solution are reasonably clear, if not always straightforward to execute. The starting point is data gathering—bringing together the smelter and supplier data that exists in different parts of the organization, often held by different teams. Here, procurement directors may need to play a political as well as a technical role, securing buy-in from colleagues who may be wary of exposing data gaps or weaknesses. Once the data is gathered, it needs to be cleaned, standardized, and structured so that smelters can be matched unambiguously against external reference lists like that of the OECD.
From there, the dashboard can begin to take shape. Some firms opt for off-the-shelf solutions, often extensions of their existing ERP or compliance software. Others build bespoke tools, using platforms like Power BI or Tableau, which offer flexibility and visualization capabilities but demand internal technical expertise. Either way, the goal is to produce a system that’s usable not only by compliance specialists but also by senior management, who increasingly need to understand supply chain risk at a glance.
It’s worth pausing here to note that even the best-designed dashboard isn’t a silver bullet. The quality of insights it delivers will depend on the quality and timeliness of the data feeding into it. In 2021, some firms were caught out because their systems, while well-intentioned, relied on supplier self-reporting that was neither audited independently nor updated regularly. Third-party audit reports need to be treated as living documents, revisited and refreshed as circumstances change, rather than archived and forgotten once the initial review is complete.
Perhaps the most encouraging lesson from 2021 is that best practice is evolving—and that firms which engage openly with external standards, whether those of the OECD, the London Bullion Market Association, or industry peer groups, tend to find themselves better prepared when audit teams arrive. There is no one-size-fits-all model for managing conflict mineral risk, but there is a growing consensus about the need for rigorous, data-driven approaches that connect the dots between supplier declarations, audit findings, and real-world smelter behavior. And while dashboards, checklists, and automated tools can all help, success ultimately depends on a culture of diligence that starts at the top of the organization and extends throughout the procurement function.