The Conflict-Free Smelters (CFS) Program of the Electronics Industry Citizenship Coalition (EICC) and Global E-Sustainability Initiative (GeSI) seeks to end supply chain support for the sale of illicit minerals from Eastern DRC and the surrounding region.  As smelters/refiners (smelters) build systems and demonstrate compliance with the provisions of the EICC-GeSI Conflict-Free Smelter (CFS) Program, they may encounter transition or start-up costs associated with participation in the program.  It is recognized that these costs may be most significant to small and medium smelting enterprises.  The CFS Early-Adopters Fund is designed to offer smelters an extra incentive for early participation by helping to offset these transitional costs.

Program Goal

The goal of the CFS Early-Adopters Fund is to support responsible minerals sourcing and “conflict-free” compliance by encouraging smelters to participate in the CFS Program.

Concept

Participation in the CFS Early-Adopters Fund is voluntary.  The Fund will provide an incentive to each smelter company that successfully passes its initial CFS assessment, as confirmed by the CFS Audit Review Committee (ARC).

Smelters that are found compliant with the CFS Program protocol are eligible for an incentive as long as funds remain in the program.  The incentive will be one-half the cost of the first successful assessment, up to $5,000 for each eligible smelter company.  All smelter companies who have already passed their initial assessment will be eligible to apply for funds.  In order to encourage CFS participation among as many companies as possible, each smelter company is eligible for only one incentive (rather than being eligible for each successful assessment across multiple facilities).

Support for the Fund is currently provided by Intel ($150,000), HP is ($50,000), and the GE Foundation ($25,000).  Others are encouraged to participate financially.  This Fund is one of a number of programs being advanced to promote responsible sourcing in supply chains.

Program Management

RESOLVE will manage the Fund and incentive disbursement in order to ensure independence from the sponsoring organizations.

To support transparency, RESOLVE will report to the ARC and sponsors on a monthly basis and will also consider an appropriate schedule for periodic reporting to stakeholders through the CFS Program website and this CFS Early-Adopter Fund website.

The expected timeline for this pilot program is one year (March 2012 to March 2013), or until all funds are disbursed.  At that time, RESOLVE will seek input from stakeholders and corporate sponsors; this input will be incorporated into a brief final report, which RESOLVE will draft and share first with the sponsors, and then with the public (via the CFS website).

Application Instructions and Additional Information

For instructions on how to apply, please visit here.

For answers to frequently asked questions, please visit here.

Other Considerations

The CFS Early-Adopters Fund is designed to include a number of anti-corruption and anti-fraud measures.  A third party program manager (RESOLVE) helps ensure the Fund’s independence.  RESOLVE will set the ground rules and will ensure equal treatment of all smelter companies, irrespective of company ownership. RESOLVE will refer to EICC and GeSI authorized 3rd party, independent audit firms in order to qualify smelters for participation.

RESOLVE will agree to and abide by respective anti-corruption and anti-fraud terms and conditions as set forth by the sponsors:

  • Payment will only be made to legal company entities, not to individuals, and to accounts within the country of the company’s facility location.
  • Eligibility will include allowance for such a payment by the governing laws of the company’s facility location and on the entity’s structure (government versus non-government owned/managed, as applicable).

The CFS Early-Adopters Fund and RESOLVE’s Solutions Network

Because sponsors and other stakeholders are interested in better understanding supply chain dynamics, the Fund will be organized as a pilot program housed at RESOLVE’s Solutions Network.  While being managed by RESOLVE, the Fund will be incorporated into the work of the EICC and GeSI joint Extractives Workgroup and the CFS Program processes, which will enable more companies to easily contribute to the Fund and encourage responsible sourcing.  Approximately one year into the pilot program, RESOLVE will invite key stakeholders to review the program results and help determine how to further strengthen efforts to support capacity building in the supply chain for conflict-free minerals.