Hartford conglomerate United Technologies Corp. – through its supply chain – may have funded an armed conflict in central Africa responsible for grave human rights violations, according to a UTC filing Monday with U.S. Securities & Exchange Commission.
UTC said 17 of its direct suppliers manufactured products in 2013 using conflict materials from either the Democratic Republic of Congo or one of 10 surrounding countries.
However, UTC said its due diligence into the matter could not prove or disprove whether the conflict minerals from the African nations ended up in the final products made by UTC’s subsidiaries in 2013.
The SEC this year started requiring that publicly traded companies determine whether any of their products contained any of four identified conflict minerals – gold, tungsten, tin, tantalum. If so, the companies had to check whether those minerals came from central Africa, and if they did, whether they funded the armed conflict in the region. London nonprofit Global Witness, which pushed for the SEC rule, said the sale of these minerals in the area surrounding the Congo has funded armed groups responsible for the rape, murder, and pillage of civilians in the region.
UTC said the conflict minerals in question – which are available in many places other than central Africa – are necessary to the production of its goods. Through its subsidiaries, UTC manufacturers products such as jet engines, elevators, and air conditioners, and the conglomerate has made a specific point to create products that are as energy efficient as possible.
To follow the SEC’s rule, UTC sent surveys about conflict minerals to 1,681 suppliers representing $9 billion in spending by the company. Of those, 909 sent surveys back, and 17 said they used conflict minerals from the Congo and the surrounding area.
As the Monday deadline for filing the conflict mineral reports loomed, Global Witness said most publicly traded companies did not perform adequate due diligence to determine whether the manufacture of their products funded the Congo conflict. The nonprofit said companies like UTC must step up their effort to prove they are sourcing their supplies responsibly.
To improve its efforts with its suppliers, UTC said in its filing that it will send out more surveys to more suppliers, reach out to the suppliers who didn’t respond the first time, and participate in industry initiatives to improve best practices for checking supply chains for conflict minerals.
“UTC supports legislation in place to control the illegal trade of conflict minerals, and has efforts in place to reduce the risk that minerals used in UTC products contribute to the violence in the Democratic Republic of Congo region,” UTC spokeswoman Kate Ruppar said. “UTC’s compliance efforts include, among other things, requiring UTC suppliers to comply with the conflict minerals rule and to support UTC in fulfilling its obligations under the rule, including providing UTC with information regarding the country of origin of the conflict minerals that it provides to UTC.”
