Conflict Minerals Webinar. Impacts of SEC Regulations in the Electronics Industry

Transcription

1 Conflict Minerals Webinar Impacts of SEC Regulations in the Electronics Industry

2 SiliconExpert Panelist Tierney Powers Account Executive (415)

3 Asking Questions Ask questions during the webinar by using the Questions window Questions will be addressed at the end of the webinar Any question we do not get to will be answered individually by The presentation will be sent to you after the webinar Please respond to the survey questions at the end of the webinar

4 Agenda Agenda SiliconExpert Introduction Michael Rohwer- EICC Tierney Powers- SiliconExpert Questions & Answers 5 minutes 30 minutes 20 minutes 5 minutes

5 About Us Leading OEMs, Distributors, Suppliers & EMSs use SiliconExpert Daily Our Electronic Component Database of over 250 million components powers our: o Comprehensive software tools o Integrated solutions o Professional services

6 Reactive Our Database vs. Proactive Approaches to Obsolescence Management 250 Million+ Orderable Part Numbers Up to 42 Parametric values/product line Risk Analysis & Obsolescence Forecasting Algorithms developed with CALCE Environmental Data tracked: EU & China RoHS, REACH, WEEE compliance & Material Declarations Parametrically-derived cross-references for millions of parts

7 Reactive vs. Proactive Approaches to Obsolescence SiliconExpert Management & Conflict Minerals Data Collection Conflict Mineral Module Most Up to Date Conflict Mineral Statuses -Over 1,800 suppliers All Documents & Templates -EICC, COC, Conflict Minerals Policy, Responsibility Report, History Search by Supplier/Smelter Name - Access to smelter & mining information * EICC stands for: Electronic Industry Citizenship Coalition * COC stands for : certificate of compliance (company statement)

8 Today s Expert Panelist Michael Rohwer Project Manager at EICC (Electronic Industry Citizenship Coalition) mrohwer@eicc.info

9 Conflict-Free Sourcing Initiative Compliance The Conflict-Free Sourcing

10 Obligations 3 major bodies of work address conflict minerals reporting: The United States Dodd-Frank Act of 2010 The related Securities and Exchange Commission final rule on compliance with Dodd-Frank (SEC final rule); and The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance) Future EU Regulation ( ) 2

11 UPDATES! The Conflict-Free Sourcing 3

12 CFSI s Response The CFSI is committed to improving conditions in the supply chain. Mining activities that fuel conflict are unacceptable. In order to help companies meet reporting obligations and to source conflict-free minerals the following actions are undertaken: Supporting in-region sourcing schemes to enable future legitimate trade from DRC and surrounding countries Implementing Conflict-Free Smelter Program (CFSP) that requires OECD guidance to aid in the identification of smelters and refiners that have sourced conflict-free minerals Developing the Conflict Minerals Reporting Template (CMRT) to help companies gather due diligence information in a common format Engaging with multiple industries for collaboration and efficiency Conflict Free Sourcing Initiative (CFSI) 4

13 CFSI Approach to Conflict-Free Sourcing Finished Product MINE SMELTER/REFINERY OEMS (pinch point) In-Region Schemes Conflict-Free Smelter Program (CFS) Company Assurance Conflict Free Sourcing Initiative (CFSI) 5

14 Compliance: Program Elements High-level Compliance Steps 1. Company Conflict Minerals Program Framework 2. Identify and Assess Risk in the Supply Chain 3. Risk Management 4. Smelters or Refiners 5. Report 6. Implement Program Improvements and Repeat

15 Compliance: Step 1 Company Conflict Minerals Program Framework Build a company management system: Identify functional areas to support CM program Adopt a policy and expectations for your suppliers Implement internal controls Training IT Systems Contracts Customer Response Communications Collect data on products and suppliers which contribute those necessary conflict minerals to the products

16 Compliance: Step 2 Identify and Assess Risk in the Supply Chain Collect supplier data Conduct a supply-chain survey (CMRT) Review and respond to unreasonable responses Assess CFS information for RCOI determination Potential validation information resources Other recognized industry approach Participation in in-region sourcing program(s) Information attained from industry initiative program(s) Information attained directly from a smelter Other indirect information (smelter location)

17 Compliance: Step 2 Continued Make Covered Country sourcing conclusions from all applicable information sources Aggregate smelter/refiner data Determine smelter/refiner s information: Country of origin information (CC or non- CC) Utilize CFSP or other recognized industry approach Solely recycle/scrap

18 Compliance: Step 3 Risk Management If the smelter or refiner (SoRs) sources from covered country or unknown implement OECD Due Diligence Compare smelters to CF independent audit program reference lists (e.g. CFS, LBMA, RJC) DRC CF: Listed smelters DRC conflict undeterminable: smelters not yet listed Identify additional/future activities to improve DD Goal: identify smelters and rely on industry program

19 Compliance: Step 3 Continued Identify program improvement to support better data gathering Strategize how to improve supplier survey response rate and accuracy Identify and execute strategies to increase smelter/refiner participation in independent 3 rd party validation audits Modify database to meet changing compliance requirements

20 Compliance: Step 4 Utilize CFSP to determine Country of origin information for successfully audited SoRs Conflict-Free status information For example: If a product s supply chain SoRs are all CFS validated, then may be reported as conflict-free in CMR

21 Reporting: Step 5 If you ve already determined that the SEC Rule applies, conducted your RCOI and DD: Report via Form SD (and CMR as required) Goal: Transparency of sourcing information Form SD template provided within the SEC Final Rule. pg. 344 Report(s) to be filed...no later than May 31 after the end of the issuer s most recent calendar year. pg. 345 Report must be signed by the registrant on behalf of the registrant by an executive officer. pg. 346

22 Reporting: Form SD Under a separate Conflict Minerals Disclosure heading If you have established that a large majority of CM in your supply base did not originate in the covered countries or were from scrap or recycled materials Briefly describe the RCOI Otherwise, all substantive content should be contained in the CMR In either case, the information must be posted in a public website and a link to the posting must be included on Form SD

23 Reporting: CMR Company s CM Policies conform in all material respects to a nationally or internationally recognized due diligence framework For products not found to be DRC conflict free, 1. Provide description of product(s) 2. Smelter/refiner facilities used to process CMs 3. Country of origin of the CMs in those products 4. Efforts to determine mine or location of origin Likewise for products which are DRC conflict undeterminable, 1. Provide description of product(s) 2. Smelter/refiner facilities used to process CMs, if known 3. Country of origin of the CMs in those products, if known 4. Efforts to determine mine or location of origin 5. Steps to mitigate the risk that its CMs benefit armed groups (including steps to improve due diligence)

24 Reporting: SD or Both SD &CMR? Audit or No Audit? Determination by Registrant Scenario Result File Necessary CMs are from outside the covered countries and/or solely from recycle/scrap 1 DRC conflict free Form SD Know (or have reason to believe) necessary CMs originated from a conflict free sources including from within the covered countries Know (or has reason to believe) necessary CMs originated from within the covered countries and are not (or may not be) from recycle/scrap sources Know (or have reason to believe) necessary CMs originated from a conflict source within the covered countries 2 DRC conflict free Form SD & Audited CMR 3 DRC conflict undeterminable 4 DRC conflict free & DRC conflict undeterminable 5 Not found to be DRC conflict free Form SD & CMR Form SD & Audited CMR Form SD & Audited CMR

25 Compliance: Step 6 Do it all again next year And do it better!

26 Questions? Thank you

27 SiliconExpert Panelist Tierney Powers Account Executive (415)

28 Environmental Team Definition of Conflict Minerals Defined by Dodd-Frank Act Section 1502(e)(4) Tantalum, Tin, Tungsten, and Gold A mineral is conflict free if it did not originate in the DRC or surrounding countries The first report is due on May 31, 2014 for the 2013 calendar year and then annually.

29 Conflict Mineral Status

30 Parts that Contain 3TG Minerals Parts containing 3TG minerals are not necessarily DRC Conflict Free

31 Conflict Minerals Process SiliconExpert Research and Analysis

32 New Module: Conflict Minerals Live Demo Portion

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35 Q&A Session Q&A If we do not get to your question in this 1 hour allotted time period, we will respond personally via following this broadcast Contact Information: Tierney Powers Account Executive (415) tierney@siliconexpert.com Michael Rohwer Project Manager at EICC (Electronic Industry Citizenship Coalition) mrohwer@eicc.info

36 Upcoming Webinar May 22 nd 10am Pacific Time Fern Abrams & Stephanie Voyles from IPC Register: