Certificate of Volatility
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Conflict Minerals Report December 2019 Background Information The purpose of ViewSonic’s global efforts to promote Corporate Social Responsibility, as detailed within ViewSonic’s Environmental Policy Statement, is to support the protection of human rights. ViewSonic strongly supports the Responsible Business Alliance (“RBA”), formerly the Electronic Industry Citizenship Coalition, and the Global e-Sustainability Initiative (“GeSI”). ViewSonic is also a member of their jointly-founded Responsible Minerals Initiative (“RMI”), formerly the Conflict Free Sourcing Initiative. We help our suppliers’ source conflict- free minerals through the tools and resources developed by the RMI, including the Responsible Minerals Assurance Process (“RMAP”), formerly the Conflict-Free Smelter Program. In addition, the RMAP developed the Conflict Minerals Reporting Template (“CMRT”) to standardize the collection and transfer of information through the supply chain regarding the mineral’s country of origin and the identity of smelters and refiners being utilized. Our first-tier key suppliers are requested to disclose and timely update information on smelters and mines via CMRT. The suppliers are audited annually by an independent third party. Our procurement policy requires our suppliers to source for tantalum, tin, tungsten, and gold (or “3TG”) from facilities or smelters that have “conflict-free” designation from a reputable source, such as the RMI. Reasonable Country of Origin Inquiry ViewSonic conducts a Reasonable Country of Origin Inquiry (“RCOI”) for Conflict Minerals that are included in our products by reviewing available resources such as bills of material, product specifications, design documents, and component management systems to make preliminary determination of Conflict Minerals content. Our Engineering and supply chain personnel participate and contribute to our knowledge of product material content. We determine if Conflict Minerals that are included in our products are Democratic Republic of the Congo or surrounding countries (the “Covered Countries”) based on information we have received from our direct suppliers in the due diligence process. If the Conflict Minerals originate in the Covered Countries, we will determine if the minerals originate from sources which support the armed groups in the region. ViewSonic conforms to OECD Due Diligence Guidance for Responsible Minerals Supply Chains: Step 1: Establish Strong Company Management Systems ViewSonic adopted a Conflict Minerals Policy, which is available on our company website at https://www.viewsonic.com/us/company/green/go-green-with-viewsonic/#minerals-policy. ViewSonic expects the following from its suppliers: (a) Adopt a policy of responsible sourcing of minerals and pass this requirement through its supply chain; (b) Implement due diligence processes to support that policy; (c) Source materials from socially responsible suppliers; and (d) Complete and return the CMRT and all requested information to ViewSonic timely. ViewSonic’s Conflict Minerals Policy sets forth a grievance mechanism for concerns and violations. Concerns or violations may be reported to ViewSonic’s Sourcing Review Board. ViewSonic also established a management review committee to oversee ViewSonic’s conflict minerals programs like TCO certification program. ViewSonic established a multi-disciplinary working group of supply-based compliance owners to implement ViewSonic’s conflict minerals program under the oversight of the management review committee. 10 Pointe Drive, Brea, California 92821 http://www.viewsonic.com Step 2: Identify and Assess Risk in the Supply Chain In 2019, ViewSonic identified 9 first-tier LCD Monitor suppliers that may have incorporated one or more of the Covered Minerals. ViewSonic requested these suppliers to submit the CMRT, including all smelter/refinery information for any of the Covered Minerals contained in their products. ViewSonic had evidence to suggest that Covered Minerals included in its products may have originated in the Democratic Republic of Congo, or from an adjoining country, or are not from recycled or scrap sources. Therefore, in accordance with the OECD Rule, ViewSonic undertook due diligence measures on the source and chain of custody of Covered Minerals included in its products, as described below. Due Diligence Design of Due Diligence ViewSonic designed its due diligence measures in conformance with the due diligence related steps of the Organization for Economic Co-operation and Development (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, as further set forth in the specific guidance for downstream companies contained in the supplements on tin, tantalum, tungsten, and gold (the “OECD Guidance”). Due Diligence Measures Performed Step 3: Design and Implement a Strategy to Respond to Identified Risks ViewSonic identified acceptance criteria to be used when reviewing CMRTs submitted by suppliers and manufacturers. CMRTs that satisfied the acceptance criteria will be reviewed to compare the smelters/refiners identified against the list in the CFSP to assess whether the suppliers and manufacturers are using conflict- free smelters and refiners. In 2019, we investigated the 279 supplier-reported 3TG facilities. The results are as follows: 89% are 3TG compliant; 4% is active; 7% are others as provided in the Chart 1 below. The Appendix 1 to this Conflict Minerals Report lists the facilities identified by suppliers and manufacturers we surveyed. Chart 1 – 3TG Due Diligence Distribution Active 2.3% Other 7.0% Conformant 90.7% Other 7.7% Tungsten Conformant Active 1.3% 88.7% Tin Gold Conformant 91.0% Tantalum Active 7.9% Other 4.4% Other 11.4% Conformant 88.6% 10 Pointe Drive, Brea, California 92821 http://www.viewsonic.com ViewSonic implemented follow-up procedures with suppliers whose CMRT did not satisfy our expectations and acceptance criteria. In addition, ViewSonic also has an escalation procedure for suppliers and manufacturers who missed the CMRT submission deadline. Suppliers and manufacturers who missed the deadline would receive adverse rating and/or corrective actions. Comparing to year 2018, the conformant smelter rate is risen from 80.9% to 89.2%, active smelter rate is from 1.3% to 3.9%, and others (Not applicable, Non conformant) is decreased from 17.8% to 6.8%. Check Chart 2 below for year-over-year improvement progress. Chart 2 – 3TG Due Diligence KPI Other 6.8% (-11.0%) 17.8% 3.9% Active 2019 (+2.6%) 1.3% 2018 Conformant 89.2% (+8.4%) 80.9% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Step 4: Support the Development and Implementation of Independent Third-Party Audits As stated with the “Background Information,” ViewSonic supports an industry-wide initiative to perform independent third-party audits of the due diligence and procurement activities of smelters and refiners. We have been a participating member with the CFSI since 2016. http://www.responsiblemineralsinitiative.org/about/members-and-collaborations/ Step 5: Report Annually on Supply Chain Due Diligence ViewSonic publishes the Conflict Minerals Report on its home website annually at https://www.viewsonic.com/us/company/green/go-green-with-viewsonic/#minerals-policy. Cobalt Beginning in 2019, ViewSonic started incorporating cobalt into investigation program beyond 3TG. Cobalt is widely used in lithium-ion batteries but rare in our display products except some part dyeing process. Similar to 3TG, we use a standardized Cobalt Reporting Template (CRT) developed by the Responsible Minerals Initiative (RMI) to collect and understand data from the cobalt supply chain. And follow OECD Due Diligence Guidelines for cobalt due 10 Pointe Drive, Brea, California 92821 http://www.viewsonic.com diligence processes. Roughly 85 percent of the cobalt we use comes from eligible smelters (Conformant, Active, or Outreach Required). The remaining 15 percent comes from sources that don’t currently have responsible sourcing programs in place to meet our rigorous requirements, and we’re working closely with these suppliers to develop them. Determination ViewSonic has been a participating member of the CFSI since 2016. The CMRT requirement, our due diligence measures, our Conflict Minerals Policy, and the Sourcing Policy for Conflict Minerals constitute the most reasonable efforts ViewSonic demonstrated to determine the mine or location of origin of Covered Minerals in our supply chain. The Appendix 1 of the Conflict Minerals Report lists the facilities identified by suppliers and manufacturers we surveyed. Not all facilities have processed Covered Minerals for our 2019 products. Our suppliers and manufacturers provided facility information via the CMRT at the company level, which does not limit their CMRT responses to facility information for Covered Minerals in products they supply to ViewSonic specifically. The suppliers and manufacturers who identified the countries of origin of Covered Minerals in their products are listed on Appendix 2 of the Conflict Minerals Report. Our 2019 Covered Minerals products did not originate in the countries listed on Appendix 2. Our suppliers and manufacturers provided country of origin information via the Template at the company level, and did not limit their Template responses to countries of origin for products they supply to ViewSonic specifically. Suppliers or manufacturers who identified a Covered Country as the country of origin for Covered Minerals identified processing facilities for such Covered Minerals.