Conflict Minerals
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MEMORANDUM To: File No. S7-40-1O From: Felicia H. Kung Chief, Office ofRulemaking Division ofCorporation Finance Date: May 11,2012 Re: Section 1502 ofthe Dodd-Frank Wall Street Reform and Consumer Protection Act Regarding Congolese Conflict Minerals On May 11,2012, SEC Deputy Chief of Staff James R. Burns, and Paula Dubberly and Felicia Kung ofthe Division ofCorporation Finance met with Bruce Calder ofClaigan Environmental and Jana Morgan of Global Witness. The participants discussed the Commission's proposed rulemaking under Section 1502 ofthe Dodd-Frank Wall Street Reform and Consumer Protection Act, which relates to reporting requirements regarding conflict minerals originating in the Democratic Republic ofthe Congo and adjoining countries. At the meeting, Bruce Calder submitted to the Commission the conflict minerals policy of the Malaysia Smelting Corporation Berhad (http://www.msmelt.com/abtpolicy.htm) and many other companies (attached). He also provided the statements that he (http://financialservices.house.govlUploadedFilesIHHRG-112-BA20-WState-BCalder 2012051O.pdf.) and Bennett Freeman ofCalvert Investments (attached) presented at the May 10,2012 hearing on "The Costs and Consequences ofDodd-Frank Section 1502: Impacts on America and the Congo" before the Subcommittee on International Monetary Policy and Trade ofthe U.S. House ofRepresentatives. After the meeting, Jana Morgan provided the Commission with a copy ofthe February 29, 2012 law ofthe Democratic Republic ofthe Congo (DRC) that she asserted requires use ofthe OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas in the DRC (attached), and a January 21, 2008 study ofthe Economic Impact ofthe European Union RoHS Directive on the Electronics Industry (http://www.smafederation.org.sg/Portals/0IEvents/Ppt%20Slides/Report%20FINAL%20TFI -CES%202008-01-23%20JS.pdf.). Attachments I '.' Statement of Bennett Freeman Senior Vice President, Sustainability Research and Policy Calvert Investments Subcommittee on International Monetary Policy and Trade Hearing on The Costs and Consequences of Dodd-Frank Section 1502: Impacts on America and the Congo May 10,2012 Calvert is pleased to have the opportunity to make a very brief statement at this hearing on Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act regarding conflict minerals. Calvert Investments is one of the nation's largest families of sustainable and responsible mutual funds based in Bethesda MD, with over $12 billion in current assets under management and nearly half a million investor accounts in the U.S. As a sustainable and responsible investor, Calvert values companies which manage different forms of risk in their global supply chains. We have longstanding experience both in assessing human rights-related risk and the management of that risk across global supply chains-and expertise in evaluating appropriate and credible disclosure of such risk assessment and management. We have been especially concerned in recent years by the use of certain minerals-gold, tin, tungsten and tantalum-to fund the continuing bloody conflict in the Democratic Republic of the Congo (DRC) which has claimed more lives than any other since the end of World War II. That is why we have joined other investors and shareholder advocates in a multi-stakeholder group which also includes major companies and human rights non-governmental organizations (NGOs) to promote responsible sourcing in the DRC. Together we have supported the legislation that was enacted as Section 1502 to curb the use of such minerals which prolong the conflict-and we have worked together since then to support the development of a rule that will ensure its full and swift yet effective and reasonable implementation. We understand the complex issues at stake in the rulemaking process and the painstaking work undertaken by the SEC in order to reconcile that legislative intent with the interests of investors and issuers alike. We have brought to this process not only our expertise in evaluating human rights-related risk in global supply chains, but also our objective of making conflict mineral related disclosures consistent and accessible to all investors. We are encouraged by recent indications that the rule may be finalized in the coming weeks, especially given the urgent legislative intent to address the situation in the DRC. We welcome the examination of key issues at this hearing and we oppose any efforts by Congress to water down or weaken this provision that is critical for protecting human rights and providing important information for investors. We reiterate our hope and expectation that the final rule will be completed and released within the next several weeks given both the humanitarian urgency of the situation on the ground and our need to gain assurance that companies in which we invest are addressing these grave risks in their supply chains, consistent with this vital law. Conflict-Free Supply Chain Due Diligence February 2012 Several metals commonly used in the electronics industry: gold (Au), tantalum (Ta), tungsten (W) and tin (Sn) have a variety of sources, including what has been termed as a “Conflict Region”. Most recently, the eastern region of the Democratic Republic of Congo (DRC) has been determined to be a “Conflict Region”. The following are statements describing our policy on procurement of metals from mines in “Conflict Regions” for all Kester Global Operations. Kester only sells tin (Sn) alloy as a component of our soldering paste and soldering bar or wire products. Kester will undertake reasonable due diligence within our supply chain to assure that tin (Sn) alloy is not procured as a “Conflict Metal.” A “Conflict Metal” is a metal derived from ore sourced from mines in conflict areas of the Democratic Republic of Congo (DRC), or illegally taxed on trade routes, either of which are controlled by non-government military groups, or unlawful military factions. Trade routes not confirmed to be “Conflict Free” include direct exports from the DRC, as well as exports through Rwanda, Uganda, Burundi, Tanzania and Kenya (countries of whom the U.N. Security Council note are global export routes for DRC-mined minerals). Since 2009 Kester has participated in the research project conducted by RESOLVE (www.resolv.org) for the Electronics Industry Citizenship Coalition (EICC, www.eicc.info) and Global e-Sustainability Initiative (GeSI, www.gesi.org) to positively influence the social and environmental conditions in the metals supply chain. Kester sources tin from smelters validated as DRC Conflict-Free using the EICC-GeSI Conflict-Free Smelter (CFS) list. Kester maintains the EICC-GeSI Conflict Minerals Reporting Template software for sources of tin from smelters validated as DRC Conflict-Free. EICC-GeSI Conflict Minerals Reporting Template Sincerely, Carmelle Giblin [email protected] Vice President and General Manager 630-616-6855 - Phone For additional information on this subject contact: Tony DiDomenico [email protected] Environmental, Health and Safety Manager 630.616.6844 - Phone 800 West Thorndale Avenue Itasca, Illinois 60143-1341 Telephone: 800.2.KESTER www.kester.com KEMET Policy on Conflict Minerals 12-05-06 8:32 PM CONTACT US | CUSTOMER SERVICE Search here for KEMET PN, Competitor PN, Partial PN, or Part Description Search here for General Keywords, Part Series, or Corporate Information KEMET Policy on Conflict Minerals KEMET fully supports the position of the Electronic Industry Citizenship Coalition (EICC), the Global e-Sustainability Initiative (GeSI), the Electronic Components, Assemblies and Materials Association (ECA) and the Tantalum-Niobium International Study Center (TIC) in avoiding the use of conflict minerals which directly or indirectly finance or benefit armed groups in the Democratic Republic of Congo or adjoining countries, in line with full compliance to the EICC's Electronic Industry Code of Conduct. KEMET's tantalum supply base has been and continues to be certified to be sourced from conflict free zones. All of KEMET’s tantalum material suppliers have complied with and issued signed Letters of Certification attesting that KEMET Corporation will not receive tantalum powders and wire made from tantalum ores illegally mined in the Democratic Republic of Congo. In addition, all KEMET tantalum raw material providers have either been Conflict Free Smelter (CFS) certified per the EICC/GeSI CFS Assessment Program or are awaiting the third party audit to complete their CFS certification. This policy and certification process is being implemented for all conflict minerals. KEMET will immediately discontinue doing business with any supplier found to be purchasing materials which directly or indirectly finance or benefit armed groups in the Democratic Republic of Congo or adjoining countries. KEMET will continue to work through the EICC, GeSI, ECA and TIC towards the goal of greater transparency in the supply chain. Summary of activities to develop a transparent supply chain…. KEMET was a member of the EICC/GeSI working group that developed the Conflict Free Smelter (CFS) Assessment Program. KEMET is participating in the pilot implementation phase of the Organization for Economic Cooperation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. KEMET will rely on the EICC/GeSI third party audits to supplement our internal due diligence of conflict mineral suppliers