Conflict Mineral Due Diligence and Reasonable Country of Origin Inquiry

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Reasonable Country of Origin Inquiry and Due Diligence - Conflict Mineral Webinar by Assent Compliance. For more information contact info@assentcompliance.com or visit www.assentcompliance.com

Reasonable Country of Origin Inquiry and Due Diligence - Conflict Mineral Webinar by Assent Compliance. For more information contact info@assentcompliance.com or visit www.assentcompliance.com

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  • 1. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Section 1502 Conflict MineralsSTEP 2 – RCOI and Due Diligence Assent Compliance Krystal Noseworthy-Baker 613.882.1429 Krystal.baker@assentcompliance.com C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 2. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Agenda • Assent Compliance Corporate Overview • Brief recap of Dodd-Frank Act Section 1502 • Assent Compliance involvement with Dodd-Frank Act • Reasonable Country of Origin • What Does the Law State? • Implementation • Application of Due Diligence • OECD Due Diligence • Practical steps • Assent Compliance Services • Q&A C u s t o m s o l u t i o n s f o r c o m p l i a n c y [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 3. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 About Assent Assent Compliance delivers SaaS Environmental Compliance Services to companies who must comply with local, national and global environmental regulations. Assent also supports its software division with a team of highly experienced industry consultants to provide our clients with turnkey compliance solutions. Industry experts at Tier 1 companies rank Assent Compliance amongst the top environmental compliance solutions in the world and one of the only global solution providers to offer a full service solution from end to end.Our MissionIs to help our clients comply with environmental regulations in themost efficient and cost effective manner possible. This is achievedthrough SaaS automation of processes and working with clientsto build efficient internal compliance programs that meet globalcompliance requirements.C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 4. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 How The Assent Compliance Management System Works Integrates with Pulls Bill of Material (BOM) Communicates with Supply Major ERP/PLM into a centralized compliance Chain in bi-directional fashion Systems data base or operates as a to procure environmental stand-alone system. information from suppliers Modules to Comply with All Major Environmental Build IPC 1752-A FORMS. Regulations Import/Export via XML Built-in CRM for compliance Homogenize proprietarytasks, due diligence reporting supplier DOC formats in xml and audit trails Allows internal Staff to Acts as a repository for any Make Engineering Override compliance related material assessments C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 5. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Consulting Services  Compliance Assessment Services For Environmental Regulations  Internal Standard Operating Procedure Consulting  Compliance Plan Development  Compliance Strategy Consulting  Conflict Mineral Compliance  IT System IntegrationC u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 6. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 our offices Munich, Germany london, UK Ottawa, Ontario Can- ada (HQ) Taipei, Taiwan Bangalore, IndiaNew York,New York Kenya (Conflict Minerals) C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 7. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Section 1502 – Dodd-Frank Wall Street Reform and Consumer Protection Act The basics • The Conflict Minerals (3TGs) • Tin (Cassiterite Ore) • Tungsten (Wolframite) • Tantalum (Coltan Ore) • Gold • The Countries • Democratic Republic of Congo • Congo Republic • Central Africa Republic • Tanzania • Sudan • Burundi • Zambia • Rwanda • Angola • Uganda C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 8. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044• Conflict Minerals Definition: • Mined in conditions of armed conflict and abuses of human rights As per 17 CFR Parts 229 and 249 “The Conflict Minerals” Rule: “It is the sense of the Congress that the exploitation and trade of conflict minerals originat- ing in the Democratic Republic of the Congo is helping to finance conflict characterized by extreme levels of violence in the eastern Democratic Republic of the Congo, particularly sexual – and gender-based violence, and contributing to an emergency humanitarian situ- ation therein”• This situation attracts Media attention • Child Soldiers • Sexual assault on a mass scale • Intimidation and abuse of local populace • Armed control of mines, trading routes, and other strategic areasMore Media attention = More Consumer attentionC u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 9. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Section 1502 – Dodd-Frank Wall Street Reform and Consumer Protection Act SCOPE • Companies that register with the SEC • 10K (US) • 20F (Foreign) • 40F (Canadian) Legal Wording: Issuers that File Reports Under Sections 13(a) and 15(d) of the Exchange Act • Conflict Minerals “necessary to the functionality or production” of its products manufactured (or contracted to be manufactured) • Suppliers to impacted SEC filing companies are affected by the process, even if they are not an SEC filing company themselves C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 10. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Principal Requirements (as part of annual reporting to SEC) – FINAL RULES • Reasonable Country of Origin Inquiry • Trace back of all 3TGs to country of origin • Determine if 3TGs are from scrap or recycled sources Possible Scenarios and Requirements stemming from the RCOI: Scenario 1: • If the Issuer knows all 3TGs did not originate in DRC Countries or are from scrap or recycled sources OR • If the Issuer has no reason to believe that the 3TGs may have originated in the covered coun- tries and may not be from scrap or recycled sources. Requirements: • Disclosure of the RCOI on Issuer Internet website • File Form SD with the SEC as part of annual filings: »» Disclose the determination »» Disclose the process »» Disclose the internet address of the site with the RCOI Information • Maintain reviewable records of the investigation and determination C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 11. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044Principal Requirements (as part ofannual reporting to SEC) – FINAL RULESCONT’DScenario 2:• If the Issuer knows or has reason to believe that the 3TGs may have originated in the covered countries.OR• If the Issuer knows or has reason to believe that the 3TGs may not be from scrap or recycled sources.Requirements: • All the above tasks plus • Create Conflict Minerals Report • Filed as exhibit to the Form SD • Make report available on the Internet website• Same as proposed – All of the above must be audited by a 3rd party • 10K/20F audited as a part of overall SEC filing • Conflict Minerals Report, if required, must be audited separatelyC u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 12. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Final Rules Flowchart Does the issuer file re- Does the issuer ports with the SEC under manufacture or Are conflict minerals necessary to the YES YES sections 13(a) or 15(D) of the contract to functionality or production of the product exchange act? manufacture products? manufactured or contracted to be manufactured? No No File does not apply. No END YES YES Were the conflict minerals outside the sup- ply chain prior to January 31, 2013? No, if newly mined No, if potentially scrap or recycled On a reasonable country of origin inquiry (RCOI), NoYES does the issuer know or have reason to believe that the conflict minerals may have originated in the DRC Based on the RCOI, does the issuer know or reasonably or an adjoining country (the covered countries)? believe that the conflict minerals come from scrap or recycled? No YES File a form SD that discloses the issuer’s determination and Exercise due diligence on the source and chain of custody of its conflict minerals follow- briefly describes the RCOI and the results of the inquiry. ing a nationally or internationally recognized due diligence framework, if such framework END is available for a specific conflict mineral. In exercising this due diligence does the issuer determine the conflict minerals are not from Yes the covered countries or are from scrap or recycled. File a form SD the discloses the issuer’s determination and No briefly describes the RCOI and due diligence measures taken and the results thereof. File a form SD with a conflict minerals Report as an exhibit, which includes a description of END the measures the issuer has taken to exercise due diligence. In exercising due diligence, was the issuer able to determine whether the conflict minerals No Is it less than two years after the financed or benefitted armed groups? effectiveness of the rule (four years for smaller Reporting companies)? YesThe conflict minerals report must also include and independent private sector audit report, The Conflict minerals Report must also includewhich expresses an opinion or conclusion as to whether the design of the issuer’s due diligence No Yes a description of products that are “DRC Conflictmeasures is in conformity with the criteria set forth in the due diligence framework and wheth- Undeterminable” and the steps taken or that willer the description of the issuer’s due diligence measures is consistent with the process under- be taken, if any, since the end of the period coveredtaken by the issuer. Also, include a description of the products that have not been found to be in the last Conflict Minerals Report to mitigate theDRC Conflict free, the facilities used to process the necessary conflict minerals in those prod- risk that the necessary conflict minerals benefitucts, the country of origin of the minerals and the efforts to determine the mine or location or armed groups, including any steps to improve dueorigin of those minerals with the greatest possible specificity. END diligence. No audit is required. END C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 13. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Section 1502 – Dodd-Frank Wall Street Reform and Consumer Protection Act Assent Compliance’s Involvement with Dodd-Frank Section 1502 • Meeting with SEC • Over the course of Monday December 12th and Tuesday December 13th, Assent Compliance met separately with Commissioner Paredes, Commissioner Walter and Commissioner Aguilar for 1 hour each to discuss the following items in respect to Dodd Frank Section 1502 »» NAM and Tulane Reports »» Compliance costs »» Practical compliance activities »» Impact on industry »» Impact on supply chains »» Feedback on proposed rules C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 14. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044• On Wednesday December 14th, Assent Compliance participated in Conflict Mineral discussion panel with the following panelists: • GE • AMD • Brookings Institute • RIM • Claigan Environmental • KEMET• The panel discussed various issues surrounding Conflict Minerals and fielded questions from the audience (which was comprised of congress staff, journalists, industry groups and business representatives)• Assent Compliance is included 4 times in the Final Rules from the SEC based on our input at the meeting and on a separate submitted letter we provided to the SEC.C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 15. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Defining the Reasonable Country of Origin Inquiry (RCOI) First, let’s examine key points from the final rules regarding an issuer’s approach to an RCOI: • “The final rule does not specify what steps and outcomes are necessary to satisfy the reasonable country of origin inquiry requirement because, as stated in the Proposing Release, such a deter- mination depends on each issuer’s particular facts and circumstances.” (Pg. 147) • “..satisfy the reasonable country of origin inquiry requirement, an issuer’s reasonable country of origin inquiry must be reasonably designed to determine whether the issuer’s conflict miner- als did originate in the Covered Countries, or did come from recycled or scrap sources, and it must be performed in good faith” (Pg. 147-148) “we do view an issuer as satisfying the reasonable country of origin inquiry standard if it seeks and obtains reasonably reliable representations indicating the facility at which its conflict minerals were processed and demonstrating that those conflict minerals did not originate in the Covered Countries or came from recycled or scrap sources.” (Pg. 147-148) C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 16. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044Defining the Reasonable Country ofOrigin Inquiry (RCOI) – ContinuedWhile there is no specification as to the steps to be undertaken to satisfy the RCOI, the goal thatyour RCOI must be designed to achieve is clear – A reasonable determination of the whether ornot the conflict minerals used your products were processed at facilities that do not use conflictminerals or that your conflict minerals come from recycled or scrapped sources.Too many companies are undertaking an approach that will amount to sending a spreadsheet toall of their direct suppliers, then using those representations as the basis for an “Undeterminable”status (IE: “They don’t know, so I don’t know”).Not only would this not be in line with the 2nd and 3rd bullets above, It would also likely not passan audit not to mention leave your company unprepared for the date when your Undeterminablestatus will expire (2 or 4 years)C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 17. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Reason to Believe... One of the key changes to the SEC Regulations is the trigger for a Conflict Minerals report: • Under the proposed rules, an issuer would have had to undertake OECD Due Diligence and produce a Conflict Minerals Report if they could not prove that their 3TGs did not originate from the covered countries or come from a scrapped or recycled source. This would have required issuers to prove a negative and has been changed in the final rules. • The trigger for whether or not a Conflict Minerals report and applicable Due Diligence is required under the final rules is whether or not the issuer has “reason to believe” that the 3TGs in their products originated from one of the covered countries. Here is what the final rules says about this revised approach: “This revised approach does not require an issuer to prove a negative to avoid moving to step three, but it also does not allow an issuer to ignore or be willfully blind to warning signs or other cir- cumstances indicating that its conflict minerals may have originated in the Covered Countries.” (Pg. 153) As with many other parts of the Conflict Minerals provision, the SEC has left what constitutes “reasonable” up to the issuer. If your RCOI is “reasonably designed” then you should be able to make your RCOI determination to the “reasonableness level” prescribed in your RCOI plan. C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 18. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044Reason to Believe... ContinuedHere is the actual text from the Final Rules: “Consistent with this approach, issuers may explicitly state that, if true, their reasonable country of origin inquiry was reasonably designed to determine whether the conflict minerals did originate in the Covered Countries or did not come from recycled or scrap sources and was performed in good faith, and the issuer’s conclusion that the conflict minerals did not originate in the Covered Countries or came from recycled or scrap sources was made at that reasonableness level.“Summary• You must design an RCOI that will help determine the country of origin for your 3TGs • Simply sending the EICC template to your direct suppliers is not sufficient. You should also: »» Analyze supplier submissions »» Correct insufficient response »» Map supply chains where the risk is greater• The determining factor in your RCOI is whether or not there is “reason to believe” – make sure your Compliance Plan outlines your RCOI methodology in detail so you that you can demon- strate and verify your “reasonableness level”C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 19. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Practical approaches to an RCOI Here are some standard guidelines and practices to follow for your RCOI: • Use a standard form »» EICC Rev 1 or 2 is good template and will typically reduce the burden on your suppliers as they will likely have one completed on hand • Establish a supplier portal »» In order to make sure that all responses are centralized in one place, setup a por- tal through which your suppliers can submit declarations for Conflict Minerals compliance »» Reduces time and effort on gathering, collecting and analyzing Declarations internally »» Allows for greater control over the Compliance Process (a part of due diligence) • Assign Risk Profiles to your suppliers »» Should be based on size, materials provided and past experience with respect to material declarations »» Allows you to determine who should and should not be subject to correct actions or source mapping C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 20. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Due Diligence When examining Due Diligence, we will look at 3 major sources for guidance: • OECD Guidance on Due Diligence • Other material regulations • Standard Industry practices OECD Guidance There are 5 steps behind OECD Due Diligence: 1. Establish strong company management systems 2. Identify and assess risks in the supply chain 3. Design and implement a strategy to respond to identified risks 4. Carry out 3rd party audit of smelter/refiner’s due diligence practices 5. Report annually on supply chain due diligence #4 does not apply to most of you, so we will focus on the other 4. C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 21. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 OECD Guidance on Due Diligence – Step 1 1. Establish strong company management systems “OBJECTIVE: To ensure that existing due diligence and management systems within companies address risks associated with minerals from conflict affected or high-risk areas.”* Practical Interpretation/Implementation: Establish Strong Communication Systems • Develop thorough and comprehensive documentation: • DRC-Free Supply Chain Policy »» OECD Due Diligence Guidance Annex II as basis • Standard Operating Procedure »» Conflict Minerals Work Flow Document as part of an overall Compliance Plan C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 22. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044OECD Guidance on Due Diligence – Step 1continuedNOTE: Final Rules eliminated documentation retention timelines HOWEVER OECD DueDiligence Guidelines state (p.26):“Maintain related records for a minimum of five years, preferably on a computerised database.”• Buy-in, Training and Communication • Throughout all affected areas of company at all levels : »» Management is especially essential »» Finance, Procurement, Engineering or Product Development/Design, Quality Departments • Throughout the supply chain: »» Don’t surprise your suppliers by simply adding to existing contracts and not high- lighting the additions and new commitments you are asking for »» Training on both the basics of the Final Rules AND the Due Diligence associated will help suppliers help you continued...C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 23. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044OECD Guidance on Due Diligence – Step 1continued »» Clear simple communication of expectations and the ability to work with them through those expectations • What you will be asking for • When you will be asking for it • How often you will be asking for it • The “now” answer versus what you ultimately need »» Improvement Plans »» Contract renewal and extension = Leverage• Supply Chain Mapping • Transparency is vital »» NAFTA already requires CoO marking – leverage existing processes and experiencesC u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 24. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 OECD Guidance on Due Diligence – Step 2 2. Identify and assess risks in the supply chain “OBJECTIVE: To identify and assess risks on the circumstances of extraction, trading, handling and export of minerals from conflict-affected and high-risk areas.”* Practical Interpretation/Implementation: Collect Information, Map Supply Chain and Identify Risk. • Supplier Data Gathering • EICC-GeSI Rev.2 »» Not a legal requirement but is industry standard • Allows for standardization across data collection • Simplifies Reporting • Collate and Assess Information • Simply working with spreadsheets is an arduous, difficult task »» Contrary to OECD Guidelines recommended practice for records maintenance and retention • Software/Computerized Database • Supply Chain Mapping stems from information collected • Categorization into Risk Profiles based on information collected C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 25. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044• Step 1 does contribute to and work coherently with Step 2 • Clear expectations to suppliers helps gather the most information possible allowing for reduction of Risk or, at the very least, a clear identification of Risks • Compliance Plan and SOP include Risk Profiles and the work flow to follow depending on which profile a supplier falls under • Supply Chain Mapping should already establish issues/risks based on the “where” »» Identification of Smelters/Refiners (to the best of your ability) »» Identification of “Red Flag” Locations / More Severe Risk Profile• Step 2 and 3 are highly interdependent • Chronologically Step 3 precedes Step 2 • Risk Management Committee and Risk Profiles »» Clear Rules for classification »» Clear Steps to follow after supplier is classified • I.e.: Which questions to ask the supplier next? • Have they followed all elements of due diligence? • This feeds up to the smelter/refiner. • Further Quality Control • Working with supplier to mitigate risk • Spot ChecksC u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 26. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 OECD Guidance on Due Diligence – Step 3 3. Design and implement a strategy to respond to identified risks “OBJECTIVE: To evaluate and respond to identified risks in order to prevent or mitigate adverse impacts. Companies may cooperate to carry out the recommendations in this section through joint ini- tiatives. However, companies retain individual responsibility for their due diligence, and should ensure that all joint work duly takes into consideration circumstances specific to the individual company.”* Practical Interpretation/Implementation: Establish a Risk Management Committee, Risk Profiles for Suppliers, Work Flow based on Categorization. • Development of Risk Management Committee • Clear responsibilities to a specific well-informed group to ensure the work flow is followed and necessary decisions are made on suppliers based on their categorization • Create Risk Profiles based on supplier responses given • Develop SOP and Compliance Plan »» Work Flow based on Categorization under defined Risk Profiles • Development of Risk Profiles • Clear “rules” to categorize suppliers efficiently = Risk Identification »» OECD Due Diligence Annex II »» EICC-GeSI Conflict-Free Smelter Program C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 27. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 »» Existing Agreements »» OECD Guidelines for Multinational Enterprises, international human rights and hu- manitarian law »» Size of Supplier »» Are they an SEC Issuer?• Implement the Risk Management Plan • Follow the SOP/Compliance Plan »» Identifies steps to working with supplier »» Identifies decision points • When to identify new suppliers • When to end an existing relationship • Clear work flow and clear communication with suppliers – optimizing the relationship and cooperation »» Progressive performance improvement »» Reasonable Timeframes • Avoid ending relationships while mitigating riskC u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 28. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 OECD Guidance on Due Diligence – Step 5 5. Report annually on supply chain due diligence “OBJECTIVE: To publicly report on due diligence for responsible supply chains of minerals from conflict-affected and high-risk areas in order to generate public confidence in the measures companies are taking.”* Practical Interpretation/Implementation: Conflict Minerals Form SD and Conflict Minerals Report. • Yearly Reporting is already a requirement of the Conflict Minerals Final Rules • Financial Reporting Requirements under Final Rules »» Form SD »» Conflict Minerals Report (If applicable) • Audit »» Website Publication • Supply Chain Due Diligence Policy, Compliance Plan, SOP »» Will already account for reporting requirements • RCOI • Process • Determination/Status • Improvements and Evolution in Program C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 29. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044• Guidance also suggests rolling it into annual sustainability or corporate responsibility reports • Supply Chain Due Diligence Policy • SOP and Compliance Plan »» At Least the Risk Profiles/Risk Mitigation Work Flows • Audits • Determination/Status • Improvements and Evolution in ProgramC u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 30. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Other Material Regulations - RoHS II Due Diligence and Testing Determination of Necessary Information • Assess what types of documents are required based on substance presence risk and supplier risk • Technical judgement allowed Collection of Information • Types of allowed documentation »» Supplier declarations »» Material Declarations »» Analytical test results C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 31. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Due Diligence and Testing Evaluation of Data • Mandatory for Manufacturers • Requirements include: • Establish procedures for evaluating collected information / documentation • Evaluate whether each part, component, or material meets the materials restriction re- quirements of RoHS Recast • Evaluate whether the document is of sufficient quality to include in the technical documentation »» Criteria met = Included »» Criteria not met = further corrective actions or analysis Ensuring Validity of Data • Requirements: • periodic review of the documents contained in the technical documentation to ensure that they are still valid; • technical documentation must reflect any changes to materials, parts or sub-assemblies C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 32. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Due Diligence and Testing STANDARD PRACTICE: • Annual Updates – with the Annual Audit! • Significant Product Changes = Update File • Completeness in the Technical File: • Consumables • Out of Scope Parts • Not part of the RoHS Compliance THEREFORE not required to be included »» Recommended that the out of scope and consumable parts are footnoted Technical Files – In Practice… C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 33. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044Due Diligence and Testing – EN 62321Electrotechnical products – Determination of levels of six regulated substances (lead, mercury,cadmium, hexavalent chromium, polybrominated biphenyls, and polybrominated diphenylethers) • EU Standard for RoHS testing • Not Mandatory…HOWEVER: »» Most effective method of risk management »» Usually less costly than alternative (further/increased) supplier data gathering and/or corrective action methods »» Testing to an established standard allows you to quote it in the file = lends credibility • If you have done it right, others don’t have to! • Recommended to have at least scan testing to EN 62321:2009 in technical file »» XRFC u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 34. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 RoHS II Due Diligence and Testing – EN 62321 Declaration and Test Report Sample Review Test Report No. : CE/2010/22946 Date : 2010/02/24 Page : 4 of 5 BOURNS TRIMPOT ELECTRONICAS, LIMITADA DEL CURCE A SAN ANTONIO DE BELEN AUTOPISTA CANAS-150 MTS *CE/2010/22946* MATERIAL DECLARATION SHEET AL OESTE HEREDIA, COSTA RICA. Test Report No. : CE/2010/22946 Date : 2010/02/24 Page : 2 of 5 BOURNS TRIMPOT ELECTRONICAS, LIMITADA *CE/2010/22946* DEL CURCE A SAN ANTONIO DE BELEN AUTOPISTA CANAS-150 MTS PBB/PBDE analytical FLOW CHART AL OESTE HEREDIA, COSTA RICA. No. Construction Element Material Group Report Note 1) Name of the person who made measurement: Roman Wong Test results by chemical method (Unit: mg/kg) 2) Name of the person in charge of measurement: Shinjyh Chen Test Item (s): Method Result MDL (Refer to) No.1 1 Element Ink + Ceramic B First testing process Cadmium (Cd) (1) n.d. 2 Sample Lead (Pb) (2) 2520 2 Confirmation process Bourns Trimpot Electronicas, Limitada Optional screen process Mercury (Hg) (3) n.d. 2 Hexavalent Chromium Cr(VI) by (4) n.d. 2 2 Back plate 263 Copper alloy A Del Cruce a San Antonio de Belen Sample pretreatment alkaline extraction Sum of PBBs n.d. - Test Report No. 150 Mts Al Oeste : 2010/02/24 Autopista Cañas - : CE/2010/22946 Date Monobromobiphenyl of 5 Page : 1 Dibromobiphenyl n.d. n.d. 3 5 5 Back plate 220 Copper alloy A Screen analysis BOURNS TRIMPOT ELECTRONICAS, LIMITADA Tribromobiphenyl *CE/2010/22946* Heredia, Costa Rica n.d. 5 DEL CURCE A SAN ANTONIO DE BELEN AUTOPISTA CANAS-150Tetrabromobiphenyl MTS n.d. 5 Pentabromobiphenyl n.d. 5 AL OESTE HEREDIA, COSTA RICA. Hexabromobiphenyl n.d. 4 5 Wire Copper Alloy A Sample extraction/ Heptabromobiphenyl n.d. 5 Soxhlet method Octabromobiphenyl n.d. 5 Nonabromobiphenyl The following sample(s) was/were submitted and identified by/on behalf of the client as : n.d. No. : CE/2010/22946 Date : 2010/02/24 5 5 5 Mold compound Page : 3 of 5 Various Test Report A Decabromobiphenyl n.d. (5) BOURNS TRIMPOT ELECTRONICAS, LIMITADA *CE/2010/22946* Concentrate/Dilute Sum of PBDEs n.d. - DEL CURCE A SAN ANTONIO DE BELEN AUTOPISTA CANAS-150 MTS Sample Description Extracted solution : Monobromodiphenyl ether BOURNS MODELS PWR263, PWR163, PWR220T, PWR221T AL OESTE HEREDIA,n.d. COSTA RICA. 5 Test Report No. : CE/2010/22946 Date : 2010/02/24 Style/Item No. Page : 5 of 5 : Dibromodiphenyl ether THICKFILM POWER RESISTORS/ELEMENT ether n.d. 5 Tribromodiphenyl n.d. Note A: RoHS compliance. 5 Sample Receiving Date BOURNS TRIMPOT ELECTRONICAS, LIMITADA : 2010/02/11 Filter *CE/2010/22946* Tetrabromodiphenyl ether n.d. 5 DEL CURCE A SAN ANTONIO DE BELEN AUTOPISTA CANAS-150 MTS Testing Period : 2010/02/11 TO 2010/02/24 Pentabromodiphenyl ether n.d. Note B: ROHS Compliant By Exemption 5 (lead 1) These samples were dissolved totally by pre-conditioning method according to below flow chart. 5 in glass of AL OESTE HEREDIA, COSTA RICA. Hexabromodiphenyl ether (Cr 6+ test method excluded) n.d. 5 Heptabromodiphenyl ether 2) Name of the person who electronic components) n.d. made measurement: Climbgreat Yang 5 Analysis by GC/MS ============================================================================================ person in charge of measurement: Troy Chang Octabromodiphenyl ether 3) Name of the n.d. 5 Nonabromodiphenyl ether n.d. 5 Decabromodiphenyl ether Cutting / Preparation n.d. 5 Test Requested : Issue ReportIn accordance with the RoHS Directive 2002/95/EC, and its amendment Requirement: Review points directives. TEST PART DESCRIPTION: NO.1 : MIXED ALL PARTS Sample Measurement Hg Cr6 + Test Method : Note: 1. mg/kg = ppm; 0.1wt% = 1000ppm With reference to IEC 62321: 2008 Pb、Cd Contain Pb Hg Cr+6 PBB and PBDE< 0.1 % (1000 ppm) by 2. n.d. = Not Detected Procedures for the Determination of Levels of=Regulated Substances in 3. MDL Method Detection Limit Acid digestion by suitable acid weight. digestion with Microwave Add appropriate amount of Electrotechnical Products. • Directive Stated 4. "-" = Not Regulated depended on different sample 5. The sample(s) was/were analyzed on behalf of the applicant astable) sample in one testing. /HCl/HF 0.01 material (as below mixing Contain Cd < HNO3 % (100 ppm) by weight digestion reagent (1) Determination of Cadmium by ICP-AES. The above result(s) was/were only given as the informality value. (2) Determination of Lead by ICP-AES.the results shown in this test report refer only to the sample(s) tested. This test report cannot be reproduced, except in full, without prior written permission of the Company. Unless otherwise stated Filtration (3) Determination of Mercury byReport is issued by the Company under its General Conditions of Service printed overleaf or available on request and accessible at http://www.sgs.com/terms_and_conditions.htm. Attention This Test ICP-AES. 除非另有說明,此報告結果僅對測試之樣品負責。本報告未經本公司書面許可,不可部分複製。 Heat to appropriate • Standard Stated is drawn to the limitation of liability, indemnification and jurisdiction issues defined therein. Any holder of this Test Report is advised that information contained hereon reflects the Company’s findings (4) Determination of Hexavalent Chromium and within the limits of Client’s instructions, if any. The Company’s sole responsibility is to its Client and this document does not exonerate parties to a transaction at the time of its intervention only by UV/Vis Spectrometry. Unless otherwise stated the results shown in this test report refer only to the sample(s) tested. This test report cannot be reproduced, except in full, without prior written permissionfrom exercising all their rights and obligations under the transaction documents. Any unauthorized alteration, forgery or falsification of the content or appearance of this document is unlawful and of the Company. temperature to extractPower Resistor RoHS Test This Test Report is issued by the Company under its General Conditions of Service printed overleaf or available on request and(5) Determination of PBB and PBDE by GC/MS. 除非另有說明,此報告結果僅對測試之樣品負責。本報告未經本公司書面許可,不可部分複製。 offenders may be prosecuted to the fullest extent of the law. accessible at http://www.sgs.com/terms_and_conditions.htm. Attention Ltd. SGS Taiwan Residue ** End of Report ** is drawn to the limitation of liability, indemnification and jurisdiction issues defined therein. Any holder of this Test Report is advised that information contained hereon reflects the Company’s findings Solution 台灣檢驗科技股份有限公司 Chemical-Taipei 33 WuChyuan Road, Wuku Industrial Zone, Taipei County, Taiwan /台北縣五股工業區五權路33號 t + 886 (02)2299 3279 f + 886 (02)2299 3237 www.sgs.com at the time of its intervention only and within the limits of Client’s instructions, if any. The Company’s sole responsibility is to its Client and this document does not exonerate parties to a transaction from exercising all their rights and obligations under the transaction documents. Any unauthorized alteration, forgery or falsification of the content or appearance of this document is unlawful and Member of the SGS Group (SGS SA) Cool, filter digestate offenders may be prosecuted to the fullest extent of the law. Test Result(s) : Please refer to next page(s). • Dates through filter Report SGS Taiwan Ltd. 台灣檢驗科技股份有限公司 Chemical-Taipei 33 WuChyuan Road, Wuku Industrial Zone, Taipei County, Taiwan /台北縣五股工業區五權路33號 t + 886 (02)2299 3279 f + 886 (02)2299 3237 www.sgs.com 1) Alkali Fusion Member of the SGS Group (SGS SA) 2) HCl to dissolve Add diphenyl-carbazide for ICP-AES color development Sample Material Steel, copper, aluminum, solder Glass Digestion Acid Aqua regia, HNO3 , HCl, HF, H 2O2 HNO3 /HF • Signature measure the absorbance at 540 nm by UV-VIS MODEL: PWR263S Gold, platinum, palladium, ceramic Silver Aqua regia HNO3 • This lab is fairly well known Plastic H2 SO4 , H2O2 , HNO 3, HCl Others Any acid to total digestion Unless otherwise stated the results shown in this test report refer only to the sample(s) tested. This test report cannot be reproduced, except in full, without prior written permission of the Company. 除非另有說明,此報告結果僅對測試之樣品負責。本報告未經本公司書面許可,不可部分複製。 This Test Report is issued by the Company under its General Conditions of Service printed overleaf or available on request and accessible at http://www.sgs.com/terms_and_conditions.htm. Attention is drawn to the limitation of liability, indemnification and jurisdiction issues defined therein. Any holder of this Test Report is advised that information contained hereon reflects the Company’s findings at the time of its intervention only and within the limits of Client’s instructions, if any. The Company’s sole responsibility is to its Client and this document does not exonerate parties to a transaction • Product Identification is very clear Unless otherwise stated the results shown in this test report refer only to the sample(s) tested. This test report cannot be reproduced, except in full, without prior written permission of the Company. from exercising all their rights and obligations under the transaction documents. Any unauthorized alteration, forgery or falsification of the content or appearance of this document is unlawful and 除非另有說明,此報告結果僅對測試之樣品負責。本報告未經本公司書面許可,不可部分複製。 offenders may be prosecuted to the fullest extent of the law. This Test Report is issued by the Company under its General Conditions of Service printed overleaf or available on request and accessible at http://www.sgs.com/terms_and_conditions.htm. Attention SGS Taiwan Ltd. is drawn to the limitation of liability, indemnification and jurisdiction issues defined therein. Any holder of this Test Report is advised that information contained hereon reflects the Company’s findings Unless otherwise stated the results shown in this test report refer only to the sample(s) tested. This test report cannot be reproduced, except in full, without prior written permissionthe time Company. at of the of its intervention only and within the limits of Client’s instructions, if any. The Company’s sole responsibility is to its Client and this document does not exonerate parties to a transaction 台灣檢驗科技股份有限公司 Chemical-Taipei 33 WuChyuan Road, Wuku Industrial Zone, Taipei County, Taiwan /台北縣五股工業區五權路33號 t + 886 (02)2299 3279 f + 886 (02)2299 3237 www.sgs.com 除非另有說明,此報告結果僅對測試之樣品負責。本報告未經本公司書面許可,不可部分複製。 from exercising all their rights and obligations under the transaction documents. Any unauthorized alteration, forgery or falsification of the content or appearance of this document is unlawful and This Test Report is issued by the Company under its General Conditions of of the SGS Group (SGSoverleaf or available on request and accessible at http://www.sgs.com/terms_and_conditions.htm. Attention Member Service printed SA) offenders may be prosecuted to the fullest extent of the law. is drawn to the limitation of liability, indemnification and jurisdiction issues defined therein. Any holder of this Test Report is advised that information contained hereon reflects the Company’s findingsLtd. SGS Taiwan at the time of its intervention only and within the limits of Client’s instructions, if any. The Company’s sole responsibility is to its Client and this document does not exonerate parties to a transaction 台灣檢驗科技股份有限公司 Chemical-Taipei 33 WuChyuan Road, Wuku Industrial Zone, Taipei County, Taiwan /台北縣五股工業區五權路33號 t + 886 (02)2299 3279 f + 886 (02)2299 3237 www.sgs.com from exercising all their rights and obligations under the transaction documents. Any unauthorized alteration, forgery or falsification of the content or appearance of this document is unlawful and offenders may be prosecuted to the fullest extent of the law. Member of the SGS Group (SGS SA) SGS Taiwan Ltd. 台灣檢驗科技股份有限公司 Chemical-Taipei 33 WuChyuan Road, Wuku Industrial Zone, Taipei County, Taiwan /台北縣五股工業區五權路33號 t + 886 (02)2299 3279 f + 886 (02)2299 3237 www.sgs.com Member of the SGS Group (SGS SA) C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 35. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 RoHS II Due Diligence and Testing – EN 62321 Declaration and Test Report Sample Review 456 Seastrom St. Twin Falls, ID 83301 October 13, 2011 Certificate of Compliance European Union Directive 2002/95/EC Restriction of Hazardous Substances Any Seastrom part number, produced by Seastrom Manufacturing Co., Inc. that meets the following conditions is classified as compliant in accordance with European Union Directive 2002/95/EC (RoHS).  Material: 456 Seastrom St. Twin Falls, ID 83301 Any of the materials listed below without a process/finish. October 13, 2011 Non-Metals:  Delrin (Acetal) Non-Compliance Certificate of  Mica  Polyethylene  Epoxy Glass  Mylar  PVC (Polyvinyl Chloride) (Fiberglass)  Neoprene European Union Directive 2002/95/EC  Santoprene  FluorocarbonHazardous Substances Restriction of (Viton)  Nitrile (Buna-N)  Silicone  Fluorosilicone  Nylatron  Teflon The following materials and processes used at Seastrom Manufacturing Co., Inc. have  Kapton  Nylon been classified as Non-Compliant in accordance with the European Union Directive  Vulcanized Fibre  KEL-F (PCTFE) 2002/95/EC (RoHS). This Directive, however, does not Phenolic affect the use of parts in Metals: applications outside of the Directive’s specified countries. Review points  Brass  Phosphorus Bronze  Stainless Steel Non-Compliant Process/Finish  Copper  Cold Rolled Steel  Steel  Beryllium Copper  Spring Steel  Titanium Process/Finish: Denoted @ end of part # as: • Directive Stated Chemical Film Finish The following base materials contain > 0.1% lead, but are exempt under note 6 of the Directive’s Annex: -CF Hexavalent Chromium Finish -CHR  12L14 Steel (0.35% -C1,weight max) of -C2  C - 360 Brass Rod (3.7% of weight max) • Note that this is in accordance with the “original” RoHS and not the recast however Cadmium Chrome -CHR  Process/Finish: 60/40 Tin Lead Finish -TL1, -TL2 Any Seastrom part number-Z2 Zinc Plate, Type II (Yellow) you will also note that most of the important elements are included produced with a process/finish listed below is compliant under the Chromatic Anodize, Directive, unless the base material is Aluminum. (Contact Seastrom for Aluminum part status) Type I -A1 Standard Electroless Nickel Plating (can be RoHS compliant if specified by customer on Compliant Process/Finish: Denoted @ end of order) part # as: Less Finish -LF • Regulatory wording may be slightly different but the declaration speaks to it! Non-Compliant Materials: Sulfuric Anodize, Type II -A2 2011 Aluminum Rod (primarily used in shoulder washers, spacers, and washers with Black Oxide a specified part. to see if Aluminum 2011 is used for • Highlights non-compliant and compliant parts/processes/finishes thin side walls.) For Aluminum parts, please contact Seastrom at info@seastrom-mfg.com -A3 Hard Anodize, Type III -BO Passivate -P Sincerely, Phosphate Electrolytic Nickel Plate • Includes part # denotations -PH -N Silver Plate -S Maegan Melton Quality Engineer Tin Plate Tin Dip Brad Mohr • Exemptions (as applicable) Process Engineer -T1 -T2 Zinc Plate, Type I (Blue) -Z1 • Dated Seastrom Manufacturing Co., Inc. is Certified ISO 9001:2000 and AS9100:2004 Zinc Plate, Type III (Clear) -Z3 Designated Electroless Nickel Plate (RoHS Compliance must be requested by customer) Sincerely, • Signature and Function Maegan Melton Brad Mohr Quality Engineer • Letterhead Process Engineer • Contact for further information C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 36. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 RoHS II Due Diligence and Testing – EN 62321 Declaration and Test Report Sample Review 1630 McCarthy Boulevard Milpitas, CA 95035-7417 RoHS DIRECTIVE 2011/65/EU MATERIAL DECLARATION CERTIFICATE Linear Technology Corporation certifies the deliverable products, when ordered as lead-free meet the RoHS DIRECTIVE Review points 2011/65/EU. • Restriction of the use of certain hazardous substances in electrical and electronic equipment (Recast) does not pertain to • Directive Stated Linear Technology Corporation. • Linear Technology Corporation also complies with: People’s Republic of China RoHS Directive EIS SJ/T11364-2006 • RoHS recast RoHS Definitions: • Concentration limit of 0.1% by mass (1000 PPM) in homogeneous material for Lead (Pb), Mercury (Hg), Hexavalent Chromium (Cr), Polybrominated Biphenyl (PBB), Polybrominated Diphenyl Ether (PBDE), »» Does not include the specific regulatory wording Decabromodiphenyl Ether (Deca-BDE), Toluene, Trichlorobenzene, and Hexabromocyclododecane (HBCDD), Bis (2-ethylhexyl) phthalate (DEHP), Butyl benzyl phthalate (BBP), Dibutylphthalate (DBP) (as indicated in the earlier slide) • Concentration limit of 0.01% by mass (100 PPM) of homogeneous material for Cadmium (Cd) • Concentration limit of 0.005% by mass (50 PPM) for Perfluorooctane Sulfonates (PFOS) RoHS Exemption: • Confusing wording • Products in the TO-220, DDPAK, SOT223 and TO247 packages are currently assembled with a Soft Solder Die Attach material containing Lead (Pb). Article 4, Annex 7a (>85% Lead, Pb, in high melting point solders) exempts this material at this time. • Certifies that it meets the directive HOWEVER The Chinese RoHS EFUP Logo 2 applies when these packages are shipped to the People’s Republic of China. • The micro modules products contain lead in the glass frit. Article 4, Annex 7(c)-1, (electronic components containing lead in a glass or ceramic other than dielectric ceramic in capacitors, e.g. piezoelectronic devices, or in a glass or ceramic matrix compound. »» Restriction of the use of certain hazardous substances in The Chinese RoHS EFUP Logo 2 applies when these packages are shipped to the People’s Republic of China. Substances of Concern: electrical and electronic equipment (Recast) does not pertain to • Antimony Trioxide, Sb2O3 (CAS# 1309-64-4) and Bromine, Br (CAS# 10097-32-2) are used as a flame retardant in mold compound in several products. Linear Technology Corporation is evaluating and qualifying new mold compounds that contain Linear Technology Corporation. no Sb2O3, or Br. Once qualified these products will be considered Halogen-Free. • Polyvinyl Chloride (PVC) – in shipping tubes, CAS #9002-86-2. The tubes are reused 2 times then recycled. • Linear Technology Corporation products do not contain or have termination finishes of Pure Lead or Pure Zinc. • Exemptions (as applicable) Linear Technology Corporation’s Device Material Declaration concentrations are estimated and are derived from engineering calculations. Linear Technology Corporation has a lifetime warranty on all our products, with Linear Technology Corporation standard liability • Dated limited to the replacement of confirmed defective products. Linear Technology Corporation’s ongoing Environmental Program will help ensure we are in compliance with our customer’s environmental needs. • Signature and Function _____________________________________________________ Paul Chantalat • Letterhead Vice President, Quality and Reliability LINEAR TECHNOLOGY CORPORATION ACCEPTS NO DUTY TO NOTIFY USERS OF THIS DECLARATION OF UPDATES OR CHANGES TO THIS DECLARATION. • Contact for further information LTC Revision 7 February 3, 2012 CONTACT INFORMATION: Name: Bobbi Bennett Title: QA Specification Review Manager and Product Environmental Specialist Email: bdbennett@linear.com • The final statement does not provide confidence in the long-term compliance Linear Technology Corporation, 1630 McCarthy Blvd, Milpitas, CA 95035-7417, 408-432-1900 C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 37. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 RoHS II Due Diligence and Testing – EN 62321 Declaration and Test Report Sample Review Review points • Directive Stated • Note that this is in accordance with the “original” RoHS • Exemption is simply stated as exception with no detail • Dated • No Signature or Function • Letterhead • Contact for further information C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 38. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Standard Industry Practices Here are some steps we’ve taken with a client and how they have been practically applied within their Conflict Minerals Compliance program: 1. Creating a DRC-Free Conflict Minerals Sourcing Policy • Assent Compliance instituted a DRC Conflict Free sourcing policy for our client. • Policy is listed on its website and in its T&C’s & POs with all suppliers • Our client supports its suppliers in seeking a mutually sustainable solution for its entire supply chain, including its indirect suppliers by providing Conflict Minerals educational materials, guidance and flow-down contract clauses for use by its suppliers. 2. Creating Standard Operating Procedures for Conflict Minerals • Assent Compliance created internal standard operating procedures (SOPs) for all client departments and business units that are affected by Conflict Minerals. • These SOPs provide a step by step process that each business unit, department and em- ployee must follow in order to generate and maintain the necessary information needed for our client’s compliance with Dodd-Frank Section 1502. 3. Risk Assessment & Risk Mitigation • As part of our client’s Compliance Plan design, all products and suppliers were assessed in order to identify Conflict Minerals scope and risk. C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 39. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 »» High risk suppliers and products were flagged in Assent Compliance’s Database for prioritization of due diligence and supply chain sourcing activities. • High risk suppliers and products are required to provide a greater level of proof, in order to demonstrate a reason to believe that their conflict minerals do not originate in the cov- ered countries. • In addition, with Assent’s assistance, our client has established a separate Risk Mitigation committee which will specifically address high risk suppliers and products who do not meet the minimum requirements of our client’s Conflict Mineral compliance program. »» This committee is responsible for resolving these supply chain issues by assisting the supplier, mapping mine of origin or changing the source of the materials in question.4. Supplier Corrective Actions • With Assent’s assistance, our client has created a list of Supplier Corrective actions to be taken with vendors who cannot provide sufficient compliance information. The specific supplier corrective actions depend on factors such as vendor size, risk level and vendor capabilities. • Suppliers who do not improve their responses in a timely fashion are removed from our client’s supply chain. • On behalf of our client, Assent will assist suppliers with their source mapping efforts and provide flow-down contract clauses where appropriate in the effort to support a mutually sustainable program for all of its suppliers.C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 40. AS SENTCOM PLIANCEinfo@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.80445. Reasonable Country of Origin Methodology • Our client is using Assent Compliance’s Conflict Minerals software and services to conduct its reasonable country of origin inquiry. »» This will involve sending the EICC-GESI Conflict Minerals Reporting template to all direct suppliers. This form must be completed and signed by an appropriate supplier signatory. • All responses are reviewed and sent back to supplier for any corrective measures as pre- scribed in the Conflict Minerals compliance plan. • High risk responses are sent to the risk mitigation committee for review and further action as per the Conflict Minerals compliance plan and SOPs.6. Maintenance of Reviewable Business records • Use of Assent Compliance’s database in order to maintain reviewable business records. This includes, supplier responses, supplier corrective actions and risk mitigation processes. »» Although no longer part of the mandatory requirements under final rules, the storage of these metrics is an important part of demonstrating transparency and is in accordance with compliance to recommended OECD due diligence. • Demonstrates the long-term evolution and improvement of its program to its shareholders.C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 41. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Due Diligence Summary RISK ASSESSMENT and MITIGATION The focus of Due Diligence, especially under the OECD Due Diligence Guidelines and the Conflict Minerals Final Rules, is RISK. • Having a clear understanding of what risks exist, where they exist and their severity is absolutely essential • Having a documented, clear plan to identify risk, assess risk and mitigate risk • Example – RoHS »» Companies who comply but when asked for their plan or steps – nothing exists! • RoHS II (CE Mark and Technical File) forces that into existence »» Conflict Minerals rule is requiring that from the start • The policies and plans developed handle and reduce risk of non-compliance »» Company Policy – what everyone is working towards and following • Supplier agreements (Ts & Cs, POs,etc.) »» SOP/Compliance Plan – how everyone is working towards it • Having resources established to handle risk • Risk Management Committee Essential Question: Have you established all means neces- • Education Resources sary to understand your risk (under the Conflict Minerals Regulation) and then to control it to the best of your ability »» Suppliers following an internationally recognized standard? »» Staff C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 42. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 How Assent can help Assent Compliance offers turnkey Conflict Mineral Compliance services including  Conflict Minerals Scope Assessments, Conflict Minerals Reasonable Country of Origin Inquiry, Conflict Minerals Reports, and Conflict Minerals Software for reviewable business records. Assent Compliance performs full Conflict Minerals Scope assessments for our customers in order to make the following determinations: 1. Products in scope of the Conflict Mineral provision 2. Corporate obligations 3. Conflict Minerals Compliance Plan Our Conflict Minerals Scope Assessment helps companies meet the following OECD guidelines for Due Diligence in Conflict Mineral supply chains: • Establish Strong Company Management Systems • Identify and Assess Risk in the Supply Chain • Design and Implement a Strategy to Respond to Identified Risks C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 43. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 How Assent can help Conflict Minerals Reasonable Country of Origin Inquiry This is a process that involves determining the following items:  • Which of your products contain conflict minerals that are necessary to their functionality? • Who Supplies these products and materials to you? • How the Reasonable Country of Origin Inquiry will be conducted? • How and where will you maintain the required “Reviewable business records”? • How far up your supply you will go for information? • Who will be responsible for reviewing data? • What will be the corrective action procedure for Suppliers with missing or incomplete data? Assent Compliance can help you with your Reasonable Country of Origin Inquiry. Our Conflict Minerals services can provide you with a turnkey solution for Conflict Minerals compliance includ- ing Conflict Minerals Scope Assessments, Conflict Minerals Reasonable Country of Origin Inquiry, Conflict Minerals Reports, and Conflict Minerals Software for reviewable business records. C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]
  • 44. AS SENTCOM PLIANCE info@assenTcompliance.com w w w. a s s e n T c o m p l i a n c e . c o m Tel: 613.290.8044 Questions? Please submit your questions in writing using the Q&A tool along the top menu tool bar. Any questions not addressed during the Q&A portion of this webinar will be addressed in private correspondence after the webinar. C u s t o m s o l u t i o n s f o r c o m p l i a n c e [ REAC H | R o H S | CP s i a | RSL | p r o p 6 5 ]