Philips Position on Conflict Minerals


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Philips Position on Conflict Minerals

  1. 1. Philips’ position on responsible sourcingin relation to Conflict MineralsAs a leading global company in health and well-being, Philips is committed to ensuring the safety, healthand protection of people and the environment worldwide. We promote these principles in our globalbusiness practices and our code of conduct – Philips General Business Principles.Philips expects its suppliers, as partners in our sustainability ambitions, to share this commitment. Since2003, we have required our suppliers to sign up to our Supplier Sustainability Declaration, whichpromotes social, health & safety and environmental standards, followed by extensive training andauditing. Our supplier sustainability program and its results are published each year in our annualreport (see mineralsThe proceeds from harmful social and environmental practices in mines, especially in the easternprovinces of the Democratic Republic of Congo (DRC), have been used to fuel armed conflict in theregion. This is a major concern to the electronics industry, among others. The recently enacted DoddFrank law in the United States defines conflict minerals as Tin, Tungsten, Tantalum and Gold (3TG) andany derivatives thereof1.Our commitment to sustainable development compels us to address this concern, even though Philipsdoes not directly source minerals from the DRC and the mines are typically seven or more tiers removedfrom our direct suppliers2. Philips has committed not to purchase raw materials, subassemblies, orsupplies which we know contain conflict minerals that directly or indirectly finance or benefit armedgroups in the DRC or an adjoining country.We have requested our relevant suppliers to confirm that they provide only conflict-free minerals toPhilips. While those suppliers have stated that indeed, to their knowledge, they have provided us withconflict-free minerals, we nevertheless recognize that our suppliers may have too limited insight intotheir supply chains to fully understand the origin of the minerals. Due to the size of our supply chain aswell as the complexity of the routes by which these conflict minerals are traded, smelted, recycled, andsold (including the common practice of mixing ores and recycled scrap from many different sources),Philips and its suppliers face a huge challenge to obtain – for all minerals – full traceability to exact originwith a high degree of certainty.1 Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires certain manufacturersto conduct due diligence on the use of conflict minerals in their supply chain and to make annual disclosures to theSEC.2 The Electronics Industry Citizenship Coalition (EICC), the Global e-Sustainability Initiative (GeSI) and RESOLVEjointly conducted a supply chain study in 2010, “Tracing a Path Forward: A Study of the Challenges of the SupplyChain for Target Metals Used in Electronics,” (See The study found that tin,tungsten and tantalum make up a small percentage of the components and subcomponents in electronic productsand the supply chain for these minerals generally contains seven or more layers.
  2. 2. To further our commitment to sustainability, Philips joined the Electronics Industry Citizenship Coalition(EICC) in 2006, and has been an active member of the EICC working group on extractives, which seeks toprevent conflict minerals from entering the electronics supply chain. The working group has developedtools to increase transparency of the origin of conflict minerals, including an electronic due-diligencetool for companies and the Conflict-Free Smelter program to audit smelters, which are a key element inthe supply chain for determining the origin of the relevant minerals.Through a combination of these efforts, and in close cooperation with governments and NGOs, Philipsworks towards achievement of two goals: 1. Minimizing the trade in conflict minerals from mines that directly or indirectly finance or benefit armed groups in the DRC or an adjoining country. 2. Enabling legitimate minerals from the region to enter global supply chains, thereby supporting the Congolese economy and the local communities that depend on these exports.
  3. 3. Proof pointsPhilips participates in the EICC-GeSI Extractives Work Group. The EICC and GeSI represent over 80companies in the Electronics and Information and Communications Technology industries who havecome together in the EICC-GeSI Extractives Work Group to positively influence the social andenvironmental conditions in the metals extractives supply chain. Philips is an active member of the EICC-GeSI Extractives Work Group.Philips, together with several other EICC-GeSI member companies, convened a multi-stakeholderworkshop in San Francisco in October 2009 to engage other sectors and interested stakeholders. Wealso participate in the organization committee of the first European Extractives workshop planned forSeptember 2011.In 2010, the research commissioned by the Extractives Work Group to map the supply chain for tin,tantalum, and cobalt used in electronics was completed and the report Tracing a Path Forward: A Studyof the Challenges of the Supply Chain for Target Metals Used in Electronics was published. The researchused a tracing method, starting with suppliers from electronics companies, including Philips, andworking up the supply chain toward the mine. Companies at each step in the supply chain werecontacted (e.g. component manufacturers, refiners, smelters) and were requested to provide contactinformation of their suppliers and their codes of conduct. In a limited number of instances it waspossible to identify a pathway from an electronics product to the mine; however none of the mappedsupply chains were traced back to the conflict zones in the Democratic Republic of Congo (DRC).Philips financially sponsored the pilot of the tin organization ITRI to improve supply chain transparencyby tracking minerals and providing verifiable provenance information from individual mine sites ineastern DRC. The pilot is called the ITRI Tin Supply Chain Initiative (iTSCi).In 2011, Philips contributed to the development of a standardized tool by EICC-GeSI to collect duediligence information in the supply chain, and piloted the tool with our suppliers.See for more info: requested our relevant suppliers to state that they provide conflict-free minerals to Philips. While allsuppliers stated that indeed, to their knowledge, they provided us conflict-free minerals, we continueour efforts to increase transparency and investigate additional ways to determine the origin of theminerals used in cooperation with Electronic Industry Citizenship Coalition (EICC) and the GlobaleSustainability Initiative (GeSI) members.Philips further is in dialogue with civil society organizations and Dutch and European policymakers todiscuss the role government and other institutions can play to effectively address the issue of conflictminerals.Philips participates in a multi-stakeholder OECD-hosted working group on implementation of supplychain due diligence. The OECD pilot is intended to test and assist with the implementation of the OECDDue Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk
  4. 4. Areas. In this pilot we aim to identify, discuss and find ways to overcome possible challenges toimplementing due diligence, to ensure that the OECD Guidance and other related due diligenceinitiatives are implemented effectively.About EICC (Electronic Industry Citizenship Coalition)The EICC was established in 2004 to improve social, economic, and environmental conditions in theglobal electronic supply chain through use of a standardized code of conduct. The EICC was incorporatedin 2007 as an association to ensure greater awareness of the Code, and to expand its adoption acrossthe industry. The EICC includes over 50 global electronics companies. For more information or to viewthe EICC Code of Conduct, see or the latest EICC annual report .About GeSI (Global e-Sustainability Initiative)The Global e-Sustainability Initiative (GeSI) is uniquely dedicated to information and communicationtechnologies (ICT) sustainability through innovation.GeSI brings together leading ICT companies –including telecommunications service providers and manufacturers as well as industry associations –andnon-governmental organisationscommitted to achieving sustainability objectives through innovativetechnology.In June 2008, GeSI became a legal independent entity, an international non-profitassociation (AISBL) with an office near the EU institutions in Brussels, Belgium. For more information,see .