Freescale PowerPoint Template - SESHA 2Q Conflict... · TM Freescale, the Freescale logo, AltiVec,...

TM

Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, t he Energy Efficient Solutions logo, mobileGT, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc.

April 2012

TM

Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobileGT, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc.

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• Review content and status of US legislation regarding the origin certification of Tin, Tantalum, Tungsten and Gold

• How regulations may affect FSL reporting to the SEC,

our Customers and Suppliers

• FSL completed and pending actions

• Next steps

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Conflict Mineral Act Section 1502 of Dodd-Frank Act Undefined and Overdue

• Strong FSL Customer Demand

• Supplier data generally not available

• FSL cannot declare conflict free

• FSL cannot declare compliance

[email protected]

mailto:[email protected]�

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“It is the sense of Congress that the exploitation and trade of conflict minerals originating 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 situation therein.” – Section 1502(a) of the Act

• US legislation enacted by Congress on July 2010 • Disclose annually to SEC

• Democratic Republic of Congo Tin Tantalum Tungsten Gold

[email protected]


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Cassiterite – Tin – Sn Alloy, tin plating, solders for pipes and electronic circuits

Columbite-tantalite – Tantalum – Ta Electronic components, mobile telephones, computers,

videogame consoles, digital cameras, alloy for carbide tools, jet engine components, wafer targets, capacitors

Wolframite – Tungsten – W Metal wires, electrodes, contacts in lighting, electronics,

electrical, heating and welding applications, wafer targets

Gold – Au Jewelry, electronics, communications, aerospace, plating,

wire bond

[email protected]


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Freescale Primary Metal Usage

3T&G Minerals

% FSL Supply Area Where Used Top Suppliers

Available Smelter

Documentation (all or part)?

Gold 10% Fab Targets Honeywell & Tosoh

Yes / No

65% FMM Bonding Wire Hereaus & Yes / No Sumitomo

10% EFM Various Amkor & Carsem Yes

ASE No Tantalum 100% Fab Targets Honeywell &

Tosoh Yes / No

Tin TBD FMM Solder Balls Senju Metals No Post Mold Plating Rohm & Haas, No

Redring Solder Tungsten TBD Fab CVD – WF6 Air Products No

FMM Header Assembly NTK, Kyocera & Sumitomo Metal No

[email protected]


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• Federal Regulations • Customer Expectations • Regional Legislations • World Environmental and Social Organizations • New Corporate Social Responsibilities

[email protected]

Regional legislation

also growing which further complicates compliance

efforts


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1. Country of origin verification 2. Independent audit of results 3. Report to the SEC 4. Report to all customers

[email protected]


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• Established cross-functional team • Posted Policy Statement • Added Conflict Mineral statements:

− Supplier Code of Conduct

− Supplier Self Assessment/Audit

− Supplier Work Instructions 12MWS00047B

− Supplier Certification 12MWS00047B-01

• Benchmarking (next slide)

• Determined materials contain 3T&G − Front and Backend Manufacturing

• Determined Top Suppliers

• Sent EiCC/GeSi form

Internal Supplier

[email protected]


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Company Consulting Group Form Supplier Results

Cisco EICC/GeSi Extractives Working Group www.conflictfreesmelter.org EICC/GeSi NA

IBM EICC/GeSI Extractives Working Group EICC/GeSi 30-60 day response depending on supplier

Intel EICC/GeSI Extractives Working Group EICC/GeSi

Every response under sun. More about business practices than the template. Invited to join group and WG's Due Diligence

TI EICC/GeSI Extractives Working Group EICC/GeSi have asked for a response by 10/5/11

NI Total Parts Plus EICC/GeSi Gather basic and gather more after SEC rules

Fairchild Semiconductor NA FS Survey

Personal Survey - nearly all suppliers could not track to the source or would not disclose. EICC template but are reluctant until SEC finalize the rule

Murata NA EICC/GeSi 2/3 divisions have EICC certifications at the smelter level

Kodak NA NA NA Dell EICC/GeSI Extractives Working Group EICC/GeSi NA 3M NA Standard Response NA Air Products NA Standard Response NA

• Contacted ELM consulting firm. – November 15, 2011

[email protected]


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• OECD Pilot Program (Organization for Economic Co-operation and Development)

− Sanctioned by UN to implement CM program

• EICC-GeSI (Electronics Industry Citizenship Coalition and Global e-Sustainability

Initiative)

• IPC (Interconnecting and Packaging Electronic Circuits)

• ECIA (Electronics Component Industry Association)

[email protected]


http://eicc.info/�

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• SEC will hold an Open Meeting on August 22, 2012 − If supplier is non-compliant: FSL and

customer also non-compliant

− Intel & AMD referenced conflict mineral risk in SEC filing

• EICC-GeSi is becoming industry standard in absence of SEC official regulations

• Establish Corporate policy − Clear protocol for uncertified suppliers

− Impact on supply base

• Internal Ownership − Supplier Assurance & Communication

Procurement

− Regulatory Review & Customer response Legal

− SEC Filing

Finance

− Audit – TBD

External Internal

[email protected]


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13 [email protected]


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CEO

Global Procurement

Business Manager

Supplier Contracts

Legal

Environmental Manager

Environmental Program Analyst

Finance

Director Corp. Accounting

TM

Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, t he Energy Efficient Solutions logo, mobileGT, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc.

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• Overview - Contains comprehensive guidance for responsible supply

chain for conflict minerals - Most quoted document for modeling compliance - Very broad application • In practice - Excellent baseline guidance for companies working

closer to the source of the minerals or in conflict areas - Broader than Dodd-Frank Section 1502 - However, five (5) principal steps can be extracted and

used by electronics producers

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Step 1: Establish Strong Company Management Systems Step 2: Identify and Assess Rick in the Supply Chain Step 3: Design and Implement a Strategy to Respond to

Identified Risks Step 4: Third-Party Audit of Smelters/Refiners’ Due Diligence

Practices Step 5: Report Annually on Supply Chain Due Diligence

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30 companies and 3 industry associations • Aerospace and defense • Automotive • Medical devices • ICT (including semiconductors) • Consumer products • Extractives • Chemicals • Lighting

The majority of participants fall within the ICT sector, while many companies fall into multiple categories due to diversified business structures

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5

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15

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Not to source

from any conflict areas 47% Not to source

from conflict areas in the

DRC 17%

Aims to source from

the DRC, but conflict free

mines 18%

Other 18%

Companies that have adopted a conflict minerals policy. Companies’ approach to minerals sourcing

Level of incorporation of policy

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None 5%

Suppliers 25%

Business partners 12%

Consumers/General Public

11%

NGOs 12%

Government 17%

Other 18%

External Communications Board members

13%

Management 42%

No internal communications

6%

Other 6%

Staff 33%

Internal Communications

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Yes 48% No

52%

Method for identifying red flag locations

Yes 29%

No 68%

No Answer Given

3%

Method for identifying red flag suppliers

Yes 54%

No 46%

Data collection

Yes 59%

No 41%

Smelter identification

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Challenges • Visibility beyond Tier 2 is very challenging.

− Use an industry process (EICC-GeSi) to gain visibility into the supply chain • Difficult to obtain internal buy-in

− Smaller companies have limited knowledge and experience of the supply chain

Actions • 54% are collecting supply chain data

− Supplier’s suppliers, smelter name, contact information, mine of origin, product suppliers, all points of import and export along the supply chain, export license, signed supplier declaration, and supplier polity

Tools • EICC-GeSi MRPRO dashboard, IMDS and SAP software • AIAG is working on a common data collection system for

origin/smelter identification

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Challenges • Identifying smelters − Labor Intensive − Limited reliability

• Identify all vendors that supply 3T’s − Fear of reverse engineer the product

• Confidentiality issues − Trade secret and Non-disclosure assurances

• General lack of resources to implement due diligence

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Challenges • Smelters participation in the CFS

− Smelters outside of US and Europe that are not subject to legislation

− Suppliers reluctant to provide proprietary information due to competitive concerns

• Customers only accepting audits from certain auditing firms − Increase administrative and cost burdens

• Procurement Complexity − Buyers change suppliers frequently increasing the complexity of

obtaining information. • Auditor training

− Building the capacity of trained auditors will take time and resources

• Limited visibility

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• CA Anti-trafficking − Applies to retailers/manufacturers doing business in California

− Post a link on website addressing the risk of human trafficking

and slavery

− Must disclose ‘to what extent, if any’ : Dedicated Policy Training Monitor Continuous Improvement

− Allows class action lawsuits for false or misleading disclosure

Freescale PowerPoint Template - SESHA 2Q Conflict... · TM Freescale, the Freescale logo, AltiVec,...

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