Plantronics, Inc.
Conflict Minerals Report
For The Year Ended December 31, 2013
1. | Overview |
This Conflict Minerals Report for the year ended December 31, 2013 is presented by Plantronics, Inc. ("we" or the "Company") to comply with Rule 13p-1 (the "Rule") under the Securities Exchange Act of 1934 (the "Exchange Act").
In 2010, the United States enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). Section 1502 of the Dodd Frank Act specifically relates to "conflict minerals", and adds Rule 13p-1 to the Exchange Act. Rule 13p-1 and the related rules adopted by the Securities and Exchange Commission ("SEC") require companies subject to Rule 13p-1 to perform certain procedures and to disclose information about the use of "conflict minerals" which include coltan, cassiterite, gold, wolframite, or their derivatives, which are limited to tungsten, tantalum, tin, and gold ("3TG") that are deemed to be necessary to the functionality of the products such companies manufacture or contract to manufacture. Specifically, companies are required to disclose whether the conflict minerals used in their products originated in the Democratic Republic of the Congo ("DRC") or an adjoining country (collectively, the "covered countries"), and whether armed groups directly or indirectly benefit as a result, as well as information about the due diligence procedures the Company performed to reach the applicable conclusions.
Plantronics manufactures products as described in its annual report filed on Form 10-K with the SEC on May 16, 2014. These products include, among others:
A.Office and Contact Center: communications headsets, audio processors, and telephone systems
B.Mobile: mono and stereo Bluetooth mobile headsets
C.Gaming and Computer Audio: gaming and computer audio headsets
D.Specialty Products: sold under the Clarity brand consist of various types of telephones designed to address the needs of people suffering from hearing loss
E.Other: Air Traffic Control ("ATC"): Plantronics produces more than 100 different variants for use in ATC facilities around the globe
All Plantronics products contain components considered likely to contain 3TG necessary for the functionality of those products and are therefore within the scope of Rule 13p-1 and the related rules and regulations.
Plantronics performed an initial survey of major suppliers in June 2011 using the Electronic Industry Citizenship Coalition ("EICC") Global eSustainability Initiative ("GeSI") pilot Conflict Minerals Due Diligence Tool. The purpose was to familiarize our supply chain with the conflict minerals issue and to perform a preliminary assessment of the tasks involved. From the returned surveys, as well as other publicly available information concerning some of our suppliers, for example those participating in Solutions for Hope, we were aware that Plantronics' supply chain provided components containing conflict minerals that we knew, or had reason to believe, originated in the DRC or adjoining countries. Based on this knowledge, Plantronics began a supplier survey process that encompassed both Reasonable Country of Origin Inquiry ("RCOI") and due diligence through the use of the EICC-GeSI Conflict Minerals Reporting Template ("CMRT") in November 2012.
2. | Due Diligence |
Design of Due Diligence
Our due diligence measures are designed to conform, in all material respects, with the framework in the Organization for Economic Co-operation and Development ("OECD") due diligence guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD 2012). In accordance with the five step OECD guidance, our measures are designed to determine, to the best of our ability, the source and chain of custody of the 3TG materials necessary for the functionality and/or production of our products, to ascertain if the materials originated in the DRC or an adjoining country, and if so, whether armed groups directly or indirectly benefited as a result.
3. | Due Diligence Performed |
1. | Established Strong Company Management Systems |
• | We formed a Conflict Minerals team consisting of representatives from the Compliance, Legal, Operations/Materials, Quality, and Supplier Quality Engineering departments. |
• | We adopted and posted a company conflict minerals policy statement publicly available at http://www.plantronics.com/us/company/corporate-governance/conflict-minerals.jsp. |
• | We maintain a grievance reporting system open to both employees and suppliers. |
• | Since our supply chain is complex, with multiple tiers between us and the facilities processing the minerals, we developed data gathering and assessment procedures for all approved manufacturers of purchased components, and we rely on our suppliers to identify those facilities in our supply chain. Since we do not have direct relationships with those facilities, we are an active participant in the Conflict Free Sourcing Initiative ("CFSI") to aid in the development of conflict free supply chains upstream of the smelter or refiner level. |
• | We added relevant conflict minerals materials to our record retention policy. |
2. | Identified and Assessed Risk in the Supply Chain |
• | We did a material content assessment of our first tier suppliers (i.e., direct suppliers) and engaged those whose products we believed may contain conflict minerals. We conducted a first round of data collection in the fourth quarter of 2012 using the EICC-GeSI CMRT. We received responses from 153 of 155 suppliers in scope. The responses confirmed that some of the minerals were sourced from within the DRC, adjoining countries, and countries outside the area, or were recycled and scrap. |
• | We then ranked suppliers by annual spend, number of components supplied, and geographic location to prioritize higher risk. We identified 34 suppliers who accounted for in excess of 95% of our costs for parts and components containing 3TG during 2013. We continued to work with those suppliers to improve the quality of their responses to determine whether the conflict minerals in components contained in our products were or were not DRC Conflict Free (as defined in Section 1, Item 1.01(d)(4) of Form SD). We used the CMRT to obtain information concerning the facilities (smelter or refiner) used to process their conflict minerals from all of the targeted suppliers. We used the responses from the suppliers and a data mining service to provide conflict minerals information. We also used the CMRT from 20 off-the-shelf component manufacturers, accounting for 80% of greater than 15,000 component part numbers on our Approved Parts List. |
• | By the end of calendar year 2013, the results of the survey still showed a disparity in the levels of due diligence within our supply chain. However, the quality of the smelter lists improved markedly by the end of the reporting period. Our supply chain reported a total of 177 recognized facilities providing 3TG materials. Sixty-seven of these facilities have been validated by the Conflict Free Smelter Program ("CFSP") as DRC Conflict Free as of May 5th, 2014. These 67 facilities were found to source materials from within the DRC, within the adjoining countries, outside the covered countries, from recycled or scrap materials, or the source was not disclosed. In addition there were a number of entities that could not be confirmed as true smelters or refiners, as well as some entities that were confirmed as not true smelters or refiners. We have not been able to verify that materials from all of these processing facilities are actually in our products, since most of the CMRTs received were at the company, not the product, level. |
The following table shows the number of reported facilities sourcing from different areas and the number of each validated to date by the CFSP. The list of facilities is at the end of this report.
Source of minerals being processed | Total | # CFSP Validated | ||
Sourcing outside covered countries | 25 | 25 | ||
Processing exclusively recycled or scrap materials | 6 | 5 | ||
Sourcing from covered countries | 12 | 12 | ||
Country of origin of materials not disclosed | 134 | 25 | ||
Totals | 177 | 67 |
The supply chain information we collected included smelters and alleged smelters for whom the source of the minerals could not be determined, as well as a number that have not as yet been audited and validated as DRC Conflict Free by the CFSP or another recognized organization. In addition, there were some suppliers whose supply chain information has not yet been traced back to the true facility processing the minerals. For this reason, we cannot claim any products or product categories to be DRC Conflict Free. We did not find any information that would give us reason to believe that any of the 3TG in our products was sourced in a manner that would finance conflict in the DRC. We therefore conclude that for calendar year 2013, we cannot make a definitive determination of the status of all Plantronics products. Therefore, all Plantronics products are classified as DRC Conflict Undeterminable (as defined in Section 1, Item 1.01(d)(5) of Form SD).
3. | Designed and Implemented a Strategy to Respond to Identified Risks |
• | The Conflict Minerals team reported progress and findings to upper management on a quarterly basis. |
• | We developed and documented a process of escalation steps to manage suppliers that did not respond or provide required information about the source of conflict minerals or progress implementing their due diligence processes. We did not find it necessary to restrict business or disengage from any supplier. |
• | We added conflict free mineral sourcing requirements to new and renewed purchase order ("PO") agreements and contracts. |
• | We added conflict minerals requirements to new supplier assessment and existing supplier audit procedures. |
• | We added conflict minerals requirements to our Supplier Code of Conduct. |
• | To better communicate the issues and requirements, we conducted in person training with twenty-eight Asian suppliers in Shenzhen, China, following the CFSI workshop in Hong Kong. |
• | We continued to work within CFSI teams to encourage more smelters to participate in CFSP, particularly those we had reason to believe may source minerals from within the covered countries, but were not yet validated as Conflict Free. |
4. | Carry out independent 3rd Party Audit of Smelters’/Refiners’ Due Diligence Practices |
• | We worked within industry initiatives to implement certification of DRC Conflict Free smelters, and relied on the results of audits conducted by the CFSP to determine smelters’ due diligence practices. We actively participated in outreach to validated smelters to encourage participation in the CFSP as an active contributing member of the CFSI. |
5. | Report Annually on Supply Chain Due Diligence |
• | Our Form SD Specialized Disclosure and this Conflict Minerals Report constitutes our annual report on our Conflict Minerals due diligence. These have been filed with the SEC and are available on our website at www.plantronics.com/conflictminerals. |
4. | Steps to be taken to further mitigate risk |
We have been, and intend to continue, taking the following steps in the future to build on momentum established in the past year and improve the due diligence conducted, and to further mitigate the risk that the necessary conflict minerals in our products benefit armed groups in the covered countries:
• | Improve the content of suppliers’ responses through continued training and education |
• | Expand the amount of off-the-shelf part manufacturer conflict minerals data |
• | Continue to validate supplier responses using on-site visits, process audits, and document examination |
• | Continue to utilize information provided via independent conflict free smelter validation programs such as the CFSP |
• | Encourage our supply chain to use validated conflict free smelters, in particular those sourcing responsibly within the DRC and adjoining countries, to the greatest extent possible |
• | Continue to participate in CFSI efforts to determine status of entities alleged to be smelters within the supply chain that could not be validated as true smelters or refiners before calendar year 2013 filing |
• | Continue to participate in CFSI smelter outreach efforts to increase the number of CFSP validated Conflict Free Smelters |
The following table summarizes the mineral processing facilities reported by supply chain in calendar year 2013:
CFSP validated as DRC Conflict Free as of May 5, 2014 | ||
METAL | SMELTER OR REFINER NAME | COUNTRY |
Gold | Allgemeine Gold-und Silberscheideanstalt A.G. | GERMANY |
Gold | AngloGold Ashanti Córrego do Sítio Minerção | BRAZIL |
Gold | Argor-Heraeus SA | SWITZERLAND |
Gold | Asahi Pretec Corporation | JAPAN |
Gold | CCR Refinery - Glencore Canada Corporation | CANADA |
Gold | Dowa | JAPAN |
Gold | Eco-System Recycling Co., Ltd. | JAPAN |
Gold | Ishifuku Metal Industry Co., Ltd. | JAPAN |
Gold | Istanbul Gold Refinery | TURKEY |
Gold | Johnson Matthey Inc | UNITED STATES |
Gold | Johnson Matthey Ltd | CANADA |
Gold | JX Nippon Mining & Metals Co., Ltd. | JAPAN |
Gold | Kennecott Utah Copper LLC | UNITED STATES |
Gold | Kojima Chemicals Co., Ltd | JAPAN |
Gold | Materion | UNITED STATES |
Gold | Matsuda Sangyo Co., Ltd. | JAPAN |
Gold | Metalor Technologies (Hong Kong) Ltd | HONG KONG |
Gold | Metalor Technologies (Singapore) Pte Ltd | SINGAPORE |
Gold | Metalor Technologies SA | SWITZERLAND |
Gold | Metalor USA Refining Corporation | UNITED STATES |
Gold | Mitsubishi Materials Corporation | JAPAN |
Gold | Mitsui Mining and Smelting Co., Ltd. | JAPAN |
Gold | Nihon Material Co. LTD | JAPAN |
Gold | Ohio Precious Metals, LLC | UNITED STATES |
Gold | PAMP SA | SWITZERLAND |
Gold | Royal Canadian Mint | CANADA |
Gold | SEMPSA Joyería Platería SA | SPAIN |
Gold | Solar Applied Materials Technology Corp. | TAIWAN |
Gold | Sumitomo Metal Mining Co., Ltd. | JAPAN |
Gold | Tanaka Kikinzoku Kogyo K.K. | JAPAN |
CFSP validated as DRC Conflict Free as of May 5, 2014 (CONTINUED) | ||
METAL | SMELTER OR REFINER NAME | COUNTRY |
Gold | Tokuriki Honten Co., Ltd | JAPAN |
Gold | Umicore Brasil Ltda | BRAZIL |
Gold | Umicore SA Business Unit Precious Metals Refining | BLEGIUM |
Gold | United Precious Metal Refining, Inc. | UNITED STATES |
Gold | Valcambi SA | SWITZERLAND |
Gold | Western Australian Mint trading as The Perth Mint | AUSTRALIA |
Tantalum | Conghua Tantalum and Niobium Smeltry | CHINA |
Tantalum | Duoluoshan | CHINA |
Tantalum | Exotech Inc. | UNITED STATES |
Tantalum | F&X Electro-Materials Ltd. | CHINA |
Tantalum | Global Advanced Metals | USE |
Tantalum | H.C. Starck Group | GERMANY |
Tantalum | Hi-Temp | UNITED STATES |
Tantalum | JiuJiang JinXin Nonferrous Metals Co., Ltd. | CHINA |
Tantalum | Jiujiang Tanbre Co., Ltd. | CHINA |
Tantalum | Kemet Blue Powder | UNITED STATES |
Tantalum | Mitsui Mining & Smelting | JAPAN |
Tantalum | Ningxia Orient Tantalum Industry Co., Ltd. | CHINA |
Tantalum | Plansee | AUSTRIA |
Tantalum | RFH Tantalum Smeltry Co., Ltd | CHINA |
Tantalum | Solikamsk Magnesium Works OAO | RUSSIAN FEDERATION |
Tantalum | Taki Chemicals | JAPAN |
Tantalum | Tantalite Resources | SOUTH AFRICA |
Tantalum | Telex | UNITED STATES |
Tantalum | Ulba | KAZAKHSTAN |
Tantalum | Zhuzhou Cement Carbide | CHINA |
Tin | Alpha | UNITED STATES |
Tin | Gejiu Non-Ferrous Metal Processing Co. Ltd. | CHINA |
Tin | Malaysia Smelting Corporation (MSC) | MALAYSIA |
Tin | Mineração Taboca S.A. | BRAZIL |
Tin | Minsur | PERU |
Tin | Mitsubishi Materials Corporation | JAPAN |
Tin | OMSA | BOLIVIA |
Tin | PT Bukit Timah | INDONESIA |
Tin | Thaisarco | THAILAND |
Tin | Yunnan Tin Company, Ltd. | CHINA |
Tungsten | Global Tungsten & Powders Corp. | UNITED STATES |
Not CFSP validated as DRC Conflict Free as of May 5, 2014 | ||
METAL | SMELTER OR REFINER NAME | COUNTRY |
Gold | Aida Chemical Industries Co. Ltd. | JAPAN |
Gold | Almalyk Mining and Metallurgical Complex (AMMC) | UZBEKISTAN |
Gold | Asaka Riken Co Ltd | JAPAN |
Gold | Atasay Kuyumculuk Sanayi Ve Ticaret A.S. | TURKEY |
Gold | Aurubis AG | GERMANY |
Gold | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) | PHILIPPINES |
Gold | Boliden AB | SWEDEN |
Gold | Caridad | MEXICO |
Gold | Cendres + Métaux SA | SWITZERLAND |
Gold | Chimet S.p.A. | ITALY |
Gold | Chugai Mining | JAPAN |
Gold | Daejin Indus Co. Ltd | KOREA, REPUBLIC OF |
Gold | DaeryongENC | KOREA, REPUBLIC OF |
Not CFSP validated as DRC Conflict Free as of May 5, 2014 (CONTINUED) | ||
METAL | SMELTER OR REFINER NAME | COUNTRY |
Gold | Do Sung Corporation | KOREA, REPUBLIC OF |
Gold | FSE Novosibirsk Refinery | RUSSIAN FEDERATION |
Gold | Heimerle + Meule GmbH | GERMANY |
Gold | Heraeus Ltd. Hong Kong | HONG KONG |
Gold | Heraeus Precious Metals GmbH & Co. KG | GERMANY |
Gold | Hwasung CJ Co. Ltd | KOREA, REPUBLIC OF |
Gold | Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited | CHINA |
Gold | Japan Mint | JAPAN |
Gold | Jiangxi Copper Company Limited | CHINA |
Gold | JSC Ekaterinburg Non-Ferrous Metal Processing Plant | RUSSIAN FEDERATION |
Gold | JSC Uralectromed | RUSSIAN FEDERATION |
Gold | Kazzinc Ltd | KAZAKHSTAN |
Gold | Korea Metal Co. Ltd | KOREA, REPUBLIC OF |
Gold | Kyrgyzaltyn JSC | KYRGYZSTAN |
Gold | L' azurde Company For Jewelry | SAUDI ARABIA |
Gold | Lingbao Jinyuan Tonghui Refinery Co. Ltd. | CHINA |
Gold | LS-NIKKO Copper Inc. | KOREA, REPUBLIC OF |
Gold | Luoyang Zijin Yinhui Metal Smelt Co Ltd | CHINA |
Gold | Met-Mex Peñoles, S.A. | MEXICO |
Gold | Moscow Special Alloys Processing Plant | RUSSIAN FEDERATION |
Gold | Nadir Metal Rafineri San. Ve Tic. A.ª. | TURKEY |
Gold | Navoi Mining and Metallurgical Combinat | UZBEKISTAN |
Gold | OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastvetmet) | RUSSIAN FEDERATION |
Gold | OJSC Kolyma Refinery | RUSSIAN FEDERATION |
Gold | Prioksky Plant of Non-Ferrous Metals | RUSSIAN FEDERATION |
Gold | PT Aneka Tambang (Persero) Tbk | INDONESIA |
Gold | PX Précinox SA | SWITZERLAND |
Gold | Rand Refinery (Pty) Ltd | SOUTH AFRICA |
Gold | Sabin Metal Corp. | UNITED STATES |
Gold | SAMWON METALS Corp. | KOREA, REPUBLIC OF |
Gold | Schone Edelmetaal | NETHERLANDS |
Gold | Shandong Zhaojin Gold & Silver Refinery Co. Ltd | CHINA |
Gold | So Accurate Group, Inc. | UNITED STATES |
Gold | SOE Shyolkovsky Factory of Secondary Precious Metals | RUSSIAN FEDERATION |
Gold | The Great Wall Gold and Silver Refinery of China | CHINA |
Gold | The Refinery of Shandong Gold Mining Co. Ltd | CHINA |
Gold | Tongling nonferrous Metals Group Co.,Ltd | CHINA |
Gold | Torecom | KOREA, REPUBLIC OF |
Gold | YAMAMOTO PRECIOUS METAL CO., LTD. | JAPAN |
Gold | Yokohama Metal Co Ltd | JAPAN |
Gold | Zhongyuan Gold Smelter of Zhongjin Gold Corporation | CHINA |
Gold | Zijin Mining Group Co. Ltd | CHINA |
Tantalum | Changsha South Tantalum Niobium Co., Ltd. | CHINA |
Tantalum | King-Tan Tantalum Industry Ltd | CHINA |
Tin | China Tin Group Co., Ltd. | CHINA |
Tin | CNMC (Guangxi) PGMA Co. Ltd. | CHINA |
Tin | Cooper Santa | BRAZIL |
Tin | CV Serumpun Sebalai | INDONESIA |
Tin | CV United Smelting | INDONESIA |
Tin | EM Vinto | BOLIVIA |
Tin | Fenix Metals | POLAND |
Tin | Gejiu Zi-Li | CHINA |
Tin | Huichang Jinshunda Tin Co. Ltd | CHINA |
Tin | Jiangxi Nanshan | CHINA |
Tin | Kai Unita Trade Limited Liability Company | CHINA |
Not CFSP validated as DRC Conflict Free as of May 5, 2014 (CONTINUED) | ||
METAL | SMELTER OR REFINER NAME | COUNTRY |
Tin | Linwu Xianggui Smelter Co | CHINA |
Tin | Metallo Chimique | BELGIUM |
Tin | Minmetals Ganzhou Tin Co. Ltd. | CHINA |
Tin | Novosibirsk Integrated Tin Works | RUSSIAN FEDERATION |
Tin | PT Artha Cipta Langgeng | INDONESIA |
Tin | PT Babel Inti Perkasa | INDONESIA |
Tin | PT Bangka Putra Karya | INDONESIA |
Tin | PT Bangka Tin Industry | INDONESIA |
Tin | PT Belitung Industri Sejahtera | INDONESIA |
Tin | PT DS Jaya Abadi | INDONESIA |
Tin | PT Eunindo Usaha Mandiri | INDONESIA |
Tin | PT Mitra Stania Prima | INDONESIA |
Tin | PT Prima Timah Utama | INDONESIA |
Tin | PT REFINED BANGKA TIN | INDONESIA |
Tin | PT Sariwiguna Binasentosa | INDONESIA |
Tin | PT Stanindo Inti Perkasa | INDONESIA |
Tin | PT Tambang Timah | INDONESIA |
Tin | PT Timah (Persero), Tbk | INDONESIA |
Tin | PT Tinindo Inter Nusa | INDONESIA |
Tin | Rui Da Hung | TAIWAN |
Tin | Soft Metais, Ltda. | BRAZIL |
Tin | White Solder Metalurgia e Mineração Ltda. | BRAZIL |
Tin | Yunnan Chengfeng Non-ferrous Metals Co.,Ltd. | CHINA |
Tungsten | A.L.M.T. Corp. | JAPAN |
Tungsten | Chongyi Zhangyuan Tungsten Co., Ltd. | CHINA |
Tungsten | Dayu Weiliang Tungsten Co., Ltd. | CHINA |
Tungsten | Fujian Jinxin Tungsten Co., Ltd. | CHINA |
Tungsten | Ganzhou Huaxing Tungsten Products Co., Ltd. | CHINA |
Tungsten | Ganzhou Non-ferrous Metals Smelting Co., Ltd. | CHINA |
Tungsten | Ganzhou Seadragon W & Mo Co., Ltd. | CHINA |
Tungsten | Guangdong Xianglu Tungsten Industry Co., Ltd. | CHINA |
Tungsten | H.C. Starck Group | GERMANY |
Tungsten | Hunan Chenzhou Mining Group Co., Ltd. | CHINA |
Tungsten | Hunan Chunchang Nonferrous Metals Co., Ltd. | CHINA |
Tungsten | Japan New Metals Co., Ltd. | JAPAN |
Tungsten | Kennametal Fallon | UNITED STATES |
Tungsten | Kennametal Huntsville | UNITED STATES |
Tungsten | Tejing (Vietnam) Tungsten Co., Ltd. | VIETNAM |
Tungsten | Wolfram Bergbau und Hütten AG | AUSTRIA |
Tungsten | Wolfram Company CJSC | RUSSIAN FEDERATION |
Tungsten | Xiamen Tungsten Co., Ltd. | CHINA |
Tungsten | Zhuzhou Cemented Carbide Group Co., Ltd. | CHINA |