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Summary Results of the Survey concerning the Handling of Conflict Minerals (2017)

21 December 2017
Responsible Minerals Trade Working Group
Japan Electronics and Information Technology Industries Association

Develop an understanding of problems in the handling of conflict minerals by member companies of the JEITA "Responsible Minerals Trade Working Group" and incorporate what has been learned into future initiatives.
Survey Period:
August 23, 2017 to September 25, 2017
Survey Subjects:
44 member companies of JEITA Responsible Minerals Trade Working Group(responses received from 34 companies)
Participants at JEITA Conflict Minerals Inquiry Briefing (responses received from 272 participants (for selected questions))

Summary of Survey Results

The Responsible Minerals Trade Working Group conducted its 2nd survey this year, following its survey in 2015. Additionally, for the first time, JEITA conducted a survey to participants at the Conflict Minerals Inquiry Briefing that it holds every year in order to understand the situation surrounding the industry (for selected questions only). This Summary will mainly explain changes from the previous survey.

1. Understanding of Conflict Minerals Inquiries by the Supply Chain as a Whole has Improved

In Question 2, the survey subjects were asked of the contents of requests they received from their customer companies. The percentage of companies that answered that they received requests “to identify 100% of all smelters/refiners within a specific designated period”, ”to procure all goods from smelters/refiners that have obtained CFS validation, within a specific designated period” and “to submit a written statement that guarantees Conflict Free (incl. to sign contracts or declarations with conflict free provisions)” was high, however, compared to the previous survey of 2015, each of these answered declined around 10%, indicating that requests from customer companies that are difficult to achieve have declined as a whole. Looking at the data of each mineral in Question 6, the percentage of companies that answered that “there are suppliers that do not disclose smelters/refiners information” declined, compared to the previous survey of 2015 (59%→46~50%). From the above, it can be read that not only customers are playing an active role in conflict minerals inquiry, but suppliers are also taking a proactive stance.

2. Problems in Conflict Minerals Inquiry

As stated above, although it was found from this survey that cooperation from suppliers has increased, in the same Question 6, as reasons for answering "Not Possible” to identify all smelters/refiners, the percentage of the reason “It is difficult for suppliers to identify all smelters/refiners” (26%→91~96%), and “Measures are limited to verify the reliability of answers” (11%→46%~50%), increased sharply.
In other words, it was found from this survey that although customers and suppliers are both working actively on conflict minerals inquiries, many companies face challenges in the difficulty, reliability and effectiveness of the methods of survey.

(1) Difficulty of Identifying Smelters

Even though this was the fifth year in which conflict minerals inquiries were conducted pursuant to the Dodd-Frank Act, the percentage of companies that answered that they identified 100% of their smelters in Question 5 was found to be very low: 6~12% for JEITA members and 22~28% for participants in the briefing.
In addition, in regard to Question 6 “Do you think it is possible to identify all smelters/refiners through conflict minerals inquiries?”, the percentage that answered “identified 100% or it is possible (to identify 100%)” was only 15~22%, indicating that many companies consider it difficult to identify all smelters in the future.

(2) Difficulty of Procurement of all 3TG from CFS

The percentage that answered “Not Possible” to procure all goods from CFS (Conflict Free Smelters) in Question 8 reached 65%~68%. Also, the percentage that answered "Possible”, compared to the previous survey of 2015, declined in Tantalum, Tungsten and Gold, especially declined sharply in Tantalum (24%→13%) and Gold (23→12%). Companies find it difficult to procure all 3TG from CFS.

(3) Limits to Conflict Minerals Inquiry

Looking at Question 9, there were no companies that “identified smelters linked to armed groups” in this conflict minerals Inquiry. Question 11 asked the reason why the company decided to avoid procurement from a specific smelter, and a large percentage answered that “Information from investigations conducted by customer companies/downstream companies (83%)” or “Information from NGO's or the media (33%)” was the basis of their decision. This shows that survey of conflict minerals cannot identify links with conflicts and that there are limits in this inquiry methods.

3. Summary

Since 2013, under the US Dodd-Frank Act, many companies worldwide have sincerely conducted conflict minerals inquiries. As can be seen from this year’s survey, cooperation from suppliers have increased and visualization of supply chain has progressed from the previous survey of 2015, and positive outlook can be seen as awareness in the supply chain as a whole has increased.

On the other hand, even after 5 years from the start of this inquiry, only few companies consider it possible to identify all their smelters/refiners or to procure 100% of 3TG from CFS. This could be because many companies have come to truly understand the complexity of the supply chain for mineral procurement.

From a humanitarian perspective, many companies hope for a true resolution of the conflict mineral issue. Based on the problems of currently implemented conflict minerals inquiries, more effective and efficient methods that are in accord with the actual business situation must be sought. JEITA will expend every effort to contribute to the realization of such better methods.

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