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First Conflict Minerals Report Filed With SEC

Jaclyn Jaeger | April 28, 2014

Taiwan-based Siliconware Precision Industries Ltd. (SPIL) last week filed the first conflict minerals report to the Securities and Exchange Commission.

As part of the Dodd-Frank Act, the SEC issued rules that require public companies to disclose their use of tantalum, tin, gold, or tungsten that originated in the Democratic Republic of the Congo or an adjoining country. The mining of such metals has been used to fund militia groups that have committed human rights abuses.

Issuers must file their first Form SD—a new form created for conflicts minerals reporting and other “special disclosures”—and accompanying conflict minerals reports and auditor attestations, by June 2 (the SEC's annual May 31 deadline gets bumped back because it falls on a Saturday).

Report Details

In accordance with the rules, Siliconware Precision Industries (SPI) undertook due diligence to determine the conflict minerals status of the conflict minerals used in its semiconductor packaging services. In conducting its due diligence, SPIL said it implemented the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, an internationally recognized due diligence framework.

SPIL said its due diligence measures included conducting a supply-chain survey with direct suppliers of materials containing conflict minerals using the Electronic Industry Citizenship Coalition and Global e-Sustainability initiative Conflict Minerals Reporting Template to identify the smelters and refiners who provide those conflict minerals to its suppliers.

“As a company in the semiconductor packaging business, SPIL is several levels removed from the actual mining of conflict minerals,” the company stated. “SPIL does not make purchases of raw ore or unrefined conflict minerals and makes no purchases in the covered countries.”

SPIL's due diligence measures also included comparing the smelters and refiners identified in the supply-chain survey against the list of smelter facilities which have been identified as “conflict free” by programs such as the EICC/GeSI Conflict Free Smelter (CFS) program for tantalum, tin, tungsten, and gold.

“SPIL has determined in good faith that for calendar year 2013, its conflict minerals status resulting from its due diligence efforts shows a portion to be ‘DRC conflict undeterminable' and the remainder to be ‘DRC conflict free,'” the company stated. 

“In the next compliance period, SPIL intends to implement steps to improve the information gathered from its due diligence to further mitigate the risk that its necessary conflict minerals do not benefit armed groups,” the company stated.

These steps include increasing the response rate of suppliers' smelters surveys, including integrated circuits suppliers. It also intends to inform the smelters identified as a result of the supply-chain survey and request their participation in a program such as the CFS program to obtain a “conflict free” designation.

More to Come

A ruling by the U.S. Court of Appeals for the District of Columbia Circuit earlier this month ruled that conflict minerals disclosures made on company Websites is unconstitutional, compelled speech. The ruling now heads to a lower court for a review of whether the SEC's rulemaking, or language in the Dodd-Frank statute itself, caused the free speech conflict.