UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SD
SPECIALIZED DISCLOSURE REPORT
KONINKLIJKE PHILIPS N.V.
(Exact name of the Registrant as specified in its charter)
ROYAL PHILIPS
(Translation of Registrants name into English)
The Netherlands | 001-05146-01 | None | ||
(State or other jurisdiction of Incorporation or organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
Breitner Center, Amstelplein 2, Amsterdam, The Netherlands | 1096 BC | |
(Address of principal executive offices) | (Zip code) |
Marnix van Ginneken, Chief Legal Officer & Secretary to the Board of Management
+31 20 59 77232, marnix.van.ginneken@philips.com, Breitner Center
Amstelplein 2, 1096 BC Amsterdam, The Netherlands
(Name and telephone number, including area code, of the Person to contact in connection with this report.)
Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:
x | Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2013. |
Section 1 - Conflict Minerals Disclosure
Koninklijke Philips N.V. evaluated its current product lines and determined that certain products we manufacture or contract to manufacture contain tin, tungsten, tantalum and/or gold (3TG). We have not been able to confirm the identification of and conflict-free status under the CFSP standards for all smelters used in our supply chain. None of the smelters identified in our supply chain is known to us as sourcing 3TG that directly or indirectly finances or benefits armed groups in the covered countries. As a result we have filed a Conflict Minerals Report and that Report is incorporated by reference in this Section 1.
Conflict Minerals Disclosure
A copy of The Companys Conflict Minerals Report is provided as Exhibit 1.02 hereto and is publicly available at: http://www.philips.com/suppliers under Conflict Minerals.
Section 2 - Exhibits
Exhibit 1.02 - Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the duly authorized undersigned.
KONINKLIJKE PHILIPS N.V. |
Date: June 2, 2014 |
/s/ M.J. van Ginneken |
M.J. van Ginneken |
General Secretary |
* * * * *
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Exhibit 1.02
Philips Conflict Minerals Report
This Conflict Minerals Report for Koninklijke Philips N.V. (hereafter Philips, we, us or our) covers the reporting period from January 1st to December 31st, 2013, and is presented in accordance with the Securities Exchange Act of 1934, Rule 13p-1 (the conflict minerals law) and the requirements of Form SD.
This Conflict Minerals Report is filed as Exhibit 1.01 to our Specialized Disclosure Report on Form SD and is also posted on the Philips conflict minerals website.
Table of Contents
1 Introduction |
2 | |||
1.1 Philips |
3 | |||
1.2 Supply chain |
3 | |||
2 Due Diligence |
4 | |||
2.1 Due Diligence Design Framework* |
4 | |||
2.2 Due Diligence Design and Due Diligence Measures Performed* |
4 | |||
3 Due Diligence Determination |
9 | |||
3.1 Results of RCOI |
10 | |||
3.2 Analysis of our products in light of due diligence results |
11 | |||
3.3 Determination |
12 | |||
3.4 List of products, smelters and country of origin |
12 | |||
3.5 Steps to improve due diligence |
18 | |||
4 Independent private sector audit |
18 | |||
5 Data sources used |
18 | |||
6 Abbreviations |
18 | |||
Exhibit A |
19 |
* | The design of the due diligence framework, as set forth in Section 2.1 and the description of the due diligence measures the Company performed as set forth in column Due Diligence Measures Performed in section 2.2 of this report, have been audited by KPMG, our independent private sector auditor. The audit report is set forth as Exhibit A in this Conflict Minerals Report. |
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1 Introduction
The Democratic Republic of the Congo (DRC) and its adjoining countries have significant reserves of tin, tantalum, tungsten and gold (known as 3TG). All of these minerals are commonly used in the manufacturing of consumer products. Various parties, including the United States Congress, have concerns that the exploitation and trade of conflict minerals by armed groups is helping to finance conflict in the DRC region and is contributing to an emergency humanitarian crisis. The DRC produces 19% of the world tantalum production and less than 2% of the world production for tin, tungsten and gold (source: U.S. Geological Survey Minerals Commodity Summaries 2014).
In 2010, the United States Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act). Section 1502 of the Act specifically relates to conflict minerals and requires persons to disclose annually whether any conflict minerals that are necessary to the functionality or production of a product of the person, as defined in the provision, originated in the Democratic Republic of the Congo or an adjoining country and, if so, to provide a report describing, among other matters, the measures taken to exercise due diligence on the source and chain of custody of those minerals. Section 1502 was subsequently included in Rule 13p-1 under the Securities and Exchange Act 1934. The Rule imposes certain reporting obligations on SEC registrants (issuers of securities that are required to file annual and quarterly reports with the United States Securities and Exchange Commission (SEC)) whose manufactured products contain 3TG, and who have reason to believe that the products they manufacture or contract to manufacture, contain conflict minerals that are necessary to the functionality or production of those products. If the SEC registrant has reason to believe that any of the 3TG used may have originated in the Democratic Republic of Congo or an adjoining country, or is unable to determine the country of origin of those conflict minerals, the SEC registrant is required to annually file a Form SD with the SEC to disclose certain facts about the 3TG used in their products, and, if required, to file a Conflict Minerals Report, including a description of the measures it took to exercise due diligence on the 3TG (also known as conflict minerals) source and chain of custody.
Philips has concluded in good faith, that:
| Philips has manufactured and contracted to manufacture products as to which conflict minerals are necessary to the functionality or production of our products; |
| Based on the Reasonable Country or Origin Inquiry, Philips knows or has reason to believe that a portion of its necessary conflict minerals originated or may have originated from the DRC or adjoining countries and knows or has reason to believe that those minerals may not be solely from recycled or scrap sources. |
Pursuant to the Rule, Philips therefore undertook due diligence measures on the source and chain of custody of those necessary conflict minerals.
As a result, Philips is filing this Conflict Minerals Report with Form SD to comply with the requirements of Rule 13p-1 of the Securities and Exchange Act 1934.
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1.1 Philips
Royal Philips (NYSE: PHG, AEX: PHIA) is a diversified health and well-being company, focused on improving peoples lives through meaningful innovation in the areas of Healthcare, Consumer Lifestyle and Lighting. Headquartered in the Netherlands, Philips posted 2013 sales of EUR 23.3 billion and employs approximately 112,000 employees with sales and services in more than 100 countries. The company is a leader in cardiac care, acute care and home healthcare, energy efficient lighting solutions and new lighting applications, as well as male shaving and grooming and oral healthcare. The company is organized around three sectors:
| Healthcare |
including the following business groups: Imaging Systems, Patient Care & Clinical Informatics, Home Healthcare Solutions, Customer Services
| Lighting |
including the following business groups: Light Sources & Electronics, Consumer Luminaires, Professional Lighting Solutions, Automotive Lighting, Lumileds
| Consumer Lifestyle |
including the following business groups: Health & Wellness, Personal Care, Domestic Appliances
Above business groups cover a wide product portfolio, including thousands of different products. Some examples of principal products include:
| CT scanners, ECG equipment, mammography equipment, monitoring equipment, MRI scanners, radiography equipment, resuscitation equipment, ultrasound equipment and X-ray equipment |
| LEDs, eco-halogen, (compact) fluorescent, high-intensity discharge and incandescent light sources, luminaires for the consumer market, controls and luminaires for city beautification, road lighting, sports lighting, office lighting, shop/hospitality lighting, industry lighting, and car headlights and signaling |
| Projectors, shavers, toothbrushes, baby monitors, bottles, breast pumps, coffee makers, kitchen appliances, vacuum cleaners and air purification products |
One or more of the 3TG metals are contained in the vast majority of Philips products, typically in small quantities.
1.2 Supply chain
The supply chain for 3TG consists of many tiers. Before reaching Philips direct suppliers, 3TG will go from mines, to traders, exporters, smelters or refiners (referred to as smelters), alloy producers and component manufacturers, and sometimes intermediate suppliers. Since one or more of the 3TG metals are contained in the vast majority of Philips products, the majority of Philips suppliers also use these metals in their products. Philips sources products and components from approximately 10,000 first tier suppliers globally. First tier suppliers are those suppliers that Philips selected and with whom we have a direct business relationship. These first tier suppliers select their suppliers (second tier suppliers), which in turn have their own group of suppliers (third tier), and so on. In a typical case, there may be seven or more tiers in the supply chain between a 3TG mine and Philips first tier suppliers. Philips works with and through its first tier suppliers to investigate the deeper levels of our supply chain, in an effort to determine the origin of 3TG contained in Philips products.
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Due to Philips position in the supply chain and limited insight in and leverage over the deeper levels of the supply chain, we engage and actively cooperate with other industry members via our participation in the Conflict Free Sourcing Initiative (CFSI). We use the tools and programs developed by the CFSI, especially the Conflict Minerals Reporting Template (CMRT) and the Conflict Free Smelter Program (CFSP).
2 Due Diligence
2.1 Due Diligence Design Framework*
Our conflict minerals due diligence measures for the reporting period 2013 have been designed to conform with the Organization for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, Second Edition (the OECD Guidance).
This section is subject to the Independent Private Sector Audit as referred to in section 4.
2.2 Due Diligence Design and Due Diligence Measures Performed*
The following overview provides a summary of Philips due diligence design in accordance with the five steps of the OECD Guidance and due diligence measures performed. The activities described in the Design column of these steps were used during the reporting period and we intend to use these steps during future reporting periods (along with any additional steps that Philips implements to enhance and improve the diligence process) to identify and mitigate risk.
Philips conducted due diligence measures on the source and chain of custody of our conflict minerals to ascertain whether these conflict minerals originated in the Democratic Republic of Congo or any of its adjoining countries and finance or benefit armed groups in any of these countries. The Due Diligence Measures Performed listed in the table below are subject to the Independent Private Sector Audit as referred to in section 4 of this report.
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Step 1: Establish strong company management systems. | ||||
A | Adopt and commit to a supply chain policy | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
Philips will design a position paper on responsible sourcing in relation to conflict minerals.
In line with the OECD Guidance, Philips has committed not to purchase raw materials, subassemblies, or supplies which we know contain conflict minerals that directly or indirectly finance or benefit armed groups in the DRC or an adjoining country. Philips joined the Electronics Industry Citizenship Coalition (EICC) in 2006, and has been an active member of the CFSI. The CFSI is an initiative of the electronics and mobile phone industry organizations EICC and GeSI (Global e-Sustainability Initiative), which seeks to prevent minerals that directly or indirectly finance the DRC conflict from entering the electronics supply chain.
Philips program goals are:
Minimizing the trade in conflict minerals from mines that directly or indirectly finance or benefit armed groups in the DRC or an adjoining country.
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.
The Philips Position Paper is posted on the companys conflict minerals website and is communicated to all priority suppliers.
The content of any website referred to in this Conflict Minerals Report is included for general information only and is not incorporated by reference in the Conflict Minerals Report or Form SD.
|
Philips adopted the position paper on responsible sourcing in relation to conflict minerals. | |||
B | Internal management systems | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
Philips created an internal conflict minerals team to manage the implementation and progress of our due diligence efforts. The internal team consists of representatives from Procurement at group and sector level, Sustainability, Finance and Control, Legal and the Ethics Office.
|
The conflict minerals team met once a month to review progress and results of supplier data collection, supplier due diligence and smelter identification. | |||
C | System of controls and transparency over the conflict minerals supply-chain | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
Philips established a system of controls and transparency over its 3TG supply chains by creating a process to engage a group of first tier priority suppliers (as defined below) and request them to submit information to Philips using the CMRT. The CMRT is a | Philips reached out to priority suppliers requesting suppliers to fill out the CMRT. We contacted suppliers on CMRT responses that we identified contained incomplete or potentially inaccurate information to seek additional clarifying information. |
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survey tool developed by the CFSI to standardize collection of due diligence information in the supply chain. The information submitted by priority suppliers includes information gathered by those suppliers about the smelters identified in their own supply chains. The information is used by Philips to assess due diligence efforts implemented by suppliers, and to identify smelters.
|
We compared smelters identified by priority suppliers against the list of smelters that successfully passed the CFSP or equivalent assessment, thereby confirming their conflict-free status under the CSFP standards. | |||
D | Engagement with suppliers | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
The Philips Supplier Sustainability Declaration (SSD) includes a provision about conflict minerals. The SSD is part of the supplier contracts and requires suppliers to have a policy to reasonably assure that their 3TG does not directly or indirectly finance or benefit armed groups that are perpetrators of serious human rights abuses in the DRC or an adjoining country, and to exercise due diligence on the source and chain of custody.
For first tier suppliers in risk-countries Philips has a supplier sustainability audit program in place, in which implementation of the SSD is assessed. Conflict minerals is one of the topics covered in these audits. In case non-conformances are identified during the audit, suppliers are requested to make a corrective action plan and Philips monitors the implementation of this plan until the non-conformance is closed.
Suppliers are requested to adopt a DRC Conflict Free policy and to identify all 3TG smelters in their supply chain.
Training materials, webinars, and a helpdesk is available to increase awareness amongst suppliers and to help suppliers meet our expectations. |
Philips reached out to priority suppliers via a supplier letter, explaining our expectations and requesting suppliers to fill out the CMRT. The supplier letter is posted on the companys conflict minerals website and was communicated to all priority suppliers.
We invited all priority suppliers to attend webinar trainings that we provided in English and Chinese.
When lack of progress was observed in supplier CMRT collection, or when the supplier CMRT did not meet our acceptance criteria (see step 2A below) the Philips helpdesk and Philips buyers worked with suppliers towards meeting Philips CMRT acceptance criteria.
The content of any website referred to in this Conflict Minerals Report is included for general information only and is not incorporated by reference in the CMR or Form SD.
| |||
E | Grievance mechanism | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
Multiple communication channels exist to serve as grievance mechanisms for early-warning risk awareness. Internally, Philips has a hotline available to its personnel to report anonymously possible violations of Philips General Business Principles and other policies. Externally, concerns can be reported via existing industry grievance mechanisms like ITRIs Tin Supply Chain Initiative. Philips actively participates in the following groups which served as an early-warning risk-awareness system:
CFSI
Joint Forum on Responsible Mineral Supply Chains hosted by the Secretariat to the International |
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Conference on the Great Lakes Region (ICGLR), the OECD and the United Nations Group of Experts on the DRC (UN GoE)
|
||||
Step 2: Identify and assess risk in the supply chain. | ||||
A | Identify smelters in the supply chain | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
Given the size and diversity of our supplier base, we choose to focus our efforts on a group of first tier priority suppliers and work with them to identify the smelters in our supply chain. Priority suppliers are selected based on:
Purchasing spend
The selected priority suppliers cover the top 80% spend.
Philips used a system to classify suppliers in commodity groups, for example plastics, packaging, and metals. Philips excluded suppliers in commodity groups for which it is unlikely that one or more of the 3TGs is contained in the products.
Usage of 3TG Suppliers with products that contain a high quantity of 3TG were selected as priority suppliers regardless of the purchasing spend with these suppliers. For example solder suppliers: since the main component of solder is tin, all solder suppliers are selected as priority suppliers.
All identified priority suppliers are requested to investigate their supply chain to identify smelters and country of origin of the conflict minerals and report back to Philips using the CMRT.
Philips reviews all received supplier CMRTs and assesses whether it meets our acceptance criteria related to completeness, adoption of a conflict-free policy, data collection from next tier suppliers, and smelter identification and disclosure. Suppliers with a CMRT that does not meet the acceptance criteria are requested to take corrective actions and update their CMRT accordingly.
We review the supplier CMRTs to determine if there are any findings that indicate a need to conduct further due diligence and gather more detailed information. An example of such a finding is when suppliers indicate that their 3TG metals originate from the DRC or adjoining countries.
|
The identified priority suppliers were requested to investigate their supply chain and report back to Philips using the CMRT. Philips reviewed all received supplier CMRTs and assessed whether it met our acceptance criteria related to completeness, adoption of a conflict-free policy, data collection from next tier suppliers, and smelter identification and disclosure. Suppliers with a CMRT that did not meet the acceptance criteria, did not provide complete information or provided information that was potentially inaccurate, were requested to take corrective actions and update their CMRT accordingly.
We reviewed the received supplier CMRTs to determine if there were any findings that indicated a need to conduct further due diligence and gather more detailed information. | |||
B | Identify the scope of the risk assessment | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
Philips evaluated the identified smelters based on the information available, in order to determine whether it | We compared smelters identified in supplier CMRTs against the list of smelters |
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is reasonable to believe that they are sourcing from a covered country. Philips uses the CFSP compliant smelter list and any other lists that have been recognized by the CFSI, including the London Bullion Metal Association (LBMA) and Responsible Jewelry Council (RJC) lists for gold.
If available, we will also use other sources of information to assess potential risk, for example, publicly available reports and direct information that Philips may have about a smelters sourcing practices.
|
that have received a conflict free designation from the CFSP or other independent third party audit program. | |||
C & D | Assess whether smelters carried out due diligence and carry out joint spot checks | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
Philips relies on industry programs like the CFSP to carry out smelter assessments, and we rely on the CFSP compliant smelter list to determine whether smelters performed due diligence.
|
||||
Step 3: Design and implement a strategy to respond to identified risks. | ||||
A | Report findings to designated senior management | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
Progress and findings of the supply chain risk assessment are reported to senior management through quarterly and monthly reporting. | In total nine progress reports were shared with senior management and the main topics addressed included:
Progress of CMRT collection from priority suppliers
Status of supplier CMRTs meeting our acceptance criteria
Observed bottlenecks and resolution paths in getting suppliers to meet our CMRT acceptance criteria
| |||
B | Devise and adopt a risk management plan | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
The risk management plan adopted by Philips is in accordance with its policy to ultimately discontinue doing business with any supplier found to be purchasing tungsten, tantalum, tin or gold material which directly or indirectly finances or benefits armed groups in the DRC or adjoining countries.
|
||||
C | Implement the risk management plan, monitor and track performance of risk mitigation, report back to designated senior management and consider suspending or discontinuing engagement with a supplier after failed attempts at mitigation | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
To monitor and track performance of risk management efforts, Philips relies on supplier CMRTs and updates of the CFSP compliant smelter list. The status is discussed internally in monthly reviews with the conflict minerals team and reported to senior management. |
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D | Undertake additional fact and risk assessments for risks requiring mitigation, or after a change of circumstances | |||
Due Diligence Design | Due Diligence Measures Performed * | |||
We request priority suppliers to update and resend their CMRT when additional information becomes available. When updates are received, step 2 is repeated to assess and mitigate risks.
|
||||
Step 4: Carry out independent third-party audit of supply chain due diligence at identified points in the supply chain. | ||||
Plan and implement third party smelter audits | ||||
Due Diligence Design | Due Diligence Measures Performed * | |||
Philips contributes to the CFSI as a member company, and encourages smelters to participate in the CFSP through direct communication and smelter outreach communication, as well as by signing on to industry letters that are sent to smelters. | As a member of the CFSI, we leveraged the due diligence conducted on smelters by the CFSIs Conflict-Free Smelter Program (CFSP). This program uses independent third-party auditors to audit the source and chain of custody of the conflict minerals used by smelters that agree to participate in the CFSP.
| |||
Step 5: Report annually on supply chain due diligence. | ||||
Due Diligence Design | Due Diligence Measures Performed * | |||
Philips reports annually on supply chain due diligence by filing the form SD with the Conflict Minerals Report.
Furthermore, in its Annual Report Philips publicly reports about conflict minerals since 2009. |
Philips publicly made available on its conflict minerals website the Philips Conflict Minerals Declaration, including a list of all smelters identified by our first tier suppliers during 2013.
We file with the SEC our Conflict Minerals Report (and the Exhibits thereto) as Exhibit 1.01 to Form SD and makes the report available on our conflict minerals website.
The content of any website referred to in this Conflict Minerals Report is included for general information only and is not incorporated by reference in the Conflict Minerals Report or Form SD. |
3 Due Diligence Determination
In line with step 2 of the above described due diligence design and measures, Philips undertook in 2013 a reasonable country of origin inquiry (RCOI) to determine whether the necessary conflict minerals in Philips products originated from the DRC or adjoining countries. Philips undertook the above described due diligence measures, to exercise due diligence on the source and chain of custody of the necessary conflict minerals contained in our products that we had reason to believe may have originated from the DRC or adjoining countries and may not have come from recycled or scrap sources. Below sections summarize the results of the RCOI and due diligence measures performed.
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3.1 Results of RCOI
Philips identified 349 priority suppliers and used the data provided by these suppliers in their CMRTs to identify the smelters in the Philips supply chain and that therefore may have been used to process 3TG metals contained in Philips products. 94% of these priority suppliers submitted a CMRT to Philips and provided names of close to 1000 different entities on their smelter lists. We used the CFSI smelter reference list as a reference to determine whether the identified entities are recognized smelters. The 2013 version of the CFSI smelter reference list includes 198 names of known smelters. Philips identified 191 of these smelters to also be in our supply chain. The majority of these are located in Asia, with China as the main country.
To the best of our knowledge, none of the smelters identified in our supply chain are known to source minerals that benefit armed groups in the DRC.
In the CMRTs received during the reporting period, 85 suppliers indicated that their products contain 3TG metals that originated from the DRC or adjoining countries. We requested these suppliers to provide additional information to confirm the conflict-free status of their supply chains. For 5 suppliers we were not able to collect all additional information. The other 80 suppliers have disclosed the names of all smelters that processed the 3TG originating from the DRC or adjoining countries, and they were all CFSP compliant.
Philips did not discontinue business with suppliers because we did not have a reason to believe that any of our suppliers was purchasing 3TG which directly or indirectly finances or benefits armed groups in the DRC or adjoining countries.
68 (36%) of the identified smelters successfully passed the CSFP or equivalent assessment, thereby confirming their conflict-free status. The remaining 123 (64%) identified smelters did not complete an independent third party audit to confirm their conflict-free status. |
|
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To determine the country of origin for the identified smelters, we rely on the CFSI Reasonable Country of Origin Inquiry data. For the 68 CFSP compliant smelters identified in our supply chain we concluded that:
| 9 smelters source from the DRC or adjoining countries |
| 27 smelters do not source from the DRC or adjoining countries |
| 6 smelters process only recycled or scrap materials |
| 26 smelters did not disclose their sourcing countries |
For the 123 smelters that did not complete a CFSP or equivalent assessment, we were unable to confirm their sourcing countries.
Results RCOI
3.2 Analysis of our products in light of due diligence results
Given Philips large product portfolio and supplier base, collecting supply chain information on a product level would be complex. Philips does not have component level information from all of our 10,000 first tier suppliers, and we are therefore unable to report for each specific Philips product. Our approach is to conduct supply chain due diligence and report on the company level for our entire product portfolio, which allows us to focus our efforts on building, maintaining, and improving a robust due diligence program that makes a difference for the communities in the DRC or adjoining countries.
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3.3 Determination
As a result of the RCOI and Due Diligence Measures Performed, Philips provides below the known facilities (smelters) that may have been used to process 3TG metals contained in Philips products, and the metals country of origin. The country of origin information is based on the CFSI Reasonable Country of Origin Inquiry data.
We have not been able to confirm the identification of and conflict-free status under the CFSP standards for all smelters used in our supply chain. None of the smelters identified in our supply chain is known to us as sourcing 3TG that directly or indirectly finances or benefits armed groups in the DRC or adjoining countries.
3.4 List of products, smelters and country of origin
This Conflict Minerals Report covers Philips entire product portfolio. Please refer to page 3 for a description of Philips products.
The table below represents a consolidated list of the smelters (191 in total) reported by our priority suppliers as a result of the 2013 CMRT survey. Based on the supplier data provided to us and the CFSP compliant smelter list, we conclude the following.
For Tin, of the below listed facilities:
| 1 is known to source from the DRC and this facility is conflict-free within the CFSP standard |
| 9 are known to source from outside the DRC or adjoining countries |
| 1 is known to process only recycled or scrap materials |
| 52 with undeterminable origin and undeterminable conflict-free status |
For Tantalum, of the below listed facilities:
| 5 are known to source from the DRC and all these facilities are conflict-free within the CFSP standard |
| 3 are known to source from the DRC adjoining countries (not from the DRC itself) and are CFSP compliant |
| 6 are known to source from outside the DRC or adjoining countries |
| 5 are known to process only recycled or scrap materials |
| 2 with undeterminable origin and undeterminable conflict-free status |
For Tungsten, of the below listed facilities:
| None are known to source from the DRC or adjoining countries |
| 1 is known to source from outside the DRC or adjoining countries |
| 19 with undeterminable origin and undeterminable conflict-free status |
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For Gold, of the below listed facilities:
| None are known to source from the DRC or adjoining countries |
| 26 did not disclose their sourcing country of origin and are CFSP compliant |
| 11 are known to source from outside the DRC or adjoining countries |
| 50 with undeterminable origin and undeterminable conflict-free status |
List of Known Facilities processing conflict minerals for DRC Conflict Undeterminable Products
Metal |
Facility Name |
Conflict-Free Status1 | ||
Gold | Aida Chemical Industries | Undeterminable | ||
Gold | Allgemeine Gold- und Silberscheideanstalt A.G. | Conflict-Free | ||
Gold | Almalyk Mining and Metallurgical Complex (AMMC) | Undeterminable | ||
Gold | AngloGold Ashanti Mineração Ltda | Conflict-Free | ||
Gold | Argor-Heraeus SA | Conflict-Free | ||
Gold | Asahi Pretec Corp | Conflict-Free | ||
Gold | Asaka Riken Co Ltd | Undeterminable | ||
Gold | Atasay Kuyumculuk Sanayi Ve Ticaret A.S. | Undeterminable | ||
Gold | Aurubis AG | Undeterminable | ||
Gold | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) | Undeterminable | ||
Gold | Boliden AB | Undeterminable | ||
Gold | Caridad | Undeterminable | ||
Gold | Cendres & Metaux SA | Undeterminable | ||
Gold | Central Bank of the DPR of Korea | Undeterminable | ||
Gold | Chimet | Conflict-Free | ||
Gold | Chugai Mining | Undeterminable | ||
Gold | Codelco | Undeterminable | ||
Gold | Daejin Indus Co. Ltd | Undeterminable | ||
Gold | DaeryongENC | Undeterminable | ||
Gold | Do Sung Corporation | Undeterminable | ||
Gold | Dowa Kogyo k.k | Conflict-Free | ||
Gold | FSE Novosibirsk Refinery | Undeterminable | ||
Gold | Heimerle + Meule GmbH | Undeterminable | ||
Gold | Heraeus Ltd Hong Kong | Conflict-Free | ||
Gold | Heraeus Precious Metals GmbH & Co. KG | Conflict-Free | ||
Gold | Hwasung CJ Co. Ltd | Undeterminable | ||
Gold | Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited | Undeterminable | ||
Gold | Ishifuku Metal Industry Co., Ltd. | Conflict-Free | ||
Gold | Istanbul Gold Refinery | Conflict-Free |
1 | This categorization is based on the CFSP standards. All CFSP compliant smelters are listed here as conflict-free. |
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Gold | Japanese Mint Osaka | Undeterminable | ||
Gold | Jiangxi Copper Company Limited | Undeterminable | ||
Gold | Johnson Matthey Canada | Conflict-Free | ||
Gold | Johnson Matthey Limited | Conflict-Free | ||
Gold | JSC Ekaterinburg Non-Ferrous Metal Processing Plant | Undeterminable | ||
Gold | JSC Uralectromed | Undeterminable | ||
Gold | Kazzinc Ltd | Undeterminable | ||
Gold | Kojima Chemicals Co. Ltd | Conflict-Free | ||
Gold | Korea Metal | Undeterminable | ||
Gold | Kyrgyzaltyn JSC | Undeterminable | ||
Gold | L azurde Company For Jewelry | Undeterminable | ||
Gold | LS-Nikko Copper Inc | Conflict-Free | ||
Gold | Materion Advanced Metals | Conflict-Free | ||
Gold | Matsuda Sangyo Co. Ltd | Conflict-Free | ||
Gold | Metalor Technologies (Hong Kong) Ltd | Conflict-Free | ||
Gold | Metalor Technologies SA | Conflict-Free | ||
Gold | Metalor USA Refining Corporation | Conflict-Free | ||
Gold | Met-Mex Peñoles, S.A. | Undeterminable | ||
Gold | Mistubishi Materials Corporation | Conflict-Free | ||
Gold | Mitsui Mining and Smelting Co., Ltd. | Conflict-Free | ||
Gold | Moscow Special Alloys Processing Plant | Undeterminable | ||
Gold | Nadir Metal Rafineri San. Ve Tic. A.Ş. | Undeterminable | ||
Gold | Navoi | Undeterminable | ||
Gold | Nihon Material Co. LTD | Conflict-Free | ||
Gold | Ohio Precious Metals LLC. | Conflict-Free | ||
Gold | OJSC The Gulidov Krasnoyarsk Non-Ferrous Metals Plant (OJSC Krastvetmet) | Undeterminable | ||
Gold | OJSC Kolyma Refinery | Undeterminable | ||
Gold | PAMP SA | Conflict-Free | ||
Gold | Pan Pacific Copper | Undeterminable | ||
Gold | Prioksky Plant of Non-Ferrous Metals | Undeterminable | ||
Gold | PT Aneka Tambang (Persero) Tbk | Undeterminable | ||
Gold | PX Précinox SA | Undeterminable | ||
Gold | Rand Refinery | Conflict-Free | ||
Gold | Royal Canadian Mint | Conflict-Free | ||
Gold | Sabin Metal Corp. | Undeterminable | ||
Gold | Saganoseki Smelter & Refinery | Conflict-Free | ||
Gold | SAMWON METALS Corp. | Undeterminable | ||
Gold | Schone Edelmetaal | Undeterminable | ||
Gold | SEMPSA Joyeria Plateria SA | Conflict-Free | ||
Gold | Shandong Gold Mining (Laizhou) | Undeterminable | ||
Gold | Shandong Zhaojin Gold & Silver Refinery Co. Ltd | Undeterminable |
Page 14 of 20
Gold | SOE Shyolkovsky Factory of Secondary Precious Metals | Undeterminable | ||
Gold | Solar Applied Materials Taiwan | Conflict-Free | ||
Gold | Sumitomo Metal Mining Co. Ltd. | Conflict-Free | ||
Gold | Suzhou Xingrui Noble | Undeterminable | ||
Gold | Tanaka Denshi Kogyo | Conflict-Free | ||
Gold | The Great Wall Gold and Silver Refinery of China | Undeterminable | ||
Gold | Tokuriki Tokyo Melters Assayers | Conflict-Free | ||
Gold | Torecom | Undeterminable | ||
Gold | Umicore Beligium | Conflict-Free | ||
Gold | Umicore Brasil Ltda | Undeterminable | ||
Gold | United Precious Metal Refining Inc. | Conflict-Free | ||
Gold | Valcambi SA | Conflict-Free | ||
Gold | Western Australian Mint trading as The Perth Mint | Conflict-Free | ||
Gold | Xstrata Canada Corporation | Conflict-Free | ||
Gold | Yokohama Metal Co Ltd | Undeterminable | ||
Gold | Zhongjin Gold Corporation Limited | Undeterminable | ||
Gold | Zijin Mining Group Co. Ltd | Undeterminable | ||
Tantalum | Conghua Tantalum and Niobium Smeltry | Conflict-Free | ||
Tantalum | Duoluoshan Sapphire Rare Metal Co. Ltd | Conflict-Free | ||
Tantalum | Exotech Inc. | Conflict-Free | ||
Tantalum | F&X Electro-Materials Limited | Conflict-Free | ||
Tantalum | Gannon & Scott | Undeterminable | ||
Tantalum | Global Advanced Metals | Conflict-Free | ||
Tantalum | H.C. Starck GmbH | Conflict-Free | ||
Tantalum | Hi-Temp | Conflict-Free | ||
Tantalum | JiuJiang JinXin Nonferrous Metals Co. Ltd. | Undeterminable | ||
Tantalum | JiuJiang Tambre Co. Ltd. | Conflict-Free | ||
Tantalum | Kemet Blue Powder | Conflict-Free | ||
Tantalum | Mitsui Mining & Smelting | Conflict-Free | ||
Tantalum | Ningxia Orient Tantalum Industry Co., Ltd. | Conflict-Free | ||
Tantalum | Plansee Group | Conflict-Free | ||
Tantalum | RFH | Conflict-Free | ||
Tantalum | Solikamsk Metal Works | Conflict-Free | ||
Tantalum | Taki Chemicals | Conflict-Free | ||
Tantalum | Tantalite Resources | Conflict-Free | ||
Tantalum | Telex | Conflict-Free | ||
Tantalum | Ulba | Conflict-Free | ||
Tantalum | Zhuzhou | Conflict-Free | ||
Tin | Alpha Metals | Conflict-Free | ||
Tin | China Minmetals Ganzhou Tin Co. Ltd. | Undeterminable | ||
Tin | CNMC (Guangxi) PGMA Co. Ltd. | Undeterminable |
Page 15 of 20
Tin | Cooper Santa | Undeterminable | ||
Tin | CV Duta Putra Bangka | Undeterminable | ||
Tin | CV Gita Pesona | Undeterminable | ||
Tin | CV Jus Tindo | Undeterminable | ||
Tin | CV Makmur Jaya | Undeterminable | ||
Tin | CV Nurjanah | Undeterminable | ||
Tin | CV Prima Timah Utama | Undeterminable | ||
Tin | CV Serumpun Sebalai | Undeterminable | ||
Tin | CV United Smelting | Undeterminable | ||
Tin | Empressa Nacional de Fundiciones (ENAF) | Undeterminable | ||
Tin | Fenix Metals | Undeterminable | ||
Tin | Gejiu Non-ferrous | Conflict-Free | ||
Tin | Gejiu Zili Metallurgy Co. | Undeterminable | ||
Tin | Gold Bell Group | Undeterminable | ||
Tin | Huichang Jinshunda Tin Co. Ltd | Undeterminable | ||
Tin | Hunan Chenzhou Mining Group Co | Undeterminable | ||
Tin | Indra Eramulti Logam | Conflict-Free | ||
Tin | Jiangxi Nanshan | Undeterminable | ||
Tin | Kai Unita Trade Limited Liability Company | Undeterminable | ||
Tin | Ketapang | Undeterminable | ||
Tin | Kundur | Undeterminable | ||
Tin | Linwu Xianggui Smelter Co | Undeterminable | ||
Tin | Liuzhou China Tin | Undeterminable | ||
Tin | Malaysia Smelting Corp | Conflict-Free | ||
Tin | Metallo Chimique | Undeterminable | ||
Tin | Mineração Taboca S.A. | Conflict-Free | ||
Tin | Minsur | Conflict-Free | ||
Tin | Mitsubishi Material | Conflict-Free | ||
Tin | Novosibirsk Integrated Tin Works | Undeterminable | ||
Tin | OMSA | Conflict-Free | ||
Tin | PT Alam Lestari Kencana | Undeterminable | ||
Tin | PT Artha Cipta Langgeng | Undeterminable | ||
Tin | PT Babel Inti Perkasa | Undeterminable | ||
Tin | PT Babel Surya Alam Lestari | Undeterminable | ||
Tin | PT Bangka Kudai Tin | Undeterminable | ||
Tin | PT Bangka Timah Utama Sejahtera | Undeterminable | ||
Tin | PT Belitung Industri Sejahtera | Undeterminable | ||
Tin | PT Bellitin Makmur Lestari | Undeterminable | ||
Tin | PT DS Jaya Abadi | Undeterminable | ||
Tin | PT Eunindo Usaha Mandiri | Undeterminable | ||
Tin | PT Fang Di MulTindo | Undeterminable |
Page 16 of 20
Tin | PT HP Metals Indonesia | Undeterminable | ||
Tin | PT Karimun Mining | Undeterminable | ||
Tin | PT Koba Tin | Undeterminable | ||
Tin | PT Mitra Stania Prima | Undeterminable | ||
Tin | PT Panca Mega | Undeterminable | ||
Tin | PT Refined Banka Tin | Undeterminable | ||
Tin | PT Sariwiguna Binasentosa | Undeterminable | ||
Tin | PT Seirama Tin investment | Undeterminable | ||
Tin | PT STANINDO INTI PERKASA | Undeterminable | ||
Tin | PT Sumber Jaya Indah | Undeterminable | ||
Tin | PT Timah | Undeterminable | ||
Tin | PT Timah Nusantara | Undeterminable | ||
Tin | PT Tinindo Inter Nusa | Undeterminable | ||
Tin | PT Tommy Utama | Undeterminable | ||
Tin | PT Yinchendo Mining Industry | Undeterminable | ||
Tin | Thailand Smelting and Refining Co. Ltd. | Conflict-Free | ||
Tin | White Solder Metalurgia | Conflict-Free | ||
Tin | Yunnan Chengfeng Non-Ferrous Metals Co Ltd | Undeterminable | ||
Tin | Yunnan Tin Company Limited | Conflict-Free | ||
Tungsten | Alldyne Powder Technologies | Undeterminable | ||
Tungsten | ALMT | Undeterminable | ||
Tungsten | Chaozhou Xianglu Tungsten Industry Co Ltd | Undeterminable | ||
Tungsten | Dayu Weiliang Tungsten Co., Ltd. | Undeterminable | ||
Tungsten | Fujian Jinxin Tungsten Co., Ltd. | Undeterminable | ||
Tungsten | Gan Bei Tungsten Industry | Undeterminable | ||
Tungsten | Ganzhou Grand Sea W & Mo Group Co Ltd | Undeterminable | ||
Tungsten | Ganzhou Huaxing Tungsten | Undeterminable | ||
Tungsten | Ganzhou Nonferrous Metals Smelting Co Ltd. | Undeterminable | ||
Tungsten | Global Tungsten & Powders Corp | Conflict-Free | ||
Tungsten | H.C. Starck GmbH | Undeterminable | ||
Tungsten | Hunan Chun-Chang Nonferrous Smelting & Concentrating Co., Ltd. | Undeterminable | ||
Tungsten | Japan New Metals Co Ltd | Undeterminable | ||
Tungsten | Kennametal Inc. | Undeterminable | ||
Tungsten | Tejing (Vietnam) Tungsten Co Ltd | Undeterminable | ||
Tungsten | Wolfram Bergbau und Hütten AG | Undeterminable | ||
Tungsten | Wolfram Company CJSC | Undeterminable | ||
Tungsten | Xiamen Tungsten Co Ltd | Undeterminable | ||
Tungsten | Zhangyuan Tungsten Co Ltd | Undeterminable | ||
Tungsten | Zhuzhou Cemented Carbide Works Imp. & Exp. Co. | Undeterminable |
Page 17 of 20
Country of origin for the minerals processed by above smelters
Angola, Argentina, Australia, Austria, Belgium, Brazil, Burundi, Central African Republic, Chile, China, Colombia, Côte DIvoire, Czech Republic, Djibouti, Egypt, Estonia, Ethiopia, France, Germany, Guyana, India, Indonesia, Ireland, Israel, Japan, Kenya, Laoa Peoples Democratic Republic, Luxembourg, Madagascar, Malaysia, Mongolia, Mozambique, Myanmar, Netherlands, Nigeria, Peru, Plurinational State of Bolivia, Portugal, Republic of Congo, Republic of Korea, Russian Federation, Rwanda, Sierra Leone, Singapore, South Africa, South Sudan, Suriname, Switzerland, Thailand, Uganda, United Kingdom of Great Britain and Northern Ireland, United Republic of Tanzania, United States of America, Zambia.
3.5 Steps to improve due diligence
For the next reporting year, Philips plans to continue its engagement with priority suppliers to investigate its supply chain. We will communicate to priority suppliers our expectation that they source only from CFSP compliant smelters as sufficient smelters for tin, tantalum, tungsten and/or gold become available.
Since one of the challenges in our due diligence process has been to identify and verify smelters, we will increase our efforts to investigate the entities that are not included on the CFSI smelter reference list. Furthermore, we plan to reach out to smelters that are not yet CFSP compliant, with the aim of increasing the number of smelters on the list of CFSP compliant smelters.
4 Independent private sector audit
We obtained an independent private sector audit of whether the design of our due diligence framework (as described in section 2.1) conforms to a recognized due diligence framework and whether our description of the due diligence in the Conflict Minerals Reports (as described in column Due Diligence Measures Performed in section 2.2) is consistent with the due diligence we undertook. This report is set forth in Exhibit A to this report.
5 Data sources used
| CFSI Reasonable Country of Origin Inquiry Data - version March 28, 2014 |
| CMRTs received from priority suppliers |
| CFSI smelter reference list, as included in the CMRT version 2.03 (Dec 2013) |
6 Abbreviations
Abbreviation |
Term | |
3TG | Tin, tantalum, tungsten, and gold | |
CFSI | Conflict Free Sourcing Initiative | |
CFSP | Conflict Free Smelter Program | |
CMRT | CFSI Conflict Minerals Reporting Template | |
EICC | Electronics Industry Citizenship Coalition | |
Form SD | Specialized Disclosure Form | |
GeSI | Global e-Sustainability Initiative | |
OECD | Organization for Economic Cooperation and Development | |
RCOI | Reasonable Country of Origin Inquiry | |
SEC | Securities and Exchange Committee | |
SSD | Supplier Sustainability Declaration |
Page 18 of 20
Exhibit A
Independent Accountants Report
To the Supervisory Board and Shareholders of Koninklijke Philips N.V.:
We have examined:
| whether the design of Koninklijke Philips N.V. (the Company) due diligence framework as set forth in section 2.1 of the Conflict Minerals Report for the reporting period from January 1 to December 31, 2013, is in conformity, in all material respects, with the criteria set forth in the Organisation of Economic Co-Operation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, Second Edition 2013 (OECD Due Diligence Guidance), and |
| whether the Companys description of the due diligence measures it performed, as set forth in column Due Diligence Measures Performed in section 2.2 of the Conflict Minerals Report for the reporting period from January 1 to December 31, 2013, is consistent, in all material respects, with the due diligence process that the Company undertook. |
Management is responsible for the design of the Companys due diligence framework and the description of the Companys due diligence measures set forth in the Conflict Minerals Report, and performance of the due diligence measures. Our responsibility is to express an opinion on the design of the Companys due diligence framework and on the description of the due diligence measures the Company performed, based on our examination.
Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and the standards applicable to attestation engagements contained in Government Auditing Standards, issued by the Comptroller General of the United States, and, accordingly, included examining, on a test basis, evidence about the design of the Companys due diligence framework and the description of the due diligence measures the Company performed, and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion.
Our examination was not conducted for the purpose of evaluating:
| The consistency of the due diligence measures that the Company performed with either the design of the Companys due diligence framework or the OECD Due Diligence Guidance; |
| The completeness of the Companys description of the due diligence measures performed; |
| The suitability of the design or operating effectiveness of the Companys due diligence process; |
Page 19 of 20
| Whether a third party can determine from the Conflict Minerals Report if the due diligence measures the Company performed are consistent with the OECD Due Diligence Guidance; |
| The Companys reasonable country of origin inquiry (RCOI), including the suitability of the design of the RCOI, its operating effectiveness, or the results thereof; or |
| The Companys conclusions about the source or chain of custody of its conflict minerals, those products subject to due diligence, or the DRC Conflict Free status of its products. |
Accordingly, we do not express an opinion or any other form of assurance on the aforementioned matters or any other matters included in any section of the Conflict Minerals Report other than section(s) 2.1 and column Due Diligence Measures Performed in section 2.2.
In our opinion,
| the design of the Companys due diligence framework for the reporting period from January 1 to December 31, 2013, as set forth in section 2.1 of the Conflict Minerals Report is in conformity, in all material respects, with the OECD Due Diligence Guidance, and |
| the Companys description of the due diligence measures it performed as set forth in column Due Diligence Measures Performed in section 2.2 of the Conflict Minerals Report for the reporting period from January 1 to December 31, 2013, is consistent, in all material respects, with the due diligence process that the Company undertook. |
/s/ KPMG Accountants N.V.
Amsterdam, The Netherlands
June 2, 2014
Page 20 of 20
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