UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SD
Specialized Disclosure Report
BT Group plc
(Exact name of registrant as specified in its charter)
| England and Wales (State or other jurisdiction of |
1-08819 Commission File Number) |
Not applicable (IRS Employer Identification No.) |
BT Centre, 81 Newgate Street,
London EC1A 7AJ England
(Address of principal executive offices)
(Zip Code)
Linda Bruce-Watt, Corporate Counsel +44 779 030 1427
(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, 2015.
BT Group plc Form SD for the reporting period January 1 to December 31, 2015
Please refer to Rule 13p-1 under the Securities Exchange Act of 1934, as amended, and Form SD for definitions to the terms used in this Form SD, unless otherwise defined herein. References to “we”, “us” and “our” are to BT Group plc.
Section 1 – Conflict Minerals Disclosure
Item 1.01 Conflict Minerals Disclosure and Report
We have determined that we either manufacture or contract to manufacture certain products for whose functionality or production minerals deemed to be “conflict minerals” under Rule 13p-1 and Form SD are necessary. Consequently, we conducted in good faith a reasonable country of origin inquiry regarding those conflict minerals that is reasonably designed to determine whether any of the conflict minerals originated in the Democratic Republic of the Congo or an adjoining country or are from recycled or scrap sources.
On the basis of this reasonable country of origin inquiry, while we have no reason to believe that the necessary conflict minerals (i) may have originated in the Democratic Republic of the Congo or an adjoining country or (ii) may not be from recycled or scrap sources, we were not able to determine definitively that the conflict minerals either (x) did or did not originate in the Democratic Republic of the Congo or an adjoining country or (y) did in fact come from recycled or scrap sources. Consequently, we are filing a Conflict Minerals Report, attached hereto as exhibit 1.01, and this Report is also available on our website at
http://www.btplc.com/Purposefulbusiness/Ourapproach/Ourpolicies/Conflict-Minerals-Disclosure-2015.pdf
Item 1.02 Exhibits
See Section 2 below for the Conflict Minerals Report as required by Item 1.01.
Section 2 – Exhibits
Item 2.01 Exhibits
The following exhibit is filed as part of this Form SD:
Exhibit 1.01 – Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form SD.
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.
| BT Group plc | ||
| /s/ Tony Chanmugam | ||
| Name: | Tony Chanmugam | |
| Title: | Group Finance Director | |
Date: May 31, 2016
Exhibit 1.01
Conflict Minerals Report of BT Group plc in accord with Rule 13p-1 under the Securities Exchange Act of 1934
Due Diligence
Below we describe the measures we have taken to exercise due diligence on the source and chain of custody of the conflict minerals necessary to the function or production of the products we manufacture or contract to manufacture, as the case may be.
We have issued to relevant suppliers a country of origin questionnaire, which is based upon that created by the globally recognised Conflict Free Sourcing Initiative (an initiative of the EICC and GeSI); we are a member of GeSI. This questionnaire forms the primary element of our due diligence process and was issued to all of our first level suppliers of ‘in-scope’ products (as described below under “Products”). Our global Conflict Minerals Policy is available to our suppliers and to all stakeholders via our website. We have additional internal guidance and training material to assist BT buyers in the sourcing and due diligence process.
We contacted 85 in-scope suppliers (those suppliers whose supply chains may potentially involve conflict minerals) and had an 82% supplier response rate to our country of origin questionnaire. Our procurement and compliance teams analyse the responses. We found that 7% were able to say their product was conflict free, 20% did not use metals in the product, and 31% had received responses from over 75% of their suppliers. Where supplier responses identified use of conflict free smelters, we introduced an additional step using data analytics to check the names of smelters against the CFSI (Conflict Free Smelters Initiative) list.
As a result we now know more about some of our suppliers’ supply chains and the smelters conflict free status. Whilst suppliers generally demonstrated a commitment to our request through completion of the questionnaire, some responses varied in their level of detail. Some smaller suppliers noted the significant resource requirements of completing the questionnaire, and accordingly their responses tended to be less detailed.
We are several levels removed from the smelters, so we continue to work closely with our suppliers supporting them in their own due diligence efforts. Our licensed buyers, who are responsible for managing the relationships with the first level suppliers involved in the ‘in-scope’ products, are invited to attend a knowledge call and have access to additional written guidance. This training has ensured that our buyers are equipped with the right knowledge to engage collaboratively with our suppliers on this requirement, supporting them where there are questions. Our central Procurement lead and Group Compliance lead are available to answer any more detailed questions which suppliers may raise.
We have begun introducing a specific conflict minerals clause in contracts with suppliers who manufacture BT branded products that help us comply with our obligations under the Dodd-Frank Act.
Page 1
Democratic Republic of the Congo Conflict Status
On the basis of our due diligence measures described above, we were not able to determine definitively that the necessary conflict minerals either (x) did or did not originate in the Democratic Republic of the Congo (DRC) or an adjoining country or (y) did in fact come from recycled or scrap sources. Accordingly, we have concluded that, for calendar year 2015, the products manufactured by us or contracted by us to be manufactured are DRC conflict undeterminable.
Products
Under the Rules, we are required to make a determination where the conflict minerals may be found in products which we manufacture or ‘contract to manufacture’. Against this requirement, we reviewed last year’s in scope products and considered any new additions to the BT product portfolio. The below list is not an exhaustive list of these products. It details our primary categories, with some of the relevant products within those categories. As explained below the list includes some products which are not ‘contracted to manufacture’ products, in order to give a view of the scope of our programme:
Products manufactured by BT or its subsidiaries:
| • | BT Cable products – BT Cables Limited, a wholly owned subsidiary of BT Group manufactures copper cables to a global customer base. The cables are primarily for communications and railway use. Of the four conflict minerals, tin is of the most interest, as it is used in the production of tinned solid copper. Certain products are galvanised with a zinc-tin alloy coating. |
BT branded products (contracted to manufacture):
| • | BT Consumer, Customer Premises Equipment products, where all four metals are flagged as included in these products: |
| • | Set top boxes that enable customers to access TV channels through their broadband, BT-branded Hubs (internet and wi-fi routers), BT-branded Baby Monitors and BT-branded Phones. |
| • | Plusnet branded products - Plusnet is a wholly owned subsidiary of BT Group, selling primarily a range of telephony and broadband products. Out of the range of Plusnet branded products only a Plusnet branded modem is in our scope for ‘contracted to manufacture’ products this year. |
| • | Openreach branded modem - Openreach is a BT Group business. The suppliers involved with the modem flagged all four metals as included in this product. |
| • | BT Unified Trading – BT’s Netrix series of trading desks - BT Unified Trading provides communications to and within the financial services markets, over multiple channels. In the responses of the suppliers we have contacted, the most common metals flagged were tin and gold, but some suppliers gave a response which flagged all four metals are in use. |
This year we took a policy decision to include BT branded products as in-scope of our conflict minerals programme. This is for ‘badged’ products where the BT brand is the sole brand, and for which we do not influence the design or contract to manufacture. We decided to include them based on our customers’ brand expectations. We asked five additional suppliers of products, such as a conference phone, to fill in the CFSI questionnaire and received mixed responses. As these products are not covered by the Rules, two suppliers declined to fill in the questionnaire but pointed us to their conflict minerals policy.
Page 2
We continue to assess our ‘in-scope’ list, in support of the principles of the conflict minerals legislation. As described under “Due Diligence” above, in our due diligence procedures we have sought to determine the source of the conflict minerals to the extent reasonably practicable, particularly given the attenuated nature of our location in the supply chain relative to the initial sourcing of the conflict minerals.
Mitigating Steps
To mitigate the risk of 3TG (tin, tantalum, tungsten and gold) metals from conflict affected areas being present in our products and supply chain, and in order to improve our due diligence processes, we intend to take the following steps in calendar year 2016. We will:
| • | continue to work closely with our suppliers, supporting them in their own efforts to determine the origin of the necessary conflict minerals; |
| • | continue our training and guidance for our licensed buyers who deal with suppliers of ‘in-scope products’; |
| • | continue to benchmark our processes and to keep abreast of developments and enhancements, as well as supporting the wider dialogue regarding the sourcing of conflict minerals, through our involvement in a number of industry forums (including the Conflict Free Sourcing Initiative); and |
| • | review our list of products following BT’s acquisition of EE in January 2016. |
No independent private sector audit of this Conflict Minerals Report was required or performed for the calendar year ended December 31, 2015.
Page 3