1) | Establish strong company management systems |
• | Established a cross-functional team comprised of employees in key business functions to design and implement our conflict minerals compliance efforts with executive-level support and oversight |
• | Provided background information and training on the Rule to employees involved in our conflict minerals compliance efforts |
• | Provided online training and support to suppliers involved in our conflict minerals compliance efforts |
• | Continued to maintain the conflict minerals position statement, which includes information on how to contact Avon for further information and/or report concerns. The Avon Conflict Minerals Position Statement is available on our website at http://www.avoncompany.com/corporate-responsibility/about-cr/positions-policies/conflict-minerals/ |
• | Avon’s Integrity Helpline (integrityhelpline.avon.com) is available 24 hours a day, seven days a week and also provides a way to ask a question or make a report |
• | Enhanced supply chain transparency and strengthened engagement with suppliers by asking targeted suppliers to complete the Conflict Mineral Reporting Template developed by the Conflict Free Sourcing Initiative ("CFSI") and providing suppliers with background information on the Rule |
• | Improving our supplier and products records to better assess the potential use of conflict minerals by the Company, including implementing a manual pre-screening program for new supplier relationships |
• | Required that relevant conflict minerals documentation is retained for at least 5 years pursuant to Avon’s document retention policy |
2) | Identify and assess risks in the supply chain |
• | Developed a better understanding of our suppliers’ processes and where there were potential gaps in information or understanding |
• | Reviewed Survey responses for “red flags,” i.e., inconsistent and/or incomplete responses that indicated a potential risk |
• | Compared smelters and refiners identified by participating suppliers to the list of smelters that have been validated as meeting the conflict free requirements of the Conflict Free Smelter Program of the CFSI |
• | Identified areas of improvement for our information technology that could enhance, on an ongoing basis, the quality of direct supplier information to better assess the potential use of conflict minerals |
3) | Design and implement a strategy to respond to identified risks |
• | Providing regular updates to senior management in the Finance, Supply Chain, and Legal functions through Steering Committee meetings, as deemed necessary by the working group during the due diligence period |
• | Sending corrective action follow-up notices to suppliers who provided incomplete and/or inconsistent Survey responses |
• | The corrective action notices request follow-up information from suppliers, as needed, and direct suppliers to Avon’s training materials regarding key regulatory requirements and to industry resources that may be useful to the suppliers |
• | Sending a corrective action notice to suppliers who did not complete a Survey in a timely manner, requesting that they begin gathering information regarding the potential use of conflict minerals in materials supplied to Avon during 2015 and also informing them that Avon will provide additional training for the 2015 compliance period. Avon informed these suppliers that if they did not complete the survey and comply with our 2014 compliance efforts, Avon would evaluate its options, including but not limited to reassessment of the relationship between the supplier and Avon |
4) | Carry out independent third-party audit of supply chain due diligence at identified points in the supply chain |
5) | Report on supply chain due diligence |
6) | Outcomes of RCOI |
• | Continuing engagement with targeted suppliers in 2015, including current suppliers who were non-responsive to our 2014 RCOI or who were responsive, but did not provide sufficient information |
• | As described above, Avon informed non-responsive suppliers that if they did not complete the survey and comply with our 2015 compliance efforts, Avon would evaluate its options, including but not limited to reassessment of the relationship between the supplier and Avon |
• | Enhancing our information technology capabilities to improve our supplier and products records to better assess the potential use of conflict minerals by the Company, including identifying process improvements through automation of our pre-screening program for new supplier relationships |
• | Continue to identify and drive improvements to our information technology systems that could enhance, on an ongoing basis, the quality of direct supplier information to better assess the potential use of conflict minerals and allow us to more efficiently perform applicability assessments for existing targeted suppliers in future years |
• | Launching the 2015 RCOI in the fourth quarter of 2015 and providing advance notice to suppliers |
• | Finalizing and incorporating supplier contract language and/or terms and conditions that will require suppliers to cooperate with Avon’s conflict minerals compliance efforts |
• | Maintaining the cross-functional team comprised of employees in key business functions to design and implement our conflict minerals compliance efforts with executive-level support and oversight |