DocumentExhibit 1.01
AptarGroup, Inc.
Conflict Minerals Report
For the Year Ended December 31, 2021
This report for the year ended December 31, 2021 is presented to comply with Rule 13p-1 under the Securities Exchange Act of 1934 (the “Rule”). The Rule was adopted by the Securities and Exchange Commission (“SEC”) to implement reporting and disclosure requirements related to conflict minerals as directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”). The Rule imposes certain reporting obligations on SEC registrants whose manufactured products contain conflict minerals which are necessary to the functionality or production of their products. Conflict minerals are defined as cassiterite, columbite-tantalite (coltan), gold, wolframite, or their derivatives, which are limited to tin, tantalum and tungsten for the purposes of this assessment.
Company Overview
This report has been prepared by the management of AptarGroup Inc. (“AptarGroup”, "Company" “we”, “us” or “our”). The information includes the activities of all majority-owned subsidiaries that are required to be consolidated. AptarGroup is a leading global provider of a broad range of innovative drug delivery, consumer product dispensing and active material science solutions and services for a variety of end markets including pharmaceutical, beauty, personal care, home care, food and beverage markets.
Product Description
Our primary products are dispensing pumps, closures, aerosol valves, elastomeric primary packaging components, active material science solutions and digital health solutions.
•Dispensing pumps are finger-actuated dispensing systems that dispense a spray or lotion from non-pressurized containers. The style of pump used depends largely on the nature of the product being dispensed, from small, fine mist pumps used with pharmaceutical products and perfume to lotion pumps for more viscous formulas.
•Closures are primarily dispensing closures but to a lesser degree can include non-dispensing closures. Dispensing closures are plastic caps that allow a product to be dispensed without removing the cap.
•Aerosol valves dispense product from pressurized containers. The majority of the aerosol valves that we sell are metered dose valves, with the balance being bag-on valve and continuous spray valves.
•Elastomeric primary packaging components are used in the injectables market. Products include stoppers for infusion, antibiotic, lyophilization and diagnostic vials. Our elastomeric components also include pre-filled syringe components, such as plungers, needle shields, tip caps and cartridges.
•Active material science solutions are provided using our platform technology to maintain container closure integrity, extend shelf-life, control moisture and protect drug products from overall environmental exposures and degradations.
•The digital health solutions aim to improve patients' treatment experience and outcomes. We leverage connected devices, diagnostic and digital therapeutics tools that support patients to manage their disease as well as enabling care teams to remotely monitor the health of the patients when needed. Available as standalone or as a fully integrated offering in our existing range of drug delivery solutions, we have digital health solutions covering a wide range of therapeutic areas including, but not limited to, pulmonary, oncology, diabetes, immunology, and neurology.
In some cases, a tin-plated mounting cup is necessary for the functionality of our aerosol valves. However, to confirm our internal assessments that conflict minerals were not present in any other of our products, we expanded the scope of our assessment to all Company suppliers.
Supply Chain Overview
AptarGroup relies upon our suppliers to provide information on the origin of the conflict minerals contained in components and materials supplied to us, including sources of conflict minerals that are supplied to them from their suppliers. We have integrated responsible sourcing into our Conflict Minerals Statement, which is published on our website at investors.aptar.com (see "Governance" on the ESG page). Information on AptarGroup’s website shall not be deemed to be a part of, or incorporated into, this report. We have also individually communicated to our suppliers our expectations of them regarding conflict minerals. In particular, our suppliers are expected to provide the conflict minerals sourcing information as required by the Dodd-Frank Act and consistent with our Conflict Minerals Statement.
In addition to providing our suppliers with our Conflict Minerals Statement, we performed a comprehensive analysis of our product components and the role our suppliers play throughout our manufacturing and product delivery processes. We communicated the requirements of the Dodd-Frank Act to our suppliers and provided a specific Company resource for the suppliers to contact with questions. We also adopted the standard conflict minerals reporting templates established by the Responsible Minerals Initiative (“RMI”) and launched our conflict minerals due diligence communication survey to our supplier base.
Reasonable Country of Origin Inquiry ("RCOI")
We conducted an internal analysis of our products and determined that certain aerosol valves require a tin-plated mounting cup, and, therefore, these products are subject to the reporting requirements under the Rule.
Due to the breadth and complexity of AptarGroup products and supply chains, it takes time for certain of our suppliers to verify the origin of all their materials. By using our supply chain due diligence processes to drive accountability with our suppliers and leveraging the industry standard RMI, we were able to develop transparency into our supply chain.
Due Diligence Program
AptarGroup’s due diligence is consistent with The Organization for Economic Co-Operation and Development (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (“OECD Guidance”) and the related supplements for gold and for tin, tantalum and tungsten. AptarGroup designed our due diligence process, management and measures to conform to the OECD Guidance framework.
Our conflict minerals due diligence process consisted of the following:
A. Strong Company Management Systems
1.As noted above, AptarGroup has adopted a Conflict Minerals Statement, which is posted on our website at investors.aptar.com (see "Governance" on the ESG page).
2.AptarGroup has established a management system for complying with the applicable rules. Our management system includes the development of a task force of subject matter experts from relevant functions such as purchasing, finance, legal and manufacturing. Our subject matter experts are responsible for communicating and implementing our conflict minerals compliance strategy. Senior management is briefed on the progress and results of our due diligence efforts on a regular basis.
3.We developed a standard communication strategy with our purchasing group to contact our suppliers, communicate our requirements and archive the supplier responses to our RCOI. The results of this engagement have allowed us to render the statements made and the conclusions reached in this report.
4.We conducted individual meetings with all known suppliers of products containing conflict minerals to review their progress and results of their conflict minerals procedures. For all other suppliers, we had an escalation process to identify and contact any non-responsive suppliers or suppliers with problematic responses to our RCOI.
5.AptarGroup has established a due diligence compliance process for the maintenance and retention of our supplier database and relevant supporting documentation.
B. Identify and Assess Risk in the Supply Chain
Based on our size, breadth and complexity of our products, and the constant evolution of our supply chain, it is difficult to identify all the downstream actors from our direct suppliers. We have identified all of our direct suppliers of our product materials. Of these, we have excluded certain suppliers considered outside the scope of the Rule (for example, suppliers of decorating or packaging materials). We performed RCOI procedures on the remaining direct suppliers. We received responses to our request for information from a majority of the suppliers surveyed. We further identified six direct suppliers of tin-plated mounting cups and performed additional procedures, including the receipt of additional representations from each supplier, to gain additional comfort on our supply chain. We have relied on these supplier’s responses to provide us with information about the source of conflict minerals contained in the components supplied to us. Our direct suppliers are similarly reliant upon information provided by their suppliers.
C. Manage Risks
As we continue to develop our due diligence program, we intend to take the following steps to continue to mitigate any possible risk that the necessary conflict minerals in our products could benefit armed groups in the covered countries:
1.AptarGroup will continue to enhance our supplier communications, training and escalation process to improve due diligence data accuracy and completion.
2.AptarGroup will work with any suppliers who are determined to be sourcing from non-conflict free smelters to move towards using conflict free smelters within a reasonable timeframe. The timeframe is dependent on the criticality of the specific part and the availability of alternative suppliers.
3.If any supplier is unwilling or unable to definitively determine their conflict minerals status, AptarGroup reserves the right to source materials from alternative suppliers and remove the supplier from our purchasing channels. In vendor contracts, we include language requiring our suppliers to provide the necessary information to confirm our conflict minerals status.
D. Carry out Independent Third Party Audit of Supply Chain Due Diligence at Identified Points
AptarGroup does not have a direct relationship with conflict minerals smelters or refiners, nor do we perform direct audits of these entities that provide our supply chain. However, we support and rely on industry groups, such as the Responsible Business Alliance (formerly the Electronic Industry Citizenship Coalition ®) and RMI, to influence smelters and refineries to become certified through their programs.
E. Report on Supply Chain Due Diligence and Results
1.Due Diligence Process: We conducted a survey of our active suppliers described above using the template developed by the RMI, known as the RMI Conflict Minerals Reporting Template (the “Template”). The Template was developed to facilitate disclosure and communication of information regarding smelters that provide material to a company’s supply chain. It includes questions regarding a company’s conflict-free policy, engagement with its direct suppliers, and a listing of smelters the company and its suppliers use. In addition, the Template contains questions about the origin of conflict minerals included in their products, as well as supplier due diligence. Written instructions and recorded training illustrating the use of the tool is available on RMI’s website. The Template is being widely adopted by many companies in their due diligence processes related to conflict minerals.
2.Survey Responses: For our 2021 RCOI inquiries, AptarGroup elected to survey our entire population of direct material suppliers, less decorating and packaging suppliers, which are specifically excluded from the Rule. We received responses from a majority of our direct material suppliers.
3.Efforts to Determine Country of Origin: Tracing materials back to their origin is a complex aspect of responsible sourcing in our supply chain. We adopted the methodology outlined by the RMI’s joint industry programs and outreach initiatives and required our suppliers to conform with the same standards that meet the OECD guidelines. Additionally, we required our suppliers to report their results to us using the Template. Through this effort, we have made a reasonable determination of the mines or locations of origin of the conflict minerals in our supply chain consistent with industry-wide practices.
4.Smelters or Refiners Identified: We adopted the RMI’s industry approach and traced back the origin of conflict minerals by identifying smelters, refineries or recyclers and scrap suppliers sources. AptarGroup leveraged the RMI and its Responsible Minerals Assurance Process (“RMAP”) to trace the mine of origin of the conflict minerals to its ore level. The RMAP audit employs a risk-based approach to validate smelters’ company level management processes for responsible mineral
procurement. To date, we are aware of thirty-four smelters and refineries specifically used by certain of our suppliers within our supply chain. Set forth below is the list of smelters identified as well as their RMAP status:
| | | | | | | | | | | |
| Metal | Smelter | Country | RMAP Status |
| Tin | Alpha Metals | United States | Conformant |
| Tin | China Tin Group Co., Ltd. | China | Conformant |
| Tin | EM Vinto | Bolivia | Conformant |
| Tin | Fabrica Auricchio Industria e Comercio Ltda. | Brazil | Conformant |
| Tin | Fenix Metals | Poland | Conformant |
| Tin | HuiChang Hill Tin Industry Co., Ltd. | China | Conformant |
| Tin | Guangdong Hanhe Non-Ferrous Metal Co., Ltd. | China | Conformant |
| Tin | Luna Smelter, Ltd. | Rwanda | Conformant |
| Tin | Malaysia Smelting Corporation (MSC) | Malaysia | Conformant |
| Tin | Metallo Belgium N.V. | Belgium | Conformant |
| Tin | Mineração Taboca S.A. | Brazil | Conformant |
| Tin | Minsur | Peru | Conformant |
| Tin | Mitsubishi Materials Corporation | Japan | Conformant |
| Tin | OMSA | Bolivia | Conformant |
| Tin | PT Aries Kencana Sejathera | Indonesia | Conformant |
| Tin | PT Artha Cipta Langgeng | Indonesia | Conformant |
| Tin | PT Babel Surya Alam Lestari | Indonesia | Conformant |
| Tin | PT Bangka Prima Tin | Indonesia | Conformant |
| Tin | PT Bangka Serumpun | Indonesia | Conformant |
| Tin | PT Menara Cipta Mulia | Indonesia | Conformant |
| Tin | PT Mitra Stania Prima | Indonesia | Conformant |
| Tin | PT Prima Timah Utama | Indonesia | Conformant |
| Tin | PT Rajawali Rimba Perkasa | Indonesia | Conformant |
| Tin | PT Refined Bangka Tin | Indonesia | Conformant |
| Tin | PT Tambang Timah | Indonesia | Conformant |
| Tin | PT Timah Tbk Kundur | Indonesia | Conformant |
| Tin | PT Timah Tbk Mentok | Indonesia | Conformant |
| Tin | Soft Metals Ltda. | Brazil | Conformant |
| Tin | Thai Nguyen Mining and Metallurgy Co., Ltd. | Vietnam | Conformant |
| Tin | Thaisarco | Thailand | Conformant |
| Tin | Tin Technology & Refining | United States | Conformant |
| Tin | White Solder Metalurgia e Mineracão Ltda. | Brazil | Conformant |
| Tin | Yunnan Chengfeng Non-ferrous Metals Co., Ltd. | China | Conformant |
| Tin | Yunnan Tin Company Limited | China | Conformant |
Forward-Looking Statements
This report contains forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are based on our beliefs as well as assumptions made by and information currently available to us. Words such as “intends,” “continues,” “expects,” “anticipates,” “believes,” “estimates,” “future,” “potential” and other similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could” are intended to identify such forward-looking statements. Our actual results or other events may differ materially from those expressed or implied in such forward-looking statements due to known or unknown risks and uncertainties that exist in our operations and business environment. For additional information on these and other risks and uncertainties, please see our filings with the SEC, including the discussion under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K and Form 10-Qs. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
