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On Aug. 22, 2012, the final rule regarding sourcing of conflict minerals under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) was approved by the U.S. Securities and Exchange Commission (SEC). The rule requires companies, like Garmin, that are listed on U.S. stock exchanges to make reasonable inquiries, and depending on the circumstances, undertake further due diligence to try to determine the source and chain of custody of “conflict minerals” that may be used in their products, and to publicly report on an annual basis whether any such “conflict minerals” originate and finance armed groups in the Democratic Republic of the Congo (DRC) or adjoining countries. The “conflict minerals” are tin, tantalum, tungsten and gold. Although we do not directly purchase any minerals from its suppliers, Garmin purchases component parts from its suppliers that contain metals, which could be derived from mines in the DRC or adjoining countries.
What is Garmin Doing?
We support an industry-wide approach to addressing social responsibility issues throughout the supply chain. As part of this approach, we became a member of the Electronic Industry Citizenship Coalition (EICC) in 2013. The benefit of this approach is that the collaborative group can analyze and address these issues more strategically and holistically than can any individual company acting alone.
For each of the conflict minerals, the EICC took an active role in assembling stakeholders throughout their respective supply chains to discuss the challenges with tracing the chain of custody of minerals. In collaboration with Global e-Sustainability Initiative (GeSI), the EICC has invested substantial efforts to develop a Conflict-Free Smelter (CFS) program to help ensure that smelters and refiners can identify the origin of minerals that go into electronics products. In addition, the EICC and GeSI developed the EICC/GeSI Conflict Minerals Reporting Template to standardize the collection of information from suppliers throughout the industry’s supply chains.
Garmin is sending this standardized template to our suppliers and asking them to provide information regarding the smelters/refineries in their supply chains. In addition, we are incorporating in our standard supplier contracts and our Supplier Guidelines provisions that require our suppliers to adopt a policy on the responsible sourcing of minerals; implement due diligence processes to support that policy; and complete and return to Garmin the EICC/GeSI Conflict Minerals Reporting Template.
Our Expectation of Suppliers
Specifically, Garmin expects each of our suppliers to do all of the following:
- Adopt a policy of responsible sourcing of minerals and pass this requirement through its supply chain;
- Implement due diligence processes to support that policy;
- Source materials from socially responsible suppliers; and
- Complete and return to us the EICC/GeSI Conflict Minerals Reporting Template in a timely manner and provide us all other information we may request regarding the sourcing of minerals in products supplied to Garmin.
If Garmin becomes aware of a supplier who is not in compliance with these expectations, then we will take the appropriate actions to remedy the situation, including reassessment of supplier relationships.