B B Baney April 2015 Agenda AIAG Chemical Management amp Reporting Overview OHCL Subgroups 2014 activities 2015 plans AIAG Conflict Minerals Overview Subgroups Conflict Minerals CrossIndustry Benchmark ID: 560307
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Slide1
AIAG Update
B
.B. Baney
April 2015 Slide2
Agenda
AIAG Chemical Management & Reporting Overview (OHCL)
Subgroups
2014 activities
2015 plans
AIAG Conflict Minerals Overview
Subgroups
Conflict Minerals Cross-Industry Benchmark
Report
Due Diligence Framework
Smelter or Refiner (SOR) Engagement Process
Smelter Engagement Teams
2014 Company Survey on Reporting Challenges
2015 plansSlide3
AIAG Board Companies
Caterpillar
Dana
Delphi
DensoEatonFederal MogulFiat Chrysler FordFreudenberg-NOKGeneral Motors
HondaIBMInforJCIMagnaNissanRobert Bosch LLCSpecialty ProductsToyotaTRW Automotive
3Slide4
OHCL Subgroups &
2014 Activities
Recommendation and DocumentationMain interface with IMDS Steering Committee on:IMDS RecommendationsNew IMDS business design input & testingNew co-chairs Chris Harden, RJS Scott Morris, HondaSupports REACH TF effortsSupports AIAG Conflict Minerals Workgroup4Slide5
OHCL 2014 Accomplishments
Interface with IMDS Steering Committee to maintain, improve reporting processes, tools and related customer feedback, while helping NA users
Rec & Doc subgroup evaluated, tested, and provided valuable support for IMDS 9.0 release
The Globally Harmonized System (GHS) project team progressed wellHeld successful 2014 IMDS & Product Chemical Compliance Conference5Slide6
OHCL Future Tasks & Focus
Support model office testing and feedback for IMDS 10.0 business design
Support Supplier Alliance activities
Understand and enhance awareness/communication of NA new regulations, timing, & impactEnhance communications between members and other industrial organizations, e.g. CLEPA, REACH TF, JAMA, KAMA, JAPIA, ACEA6Slide7
Conflict Minerals Subgroups –
Actions
and
Stakeholder
InvolvementSlide8
Conflict Minerals Subgroups –
Actions
and
Stakeholder
InvolvementSlide9
Benchmark of Company SEC filings
This has been a cross industry effort
Benchmarking reports submitted between May 23, 2014 and June 2, 2014
Currently 307 submissions have been reviewedThe work continues on…Raw data will be made available to IPC, Automotive Industry Action Group (AIAG), Association of Equipment Manufacturers (AEM), Aerospace Intl Assoc (AIA), CFSI, and the Cross Industry Group*Very Important – the data is only meant for benchmarking and education9Slide10
Industries
4%
Aerospace
2%Apparel7%Automotive8%
Chemical2%Component Manufacturer7%Consumer Products39%Electronics3%Food & Beverage4%Large Equipment3%Material Manufacturer4%Medical Devices8%Retail10%VariousSlide11
CFSI CMRT (formerly EICC/GeSI Template)
Of the 19% that did not use the CMRT,
7%
used a company internal survey and 93% did not state a resourceSoftwareOf the 307, 14% identified a software solution, 86% did not identify softwareSlide12
Country of Origin Data
0.33%
of companies provided names of the mines
5.54% of companies listed the country of originSlide13
Establish Strong Company Management Systems
Identify And Assess Risk In The Supply Chain
Design And Implement A Strategy To Respond To Identified Risks
Carry Out Independent Third-party Audit Of Smelter or Refiner (SOR) Due Diligence
Report Out On Supply Chain Due Diligence
Due Diligence Framework Prescribes Role of Filing CompaniesOrganization for Economic Cooperation and Development (OECD)Due Diligence Guidance for Responsible Supply Chains of Minerals From Conflict-Affected High-Risk Areas1
2
3
4
5
SEC Final Rule for Conflict Minerals 3TG (Tin, Tungsten, Tantalum, Gold)Slide14
Steps to Identify Potential Audit Candidates
CFSI Members
Gain access to CFSI Smelter Data
Participate in various work groups
Pay Membership Fee
Smelter Disposition Team Experts make final determination of true smeltersPre-Audit Visit TeamExplain CFSI program, audit expectations and benefitse.g. Apple, Intel: > 35 international visits/year3
rd Party Auditor
Conduct site audit, create audit report for review by CFSI Audit Review Committee (ARC)
CFSI - 30
CompaniesAIAG - 10 Companies
~ 10
Companies
3rd Party Audit
200+ Companies
CFSI Staff
& 5 Companies
Smelter Engagement Team (SET)
Confirm Probable Smelters - verify smelter product
Outreach
–encourage audit participationSlide15
AIAG SET Activities
Letters, calls, visits
Purpose
: Confirm probable smelters in order to include in standard smelter list
Probable Smelter ConfirmationOutreachResearchTwo Main Areas of Focus for AIAG SET team:CFSI Activity:Purpose: Disposition alleged smelters as probable or not a smelter
On-line research, calls, emailsPurpose: Encourage known smelters to participate in Conflict Free Audit & become Conflict Free certifiedLetters, callsSlide16
Impact of CFSI & AIAG SET efforts
Active and Compliant Smelters / Total Legitimate Smelters*
Metal
September ‘14December ‘14January ‘15February ‘15
March ‘15Tantalum95% (35/38)96% (44/46)96% (44/46)98% (45/46)98% (45/46)Tin58% (44/75)57% (50/87)62% (54/87)64% (56/88)64% (57/89)Tungsten37% (12/33)40% (17/42)48% (20/42)49% (21/43)
54% (23/43)Gold50% (55/111)57% (68/119)57% (68/119)56% (67/119)60% (72/119)TOTAL57% (147/257)61% (178/294)63% (186/294)64% (189/296)66% (197/297)
50 additional compliant smelters in 5 months
*As published by CFSISlide17
AIAG Smelter Engagement Team
&
c
ollaborate towards a common set of goalsSlide18
2014 Company Survey on Reporting Challenges
Sub-Tier Supplier Survey conducted in July-August, 2014 to better understand challenges of conflict minerals reporting and to inform CMWG’s 2015-2016 strategy
29-question
survey developed by the CMBP subgroupRequest distributed to AIAG, OESA, & request to distribute downReceived responses from 466 suppliersSurvey data was analyzed in a partnership with Grand Valley State University Statistical Consulting Center.Slide19
2014 Company Survey on Reporting Challenges
Example Hypothesis:
Greater
management support decreases challenge in collecting conflict minerals data from suppliersConclusion: Complete management support was associated with significantly fewer challenges in data collection Interesting note: No management feedback fared better than poor management support (though neither did well)More results available after AIAG CR Summit 4/29/15
Questions include:Slide20
Demonstrate
continued improvement year over year
Improve smelter information accuracy and completeness
Consider obtaining assurances around your supply chain process
2015 data gathering will be similar to 2014CMRT 4.0 from CFSI will look very similar to 3.02aTiming of requests/responses will be similar to 2014Looking Forward 2015Slide21
Future Questions
Workgroups latest public information & resources are available at
www.aiag.org/conflictminerals
Questions may be directed to Tanya Bolden at conflictminerals@aiag.org