On August 22, 2012, the final rule regarding sourcing of conflict minerals under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Dodd-Frank Act”) was approved by the U.S. Securities and Exchange Commission (“SEC”). The rule imposes reporting requirements on publicly-traded companies relating to the presence of conflict minerals in the products that they manufacture. For more information on this regulation, visit http://www.sec.gov/news/press/2012/2012-163.htm.
Section 1502 of the Dodd-Frank Act designates cassiterite, columbite-tantalite (coltan), wolframite, or their derivatives, which are limited to tin, tantalum and tungsten, respectively, and gold as “conflict minerals.” These minerals are used in many manufactured goods across many industries, including the aerospace, appliances, automotive, electronics, jewelry, medical and tool and die industries. Ingersoll Rand is committed to taking all reasonable steps to comply with the legislation and has begun the lengthy process of determining where conflict minerals exist within our direct material supply chain.
Overview of the Conflict Minerals Issue
The SEC’s conflict mineral rule focuses on the Democratic Republic of the Congo (“DRC”), a central African country with vast mineral wealth, including reserves of conflict minerals. For many years, armed groups have fought to control mines within the DRC and smuggle minerals out of the country, the proceeds of which are used to finance conflict and perpetuate criminal behavior. These armed groups have been cited for committing multiple human rights violations and contributing to the humanitarian crisis in the region. The new reporting requirements reflect Congressional concerns that the exploitation and trade of conflict minerals by armed groups is helping to finance conflict in the DRC region.
Publicly traded companies are now required by the SEC to disclose annually whether conflict minerals necessary to the functionality or production of products they manufacture or contract to manufacture are “DRC conflict free.” According to the SEC’s final rule, this means that any conflict minerals used in manufactured products that originated from the DRC, Angola, Burundi, the Central African Republic, the Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda, or Zambia (the “Covered Countries”) did not directly or indirectly finance or benefit armed groups within these countries.
In addition to the conflict minerals listed above, the U.S. Secretary of State may, from time to time, designate as a conflict mineral any mineral the Secretary finds to be financing conflict in the Covered Countries.
Ingersoll Rand’s Approach to Conflict Minerals
The SEC’s final rule on conflict minerals applies to Ingersoll Rand suppliers of products and materials that are incorporated into Ingersoll Rand's products, regardless of where the supplier is located. Ingersoll Rand will seek to responsibly source materials from the Covered Countries and to avoid supporting the armed groups causing human rights violations. Thus, Ingersoll Rand expects our suppliers to:
At this time, Ingersoll Rand uses the standard EICC/GeSI template to survey its suppliers, which includes use of the Conflict Free Smelter list. Ingersoll Rand encourages its suppliers to do the same.
Suppliers who cannot provide this data demonstrating that conflict minerals used in their products provided to Ingersoll Rand are DRC Conflict Free may not be considered for future projects with Ingersoll Rand. A supplier’s failure to cooperate with Ingersoll Rand to provide the necessary data may result in termination of the buyer/supplier relationship by Ingersoll Rand. Similarly, providing data that shows the armed groups are being supported by material purchased for Ingersoll Rand products can result in termination of the buyer/supplier relationship by Ingersoll Rand.
Form SD and Conflict Minerals Report
If you have questions or feedback regarding our Conflict Minerals program, please contact ConflictMinerals@irco.com.