Overview of the Conflict Minerals Issue
The Democratic Republic of the Congo (DRC) is a Central African country with vast mineral wealth, including reserves of cassiterite (tin), columbite-tantalite (tantalum), wolframite (tungsten) and gold. For many years, armed groups have fought to control mines within the DRC and have benefited financially from the proceeds of mineral trade; those armed groups have been cited for committing violent crimes against locals and perpetrating human rights abuses. As a result, these minerals are also known as “conflict minerals1)”.
The metals tantalum, tin, tungsten and gold are used in manufactured goods across many industries, including the aerospace, appliances, automotive, electronics, jewelry, medical and tool & die industries. In an effort to address the humanitarian crisis associated with conflict minerals, the United States (U.S.) enacted legislation requiring that U.S. companies report to the Securities and Exchange Commission (SEC) on their use of conflict minerals sourced from the DRC and surrounding region2). Several other governments are considering initiatives to address conflict minerals.
LG ELECTRONICS’ POLICY FOR CONFLICT MINERALS
Respect for human rights and the environment are core commitments of LG Electronics (LG) as a responsible corporate citizen. We are particularly concerned about the human rights abuses that may be associated with extracting, trading, handling and exporting minerals from the Democratic Republic of Congo (“DRC”) and adjoining countries. It is LG’s policy that tin, tantalum, tungsten and gold contained in our products shall not be derived from sources that finance or benefit armed groups in the DRC or adjoining countries.
LG is committed to adopting, widely disseminating and incorporating principles in support of this goal in contracts, agreements and/or communication with suppliers. LG expects our suppliers to have in place policies and due-diligence measures to facilitate the sourcing of minerals that are “DRC conflict free.3)” In addition, LG requires our suppliers to comply with LG’s Supplier Code of Conduct, based on the Electronic Industry Citizenship Coalition (ElCC) Code of Conduct, which sets forth LG’s broader standards for suppliers and includes provisions relating to human rights, ethical conduct, and environmental protection as well as additional provisions relating to conflict minerals.
Pursuant to this policy, LG will also:
- Carry out due diligence with relevant suppliers consistent with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and encourage our suppliers to conduct due diligence with their suppliers.
- Encourage suppliers to responsibly source tin, tantalum, tungsten and gold from the DRC and adjoining countries in order to prevent an embargo and associated worsening of economic and humanitarian conditions. In addition, all suppliers to LG must document their efforts to determine the source and provide LG with evidence as to the origin of any tantalum, tin, tungsten and gold in materials to be supplied to LG. In other words, all suppliers must register conflict minerals information on LG’s IT system or they are prohibited from supplying their materials to LG (starting January 2015).
- Establish the expectation that our suppliers source from Conflict Free Smelters (CFS) validated through the Conflict Free Smelter Program, or an alternative facility assessment program, where available.
- Collaborate with our suppliers and others on industry-wide solutions (EICC, Conflict Free Sourcing Initiative (CFSI), etc.) to drive smelters to participate in the Conflict Free Smelter Program or an alternative facility assessment program.
- Commit to transparency in the implementation of this policy by making available reports on our progress to relevant stakeholders and the public.
LGE PROGRESS REPORT
COLLABORATING TO ADDRESS CONFLICT MINERALS
Electronics Industry Citizenship Coalition (EICC)
In 2010, LG Electronics joined the Electronic Industry Citizenship Coalition (EICC) to align its Corporate Social Responsibility framework to industry standards established by the EICC’s Code of Conduct and to continue to improve the company’s performance in key areas of social, environmental and ethical issues.
Corporate Humanitarian Support in the DRC
Approximately 6.5 million people are food insecure in the DRC, including 2.6 million people who have been internally displaced by years of civil unrest due to war and conflict.
The United Nations World Food Program (WFP) supports more than 4 million people through emergency relief, early recovery and resilience program. The WFP particularly reaches out to the most vulnerable, notably women and children, providing emergency food assistance as well as supporting programs to empower and protect women and girls.
LG Corp., LG Electronics parent company, has been a partner in the WFP’s global network since 2009 and supports women’s empowerment activities in the DRC through financial contributions. LG Corp supports programs including those that provide opportunities for women displaced by years of fighting in DRC to achieve their full potential and play a key role in developing their own community.
Support for Small and Mid-Sized Suppliers
Through its membership with the Korea Electronics Association (KEA), LG Electronics supports conflict mineral related programs for domestic small and mid-sized companies. LG Electronics is helping to establish joint measures with domestic electronics companies and offering support for small and mid-sized companies, for example, developing a guide for the use of conflict minerals and how to conduct conflict mineral audits for suppliers.
Other Efforts to Support Responsible Mineral Sourcing
LG Electronics joined a multi-stakeholder working group after becoming aware of environmental and mine worker safety concerns associated with the tin mining sector of Banka Belitung, Indonesia. LG Electronics takes this matter very seriously and is committed to supporting the improvement of working conditions in the electronics supply chain. The working group is convened by the International Trade Initiative (IDH) and includes interested stakeholders from industry and non-governmental organizations.
The purpose of the Tin Working Group is to positively contribute to addressing the sustainability challenges of tin mining and smelting in Bangka and Belitung while recognizing the economic benefits of the sector in terms of development and poverty reduction. These efforts are supported by financial contributions from IDH and the corporate members of the working group. For status updates on the progress of the working group
please visit http://www.idhsustainabletrade.com/mining-and-minerals
If you would like to learn more about LGE’s conflict mineral management, send email to email@example.com with information of Region/Company name/Contact Person/Contact e-mail.
- 1) The term “conflict mineral” is defined by U.S. law in Section 1502(e)(4) of the The Dodd-Frank Wall Street Reform and Consumer Protection Act ( i.e., the Act) as (A) columbite-tantalite, also known as coltan (the metal ore from which tantalum is extracted); cassiterite (the metal ore from which tin is extracted); gold; wolframite (the metal ore from which tungsten is extracted); or their derivatives; or (B) any other mineral or its derivatives determined by the Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country.
- 2) The Dodd Frank Wall Street Reform and Consumer Protection Act entered into effect in 2010, and the SEC’s conflict minerals rule implementing the Act was finalized in 2012. In addition to the DRC, the Act and SEC rule cover nine countries that share an internationally recognized border with the DRC. Each is referred to as an “adjoining country” and is defined in Section 1502(e)(1) of the Act , which presently includes Angola, Burundi, Central African Republic, the Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda, and Zambia. The DRC and adjoining countries together are also referred to as the “covered countries.”
- 3) Defined under the U.S. Securities and Exchange Commission conflict minerals rule to mean products that do not contain conflict minerals (tin, tantalum, tungsten, and/or gold) that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo (DRC) or adjoining countries.