Conflict Minerals Compliance
Conflict Minerals Compliance
Conflict Minerals refer to tantalum, tin, tungsten, gold (3TG), and other minerals from the Democratic Republic of Congo and its neighboring countries, where the armed groups use forced labor, human right abuses, and other illegal means to mine, sell and fund weapons, causing regional unrest. Tantalum, tin, tungsten, and gold are minerals necessary for the functional operation of electronic products. In order to fulfill the social responsibility of human rights and environmental protection, USI has placed a conflict-free mineral procurement policy, and promises not to use conflict minerals, and requires suppliers to gradually purchase minerals from conformant smelters to reach a conflict-free supply chain and customer requirements.
USI Corporate Policy for Sourcing Conflict Minerals
The mining and distribution of “conflict minerals1” originating from the Democratic Republic of the Congo (the “DRC”) are sometimes controlled by violent organizations in order to fund conflict in that country and adjacent regions. Our industry supply chains are inadvertently subject to metals derived from these conflict minerals which can be introduced through the metals we use such as gold, tin, tantalum and tungsten. Universal Scientific Industrial (Shanghai) Co., Ltd. and all its affiliates (hereafter collectively referred to as “USI”) is dedicated to the elimination of these conflict minerals in our supply chain and to using only responsibly sourced conflict-free minerals2. We expect our suppliers to source conflict-free minerals from smelters or refineries that have been certified by an independent third-party audit program to fulfill our objective. It is also our objective to support the continued use of conflict-free minerals from the DRC and its adjacent regions such that responsible mining is not diminished. We exercise due diligence with our suppliers on the origin and supply chain of minerals in accordance with the “OECD Due Diligence for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas” to establish conflict minerals management mechanism.
To protect the human rights, health and environment for workers in the material production areas, we commit to widening the scope of investigation and information disclosure; in addition to gold, tin, tantalum and tungsten, more minerals (such as cobalt and mica) will be included gradually from conflict-affected and high-risk areas("CAHRAs") in accordance with the Responsible Minerals Initiative ("RMI") standards. USI requires suppliers must support this policy by the following guidelines and widen their scope of investigations and disclosures to continuously strengthen our responsible sourcing programs.
- A. Being diligent in their assessment and validation of their supply chains to ensure USI’s objectives of a transparent supply chain, and conflict-free purchases as inputs to the services and products we produce.
- B. At all times be in compliance with all regional and international regulations for conflict minerals.
- C. At all times be in compliance with industry standards for the sourcing and reporting of conflict minerals.
- D. Being diligent and accurate in their formal assurances of conflict-free minerals provided to us.
*Conflict minerals include columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives as defined in the Dodd-Frank Act section 1502 and SEC Rule 13p-1 under the Securities Exchange Act of 1934.
**Conflict-free minerals are conflict minerals that through their distribution directly or indirectly do not benefit violent organizations in the Democratic Republic of Congo and its adjacent regions.
Conflict Minerals Management Process
USI follows the OECD”Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High-Risk Areas”, the five-step framework to establish a management system. USI conducts due diligence by identifying and assessing risks, then respond and mitigate the risks through the supply chain. In addition, USI creates a supplier conflict mineral audit checklist and supports the suppliers to establish a management mechanism that meets with the OECD due diligence guidance through on-site or document audits.
Identify and Assess Risk
Respond to identified Risk
Conduct third party audit
Report annually on Due Diligence
Conflict Minerals Commitment and Future Plans
USI utilizes the resources and guidance provided by RMI and OECD to implement measures to respond to conflict minerals in the supply chain. Suppliers are required to refer to RMI conformant smelter lists to meet USI's target to a conflict-free minerals supply chain.
- 1. Establish a supplier's conflict minerals sourcing policy and convey USI's requirement through supplier seminar.
- 2. Conduct annual CMRT survey to assess the smelters in the supply chain, and immediately request to transition away if any non-conformant smelters exist.
- 3. Analyze and identify the risks of the supplier's smelter, continue to conduct supplier on-site audit to support the supplier to have a firm management mechanism.
- 4. Optimize supplier management system, to improve the quality of the smelter data and at the same time meet customer reporting requirements.
- 5. Set up plans to investigate the sources of cobalt, mica, and meet the standards of RMI and RMAP.
Reasonable Country of Origin Inquiry (RCOI)
USI conducts RCOI and promotes the procurement of conflict-free minerals from the supply chains each year. At the same time, expanding the scope of supply chains, to collect and assess the source origin of the 3TG and cobalt smelters from the conflict regions or the conflict-affected and high-risk areas (CAHRAs). Key materials adopted by USI come from qualified smelters, the 3TG and cobalt smelters distribution in recent years is illustrated in the tables below:
3TG and Cobalt from Qualified Smelters Distributions:
USI continues to promote the procurement of conflict-free minerals to the supply chain, and expanded supply chain due diligence. In 2021, a total of 416 suppliers completed the CMRT (Conflict Minerals Reporting Template) survey. In addition, we completed the CRT (Cobalt Reporting Template) survey of 150 suppliers, response rate reached 100%.
Number of Qualified Suppliers:
|Number of suppliers that completed due diligence||379||352||359||416|
In the three product lines of USI, System in Module, Visual Products, and Advanced Mobile Products accounts for a total of 75% company revenue, sourced from qualified 3TG smelters.
Qualify smelter numbers and 3TG Distributions:
|Product Line||System in Module||Visual Product||Advanced Mobile||Qualify Smelter Percentage|
Independent Private Sector Audit and Public Disclosure
1.Every year , USI undergo IPSA2 on the results of supplier due diligence and our targeted supplier3 used 100% only from qualified smelters.
2.USI as a subsidiary of ASEH, discloses conflict minerals investigation results through ASEH annal Conflict Minerals report filing to the US Security and Exchange Commission. For complete Conflict Minerals report:
2.IPSA, Independent Private Sector Audit
3.Target supplier, annual 92% of total purchase amount
Conflict Minerals Contact
If you have any questions, comments or suggestions regarding conflict minerals program, please contact: firstname.lastname@example.org