The U.S. conflict minerals legislation is designed to reduce funding to armed groups benefitting from mineral trade in the Democratic Republic of the Congo (DRC) or adjoining countries. Ford is required to investigate the origin of the conflict minerals in our products. Our goal is to use only conflict-free sources of tin, tungsten, tantalum and gold. We file an annual report disclosing the status of conflict minerals in our products.
Tin, tungsten, tantalum and gold (3TG) are used in many auto parts and components, from engine assemblies to airbags. We work tirelessly to ensure the minerals we use in our vehicles are DRC conflict-free, and continue to support responsible mineral sourcing in the DRC and adjoining countries.
In August 2012, the U.S. Securities and Exchange Commission (SEC) adopted the final rule to implement reporting and disclosure requirements concerning conflict minerals. Since 2014, under the U.S. Dodd-Frank Act 20101, public companies have been required to conduct due diligence to determine the origin of the conflict minerals in their products and report annually to the SEC in the hope of ending violent conflict in the DRC and adjoining countries. We are one of several automotive manufacturers obliged to report on conflict minerals in our supply chains in a Specialized Disclosure report, filed annually with the SEC.
To enable compliance with this disclosure rule, suppliers that provide us with components containing tin, tungsten, tantalum and gold are expected to conduct due diligence to understand the origins of such minerals, source them responsibly, and not knowingly provide parts containing minerals that may contribute to conflict. They are also encouraged to use validated, DRC conflict-free smelters and refiners for the tin, tungsten, tantalum and gold purchased for use in Ford products. We encourage them to use the Due Diligence Guidance compiled by the Organisation for Economic Co-operation and Development (OECD) to assess the chain of custody of these minerals.
Suppliers are required to submit an annual Conflict Minerals Reporting Template (CMRT) to Ford. In 2015, we met our goal to achieve a 100 percent response rate from in-scope suppliers, up from 91 percent in 2014. In 2016, we will continue to work with our suppliers to improve the quality of their reports.
Industry and Cross-Industry Leadership
Our leadership position among our industry peers, across other sectors and in multi-stakeholder initiatives extends to developing solutions and sharing best practices to ensure responsible sourcing in our supply chain.
Our memberships and leadership positions include the following:
Automotive Industry Action Group (AIAG) – Ford’s active role on the Smelter Engagement and Best Practices teams supports the development of processes and tools to educate suppliers and improve supply chain reporting transparency
Conflict-Free Sourcing Initiative (CFSI) – Ford is one of more than 300 CFSI members participating in cross-industry smelter engagement, visits and other initiatives to encourage smelter participation in the Conflict-Free Smelter Program. We also hold a non-voting seat on the CFSI Steering Committee, representing AIAG
Multi-Stakeholder Group (MSG) – The MSG lies at the heart of the Extractive Industries Transparency Initiative (EITI). Ford participates in efforts to develop efficient solutions to obtain conflict-free minerals from the DRC
Public-Private Alliance for Responsible Minerals Trade (PPA) – Ford serves on the PPA’s Governance Committee contributing to regional solutions for certified conflict-free minerals
As we continue on our conflict minerals journey, we have set the following measurable goals:
- 100 percent response rate from in-scope suppliers for annual reporting
- Year-over-year improvement in the percentage of suppliers providing smelter lists
- Year-over-year improvement in the percentage of suppliers using CFSI-compliant conflict-free smelters
- Participate in smelter outreach efforts to encourage participation in the CFSI audit process
- Specifically, Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.