Coherent, Inc.
Conflict Minerals Report
For the year ended December 31, 2020
This Conflict Minerals Report of Coherent, Inc. (“we”, “us” or the “Company”) for calendar year 2020 is provided pursuant to Rule 13p-1 (“Rule 13p-1”) under the Securities Exchange Act of 1934 (the “1934 Act”). Please refer to Rule 13p-1, Form SD and the 1934 Act Release No. 34-67716 for definitions to the terms used in this report, unless otherwise defined herein. This report has been prepared by management and includes all majority-owned subsidiaries of the Company.
Introduction
We are one of the world’s leading providers of lasers, laser-based technologies and laser-based system solutions in a broad range of commercial, industrial and scientific applications. Founded in 1966, we design, manufacture, service and market lasers, laser tools, precision optics and related accessories for a diverse group of customers. In addition to laser sources and tools, we also offer leading-edge beam forming and beam guidance systems as well as laser beam measurement and control equipment. Our laser products include diode-pumped solid-state lasers; fiber lasers; CO, CO2, excimer and ion gas lasers; optically pumped semiconductor lasers; semiconductor lasers; ultrafast lasers; and integrated laser solutions.
The capabilities of our products are exceptionally diverse and are used in a wide range of markets and applications, including microelectronics, including semiconductor test and measurement, and advanced packaging; graphic arts and display; materials processing; instrumentation for biotechnology and medical imaging; production of flat panel displays and solar cells; and in advanced engineering, genetics, biology, chemistry, and physics.
Conflict minerals are currently defined as columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives, which are limited to tantalum, tin, and tungsten, unless the Secretary of State determines that additional derivatives are financing conflict in the Democratic Republic of the Congo (“DRC”) or an adjoining country (together, the “Covered Countries”). Collectively, conflict minerals are known as “3TG” — for tin, tantalum, tungsten, and gold. 3TG are commonly used across the electronics industry generally and are necessary to the functionality and/or production of our products. Uses of the 3TG include:
· Gold is a highly efficient conductor that can carry low voltages and currents and remain free of corrosion. It is used in various Coherent systems as connectors, switch and relay contacts, soldering joints, connecting wires and connection strips.
· Tin is commonly used in the electronics industry for coating lead or zinc and steel to prevent corrosion. Tin can also be found in Coherent systems used in solders for joining electronic circuits.
· Tungsten is often used for electron emitters and is an important mineral for electrical contact materials as tungsten withstands the conditions of an electric arc. Tungsten is an important component in integrated circuitry used within Coherent systems.
· Tantalum is a heat-resistant powder that can hold a high electrical charge; it is an important element in creating capacitors that are used to control current flow in the circuit boards in most Coherent systems.
Reasonable Country of Origin Inquiry (RCOI)
To determine the reasonable country of origin of conflict minerals in our products, an internal working group evaluated our supply chain and established a risk-based resource allocation for our RCOI process. This evaluation is regularly updated. Upon review, it was noted that there has been limited year over year change in our supply chain, and therefore the initial process to create four Conflict Minerals assessment categories was again deemed valid for the 2020 reporting cycle. The Supply Chain Conflict Minerals categories are as follows:
Category |
| Description |
| Approximate Category Size |
One |
| High Risk. Suppliers from whom we directly source materials that are either fully comprised of, or largely made from, a 3TG material (example, gold) |
| 35 suppliers |
Two |
| Medium Risk. Suppliers from whom we source subsystems, components or other products which are likely to include 3TG (example, electronic subcomponents) |
| More than 2,000 suppliers representing over 46,000 unique parts |
Three |
| Low Risk. Commonly used and available (catalog) parts that may contain 3TG materials (example, screws, washers, bolts) |
|
|
Four |
| Suppliers which provide products which do not include 3TG (example, a plastic button cover) |
|
|
Following this category review, we conducted a reasonable country of origin inquiry (RCOI) employing a variety of measures to determine whether the necessary conflict minerals in our products originated from the Covered Countries. Category One suppliers were engaged through direct discussions as well as written survey responses. We successfully contacted all Category One suppliers who have reported the following Conflict Minerals status to Coherent: 99% use 3TG and are DRC Conflict Free; only one supplier has evidence of 3TG minerals use and reported such 3TG minerals as DRC conflict undeterminable. Coherent will continue to take efforts to identify supply chain risk and determine the source of the 3TG materials; where appropriate, we will pressure our suppliers to find alternate sourcing.
With regards to the large volume of Category Two and Three suppliers, our primary means of determining country of origin is through an active supply-chain survey using the Responsible Business Alliance’s (formerly the Electronic Industry Citizenship Coalition, Incorporated) Responsible Minerals Initiative (RMI) and Global e-Sustainability Initiative (RMI/GeSI), (formerly EICC/GeSI) Conflict Minerals Reporting Template. The RMI/GeSI format has become an industry standard for collecting Conflict Minerals data from the supply chain. To assist us with this survey we retained an expert outside consulting firm. Each Category Two and Three supplier is asked to provide 3TG information, always leveraging the latest RMI/GeSI format. As a formal process, we make minimally three separate attempts to contact Category Two and Three suppliers who have yet to provide a complete RMI form or who have provided an outdated RMI form. At the time of this filing, we have received responses from Category Two and Three suppliers covering 46,000 unique parts; these parts represent approximately 98% of the parts which are likely to contain 3TG minerals that were used in our end products sold in calendar year 2020. These parts have the following RMI report status: 41% have been found to be “DRC Conflict Free”; 39% are “DRC Conflict Undeterminable”; 13% show 3TG minerals were not used; 5% of the RMI forms are pending approval of our internal quality check; and approximately 2% of the parts are covered by suppliers
who have yet to respond. Due to the incomplete dataset, our conflict minerals classification is currently DRC conflict undeterminable.
For suppliers who have responded to our request for 3TG country of origin, we have been able to determine the following smelter/country information:
Minerals |
| Smelter / Country of origin may include the following |
| Change in number of |
Gold |
| Andorra, Australia, Austria, Belgium, Brazil, Canada, China, Germany, India, Indonesia, Italy, Japan, Kazakhstan, South Korea, Kyrgyzstan, Mexico, Netherlands, Philippines, Poland, Russian Federation, Singapore, South Africa, Spain, Switzerland, Taiwan, Thailand, Turkey, United Arab Emirates, United States, Uzbekistan |
| 14 in 2013 29 in 2014 35 in 2015 36 in 2016 35 in 2017 35 in 2018 30 in 2019 30 in 2020 |
|
|
|
|
|
Tantalum |
| Brazil, China, Estonia, Germany, India, Japan, Kazakhstan, Mexico, Russian Federation, Thailand, United States |
| 7 in 2013 13 in 2014 12 in 2015 14 in 2016 13 in 2017 13 in 2018 11 in 2019 11 in 2020 |
|
|
|
|
|
Tin |
| Belgium, Bolivia, Brazil, China, Indonesia, Japan, Malaysia, Peru, Philippines, Poland, Spain, Taiwan, Thailand, United States |
| 11 in 2013 14 in 2014 17 in 2015 18 in 2016 17 in 2017 17 in 2018 14 in 2019 14 in 2020 |
|
|
|
|
|
Tungsten |
| Austria, Brazil, China, Germany, Japan, South Korea, Philippines, Russian Federation, United States, Vietnam |
| 6 in 2013 7 in 2014 7 in 2015 10 in 2016 10 in 2017 10 in 2018 10 in 2019 10 in 2020 |
Coherent believes, to the extent reasonably determinable, the following table presents all smelters which, to the extent known, processed the necessary 3TG minerals that are used in Coherent products during the reporting period. Smelter information was provided to Coherent by the suppliers through their RMI/GeSI reporting form.
Metal |
| Smelter |
| Location |
Gold |
| L’Orfebre S.A. |
| Andorra |
Gold |
| Western Australian Mint (T/a The Perth Mint) |
| Australia |
Gold |
| Ogussa Osterreichische Gold- und Silber-Scheideanstalt GmbH |
| Austria |
Gold |
| Umicore S.A. Business Unit Precious Metals Refining |
| Belgium |
Gold |
| AngloGold Ashanti Corrego do Sitio Mineracao |
| Brazil |
Gold |
| Asahi Refining Canada Ltd. |
| Canada |
Gold |
| CCR Refinery - Glencore Canada Corporation |
| Canada |
Gold |
| Royal Canadian Mint |
| Canada |
Gold |
| China National Gold Group Corporation |
| China |
Gold |
| Daye Non-Ferrous Metals Mining Ltd. |
| China |
Gold |
| Gansu Seemine Material Hi-Tech Co., Ltd. |
| China |
Gold |
| Gold Refinery of Zijin Mining Group Co., Ltd. |
| China |
Gold |
| Great Wall Precious Metals Co., Ltd. of CBPM |
| China |
Gold |
| Guangdong Gaoyao Co |
| China |
Gold |
| Guangdong Jinding Gold Limited |
| China |
Gold |
| Guoda Safina High-Tech Environmental Refinery Co., Ltd. |
| China |
Gold |
| Hangzhou Fuchunjiang Smelting Co., Ltd. |
| China |
Gold |
| Heraeus Metals Hong Kong Ltd. |
| China |
Gold |
| Inner Mongolia Qiankun Gold and Silver Refinery Share Co., Ltd. |
| China |
Gold |
| Jiangxi Copper Co., Ltd. |
| China |
Gold |
| Metalor Technologies (Hong Kong) Ltd. |
| China |
Gold |
| Shandong Gold Smelting Co., Ltd. |
| China |
Gold |
| Shandong Zhaojin Gold & Silver Refinery Co., Ltd. |
| China |
Gold |
| Sichuan Tianze Precious Metals Co., Ltd. |
| China |
Gold |
| Zhongyuan Gold Smelter of Zhongjin Gold Corporation |
| China |
Gold |
| Allgemeine Gold-und Silberscheideanstalt A.G. |
| Germany |
Gold |
| Aurubis AG |
| Germany |
Gold |
| C. Hafner GmbH + Co. KG |
| Germany |
Gold |
| DODUCO GmbH |
| Germany |
Gold |
| Heimerle + Meule GmbH |
| Germany |
Gold |
| Heraeus Precious Metals GmbH & Co. KG |
| Germany |
Gold |
| SAXONIA Edelmetalle GmbH |
| Germany |
Gold |
| WIELAND Edelmetalle GmbH |
| Germany |
Gold |
| Bangalore Refinery |
| India |
Gold |
| MMTC-PAMP India Pvt., Ltd. |
| India |
Gold |
| PT Aneka Tambang (Persero) Tbk |
| Indonesia |
Gold |
| Chimet S.p.A. |
| Italy |
Gold |
| T.C.A S.p.A |
| Italy |
Gold |
| Aida Chemical Industries Co., Ltd. |
| Japan |
Gold |
| Asahi Pretec Corp. |
| Japan |
Gold |
| Asaka Riken Co., Ltd. |
| Japan |
Gold |
| Chugai Mining |
| Japan |
Gold |
| Eco-System Recycling Co., Ltd. |
| Japan |
Gold |
| Ishifuku Metal Industry Co., Ltd. |
| Japan |
Gold |
| Japan Mint |
| Japan |
Gold |
| JX Nippon Mining & Metals Co., Ltd. |
| Japan |
Gold |
| Kojima Chemicals Co., Ltd. |
| Japan |
Gold |
| Matsuda Sangyo Co., Ltd. |
| Japan |
Gold |
| Mitsubishi Materials Corporation |
| Japan |
Gold |
| Mitsui Mining and Smelting Co., Ltd. |
| Japan |
Gold |
| Nihon Material Co., Ltd. |
| Japan |
Gold |
| Ohura Precious Metal Industry Co., Ltd. |
| Japan |
Gold |
| Sumitomo Metal Mining Co., Ltd. |
| Japan |
Gold |
| Tanaka Kikinzoku Kogyo K.K. |
| Japan |
Gold |
| Tokuriki Honten Co., Ltd. |
| Japan |
Gold |
| Yamakin Co., Ltd. |
| Japan |
Gold |
| Yokohama Metal Co., Ltd. |
| Japan |
Gold |
| Kazzinc |
| Kazakhstan |
Gold |
| DSC (Do Sung Corporation) |
| Korea, Republic of |
Gold |
| Korea Zinc Co., Ltd. |
| Korea, Republic of |
Gold |
| LS-NIKKO Copper Inc. |
| Korea, Republic of |
Gold |
| SungEel HiTech |
| Korea, Republic of |
Gold |
| Torecom |
| Korea, Republic of |
Gold |
| Kyrgyzaltyn JSC |
| Kyrgyzstan |
Gold |
| Metalurgica Met-Mex Penoles S.A. De C.V. |
| Mexico |
Gold |
| Remondis Argentia B.V. |
| Netherlands |
Gold |
| Bangko Sentral ng Pilipinas (Central Bank of the Philippines) |
| Philippines |
Gold |
| KGHM Polska Miedz Spolka Akcyjna |
| Poland |
Gold |
| JSC Ekaterinburg Non-Ferrous Metal Processing Plant |
| Russian Federation |
Gold |
| JSC Uralelectromed |
| Russian Federation |
Gold |
| Moscow Special Alloys Processing Plant |
| Russian Federation |
Gold |
| OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastsvetmet) |
| Russian Federation |
Gold |
| Prioksky Plant of Non-Ferrous Metals |
| Russian Federation |
Gold |
| SOE Shyolkovsky Factory of Secondary Precious Metals |
| Russian Federation |
Gold |
| Metalor Technologies (Singapore) Pte., Ltd. |
| Singapore |
Gold |
| AU Traders and Refiners |
| South Africa |
Gold |
| Rand Refinery (Pty) Ltd. |
| South Africa |
Gold |
| SEMPSA Joyeria Plateria S.A. |
| Spain |
Gold |
| Argor-Heraeus S.A. |
| Switzerland |
Gold |
| Metalor Technologies S.A. |
| Switzerland |
Gold |
| PAMP S.A. |
| Switzerland |
Gold |
| PX Precinox S.A. |
| Switzerland |
Gold |
| Valcambi S.A. |
| Switzerland |
Gold |
| Singway Technology Co., Ltd. |
| Taiwan, Province of China |
Gold |
| Solar Applied Materials Technology Corp. |
| Taiwan, Province of China |
Gold |
| Umicore Precious Metals Thailand |
| Thailand |
Gold |
| Istanbul Gold Refinery |
| Turkey |
Gold |
| Nadir Metal Rafineri San. Ve Tic. A.S. |
| Turkey |
Gold |
| Al Etihad Gold LLC |
| United Arab Emirates |
Gold |
| Emirates Gold DMCC |
| United Arab Emirates |
Gold |
| Advanced Chemical Company |
| United States |
Gold |
| Asahi Refining USA Inc. |
| United States |
Gold |
| Geib Refining Corporation |
| United States |
Gold |
| Kennecott Utah Copper LLC |
| United States |
Gold |
| Materion |
| United States |
Gold |
| Metalor USA Refining Corporation |
| United States |
Gold |
| United Precious Metal Refining, Inc. |
| United States |
Gold |
| Almalyk Mining and Metallurgical Complex (AMMC) |
| Uzbekistan |
Tantalum |
| LSM Brasil S.A. |
| Brazil |
Tantalum |
| Mineracao Taboca S.A. |
| Brazil |
Tantalum |
| Resind Industria e Comercio Ltda. |
| Brazil |
Tantalum |
| Changsha South Tantalum Niobium Co., Ltd. |
| China |
Tantalum |
| F&X Electro-Materials Ltd. |
| China |
Tantalum |
| FIR Metals & Resource Ltd. |
| China |
Tantalum |
| Hengyang King Xing Lifeng New Materials Co., Ltd. |
| China |
Tantalum |
| Jiangxi Dinghai Tantalum & Niobium Co., Ltd. |
| China |
Tantalum |
| Jiangxi Tuohong New Raw Material |
| China |
Tantalum |
| JiuJiang JinXin Nonferrous Metals Co., Ltd. |
| China |
Tantalum |
| Jiujiang Tanbre Co., Ltd. |
| China |
Tantalum |
| Jiujiang Zhongao Tantalum & Niobium Co., Ltd. |
| China |
Tantalum |
| King-Tan Tantalum Industry Ltd. |
| China |
Tantalum |
| Ningxia Orient Tantalum Industry Co., Ltd. |
| China |
Tantalum |
| RFH Tantalum Smeltry Co., Ltd. |
| China |
Tantalum |
| Shanghai Jiangxi Metals Co. Ltd |
| China |
Tantalum |
| XinXing HaoRong Electronic Material Co., Ltd. |
| China |
Tantalum |
| XIMEI RESOURCES (GUANGDONG) LIMITED |
| China |
Tantalum |
| NPM Silmet AS |
| Estonia |
Tantalum |
| H.C. Starck Hermsdorf GmbH |
| Germany |
Tantalum |
| TANIOBIS GmbH |
| Germany |
Tantalum |
| TANIOBIS Smelting GmbH & Co. KG |
| Germany |
Tantalum |
| Metallurgical Products India Pvt., Ltd. |
| India |
Tantalum |
| Global Advanced Metals Aizu |
| Japan |
Tantalum |
| TANIOBIS Japan Co., Ltd. |
| Japan |
Tantalum |
| Mitsui Mining and Smelting Co., Ltd. |
| Japan |
Tantalum |
| Taki Chemical Co., Ltd. |
| Japan |
Tantalum |
| Ulba Metallurgical Plant JSC |
| Kazakhstan |
Tantalum |
| KEMET Blue Metals |
| Mexico |
Tantalum |
| Solikamsk Magnesium Works OAO |
| Russian Federation |
Tantalum |
| TANIOBIS Co., Ltd. |
| Thailand |
Tantalum |
| D Block Metals, LLC |
| United States |
Tantalum |
| Exotech Inc. |
| United States |
Tantalum |
| Global Advanced Metals Boyertown |
| United States |
Tantalum |
| H.C. Starck Inc. |
| United States |
Tantalum |
| QuantumClean |
| United States |
Tantalum |
| Telex Metals |
| United States |
Tin |
| Metallo-Chimique N.V. |
| Belgium |
Tin |
| EM Vinto |
| Bolivia (Plurinational State of) |
Tin |
| Operaciones Metalurgical S.A. |
| Bolivia (Plurinational State of) |
Tin |
| Magnu’s Minerais Metais e Ligas Ltda. |
| Brazil |
Tin |
| Melt Metais e Ligas S.A. |
| Brazil |
Tin |
| Mineracao Taboca S.A. |
| Brazil |
Tin |
| Resind Industria e Comercio Ltda. |
| Brazil |
Tin |
| Soft Metais Ltda. |
| Brazil |
Tin |
| White Solder Metalurgia e Mineracao Ltda. |
| Brazil |
Tin |
| Chenzhou Yunxiang Mining and Metallurgy Co., Ltd. |
| China |
Tin |
| China Tin Group Co., Ltd. |
| China |
Tin |
| Gejiu Fengming Metallurgy Chemical Plant |
| China |
Tin |
| Gejiu Kai Meng Industry and Trade LLC |
| China |
Tin |
| Gejiu Non-Ferrous Metal Processing Co., Ltd. |
| China |
Tin |
| Gejiu Yunxin Nonferrous Electrolysis Co., Ltd. |
| China |
Tin |
| Gejiu Zili Mining And Metallurgy Co., Ltd. |
| China |
Tin |
| Nankang Nanshan Tin Manufactory Co., Ltd. |
| China |
Tin |
| Yunnan Chengfeng Non-ferrous Metals Co., Ltd. |
| China |
Tin |
| Yunnan Tin Company Limited |
| China |
Tin |
| PT Menara Cipta Mulia |
| Indonesia |
Tin |
| PT Rajehan Ariq |
| Indonesia |
Tin |
| CV Tiga Sekawan |
| Indonesia |
Tin |
| CV Venus Inti Perkasa |
| Indonesia |
Tin |
| PT Aries Kencana Sejahtera |
| Indonesia |
Tin |
| PT Artha Cipta Langgeng |
| Indonesia |
Tin |
| PT ATD Makmur Mandiri Jaya |
| Indonesia |
Tin |
| PT Mitra Stania Prima |
| Indonesia |
Tin |
| PT Prima Timah Utama |
| Indonesia |
Tin |
| PT Refined Bangka Tin |
| Indonesia |
Tin |
| PT Stanindo Inti Perkasa |
| Indonesia |
Tin |
| PT Timah (Persero) Tbk Kundur |
| Indonesia |
Tin |
| PT Timah (Persero) Tbk Mentok |
| Indonesia |
Tin |
| PT Tinindo Inter Nusa |
| Indonesia |
Tin |
| Dowa |
| Japan |
Tin |
| Mitsubishi Materials Corporation |
| Japan |
Tin |
| Malaysia Smelting Corporation (MSC) |
| Malaysia |
Tin |
| Minsur |
| Peru |
Tin |
| O.M. Manufacturing Philippines, Inc. |
| Philippines |
Tin |
| Fenix Metals |
| Poland |
Tin |
| Metallo Spain S.L.U. |
| Spain |
Tin |
| Rui Da Hung |
| Taiwan, Province of China |
Tin |
| O.M. Manufacturing (Thailand) Co., Ltd. |
| Thailand |
Tin |
| Thaisarco |
| Thailand |
Tin |
| Alpha |
| United States |
Tin |
| Metallic Resources, Inc. |
| United States |
Tungsten |
| Wolfram Bergbau und Hutten AG |
| Austria |
Tungsten |
| ACL Metais Eireli |
| Brazil |
Tungsten |
| Chenzhou Diamond Tungsten Products Co., Ltd. |
| China |
Tungsten |
| Chongyi Zhangyuan Tungsten Co., Ltd. |
| China |
Tungsten |
| Ganxian Shirui New Material Co., Ltd. |
| China |
Tungsten |
| Ganzhou Huaxing Tungsten Products Co., Ltd. |
| China |
Tungsten |
| Ganzhou Jiangwu Ferrotungsten Co., Ltd. |
| China |
Tungsten |
| Ganzhou Seadragon W & Mo Co., Ltd. |
| China |
Tungsten |
| Guangdong Xianglu Tungsten Co., Ltd. |
| China |
Tungsten |
| Hunan Chenzhou Mining Co., Ltd. |
| China |
Tungsten |
| Hunan Chunchang Nonferrous Metals Co., Ltd. |
| China |
Tungsten |
| Jiangwu H.C. Starck Tungsten Products Co., Ltd. |
| China |
Tungsten |
| Jiangxi Gan Bei Tungsten Co., Ltd. |
| China |
Tungsten |
| Jiangxi Tonggu Non-ferrous Metallurgical & Chemical Co., Ltd. |
| China |
Tungsten |
| Jiangxi Xinsheng Tungsten Industry Co., Ltd. |
| China |
Tungsten |
| Jiangxi Yaosheng Tungsten Co., Ltd. |
| China |
Tungsten |
| Malipo Haiyu Tungsten Co., Ltd. |
| China |
Tungsten |
| Xiamen Tungsten (H.C.) Co., Ltd. |
| China |
Tungsten |
| Xiamen Tungsten Co., Ltd. |
| China |
Tungsten |
| Xinfeng Huarui Tungsten & Molybdenum New Material Co., Ltd. |
| China |
Tungsten |
| TANIOBIS Smelting GmbH & Co. KG |
| Germany |
Tungsten |
| H.C. Starck Tungsten GmbH |
| Germany |
Tungsten |
| A.L.M.T. TUNGSTEN Corp. |
| Japan |
Tungsten |
| Japan New Metals Co., Ltd. |
| Japan |
Tungsten |
| Woltech Korea Co., Ltd. |
| Korea, Republic of |
Tungsten |
| Philippine Chuangxin Industrial Co., Inc. |
| Philippines |
Tungsten |
| Hydrometallurg, JSC |
| Russian Federation |
Tungsten |
| Moliren Ltd. |
| Russian Federation |
Tungsten |
| Unecha Refractory metals plant |
| Russian Federation |
Tungsten |
| Wolfram Company CJSC |
| Russian Federation |
Tungsten |
| Global Tungsten & Powders Corp. |
| United States |
Tungsten |
| Kennametal Fallon |
| United States |
Tungsten |
| Kennametal Huntsville |
| United States |
Tungsten |
| Niagara Refining LLC |
| United States |
Tungsten |
| Asia Tungsten Products Vietnam Ltd. |
| Vietnam |
Tungsten |
| Masan High-Tech Materials |
| Vietnam |
Due Diligence
We are required to perform due diligence in order to determine the status of the necessary conflict minerals used in our products. Our due diligence processes and efforts have been developed to conform in all material respects with the 2nd edition of The Organization for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and the related supplements for gold and for tin, tantalum and tungsten (OECD Guidance). The OECD Guidance provides a five-step framework for risk-based due diligence in the mineral supply chain: (1) establish strong company management systems; (2) identify and assess risk in the supply chain; (3) design and implement a strategy to respond to identified risks; (4) carry out independent third-party audit of supply chain due diligence at identified points in the supply chain; and (5) report on supply chain due diligence. We provide further information on each of these elements below.
(1) Establish strong company management systems
In an effort to establish strong management systems, we:
· adopted a corporate policy on conflict-free sourcing including a stated goal to not knowingly source any metals from operations that fund conflict. Further, the policy states that Coherent will seek alternate sources of 3TG if any of our suppliers cannot demonstrate adequate due diligence documenting that the metals used in the manufacture of our products are conflict-free.
· posted our corporate policy on our Internet site at www.coherent.com/company/environmental. The content of any website referred to in this Conflict Minerals Report is included for general information only and is not incorporated by reference in this Conflict Minerals Report.
· established a Supplier Environmental Compliance Requirements document outlining the expectation for every supplier to provide Conflict Minerals declaration for all parts and materials provided to Coherent using the RMI/GeSi format.
· actively monitor, collect, analyze and aggregate conflict minerals RMI/GeSI templates and supporting documentation from manufacturers into reports that are easily downloaded for our compliance efforts from a third-party part search and BOM manager tools.
· through our third-party Conflict Minerals Module, identify the most up to date DRC conflict mineral statuses, link to all supporting documents and policies including RMI-GeSI templates and certificates of compliance, and retain all supplier history regarding compliance. Detailed searches associate suppliers with specific smelter companies, locations, substances, miner locations, and RMI-GeSI CFS lists.
· identified over 2,000 suppliers representing over 200,000 unique parts as a part of our Conflict Minerals management program.
· sent surveys to all suppliers and made multiple attempts to contact those suppliers who have yet to respond. Each returned survey is audited internally for its completeness and any potential inconsistencies. Progress is regularly reported to senior leadership and shared with the Corporate Supply Chain organization.
(2) Identify and assess risk in the supply chain
In an effort to identify and assess risk in the supply chain, we have:
· required all in-scope suppliers to disclose active smelters and refiners through the submittal of a complete RMI/GeSi form. Smelters are reviewed to determine whether they are active in the Conflict-Free Smelter Program (“CFSP”). Pursuant to our corporate policy, future decisions on sourcing will be impacted by a supplier’s response and their participation in the CFSP program.
· engaged directly with each Category One supplier to confirm that each such supplier is providing us with a completed RMI form and, where appropriate, will consider other suppliers if the supplier is unable to declare their products as DRC Conflict Free.
(3) Design and implement a strategy to respond to identified risks
In an effort to design and implement a strategy to respond to identified risks, we:
· regularly report to senior management on the status of our Conflict Minerals Program. Additionally, conflict minerals status updates are included in our ISO140000 review management meetings.
· regularly review our contingency planning for our supply chain, including replacement risk for those suppliers who have not yet replied to our information requests.
(4) Carry out independent third-party audit of supply chain due diligence at identified points in the supply chain
· We do not have a direct supplier relationship with smelters. We will continue to support the development and implementation of independent third-party audits of smelters such as the Conflict-Free Smelter Program and will encourage our suppliers to purchase materials from audited, conflict-free smelters. We are continuing to evaluate direct independent third-party audits of our Category One suppliers and an assessment of their diligence steps taken with regards to any purchases made from smelters.
(5) Report on supply chain due diligence
In an effort to report on supply chain due diligence, we have:
· leveraged our Corporate Policy on Conflict Minerals and Environmental Requirements document, which is provided to all current suppliers (as well as future potential suppliers). Further, suppliers are encouraged to sign a “Certificate of Compliance with Coherent’s Environmental Policy,” which includes the obligation to provide Conflict Minerals declarations.
· filed this Conflict Minerals Report as an Exhibit to our Form SD and publicly disclosed it on our Internet site at www.coherent.com/company/environmental.
Additional Risk Mitigation Steps
As noted above, we have made the determination that our products are DRC conflict undeterminable due to the incomplete dataset provided by our suppliers. We will continue to take additional measures to improve our conflict minerals program including:
· working with our smaller suppliers to further educate them on the Conflict Minerals rule and assist them in completing the RMI/GeSI form;
· critically evaluating the business relationship with suppliers who refuse to provide a complete assessment of their conflict minerals status;
· identifying alternate supply sources for suppliers who respond as “Not Conflict Free”; and
· requesting that all smelters identified in the RMI/GeSI survey participate in a program such as the Conflict Free Smelter (CFS) program in order to obtain a “conflict-free” designation.
