Exhibit 1.01 Conflict Minerals Report
Telefonaktiebolaget LM Ericsson
Conflict Minerals Report for the year ended December 31, 2014
This Conflict Minerals Report of Telefonaktiebolaget LM Ericsson for the year ended December 31, 2014 is provided pursuant to Rule 13p-1 under the Securities Exchange Act of 1934, as amended, (the “Rule”). The Rule was adopted by the U.S. Securities and Exchange Commission (the “SEC”) to implement disclosure and reporting requirements pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. As permitted by the Rule, this report has not been subject to an independent private sector audit.
1. Overview
Ericsson is a global provider of telecommunications infrastructure related products and services, including communications networks, services and support solutions.
This report has been prepared by the management of Telefonaktiebolaget LM Ericsson (herein referred to as “Ericsson”, the “Company”, “we”, “us”, or “our”). This report does not include the activities of entities that are not required to be consolidated in our financial statements.
In accordance with the Rule, this report is available on our website:
http://www.ericsson.com/thecompany/investors/financial-reports.
2. Supply Chain
The hardware provided by Ericsson largely consists of electronics. The supply chain is complex with multiple tiers of suppliers. For manufacturing, Ericsson purchases customized and standardized components from several global providers as well as from local and regional suppliers, either off-the-shelf or in accordance with Ericsson’s design or specifications. Certain types of components, such as power modules, are produced in-house and the production of electronic modules and sub-assemblies is mostly outsourced to manufacturing services companies. Final configuration of products is largely done in-house and on-demand. This consists of assembling and testing modules and integrating them into complete units. A number of Ericsson’s suppliers design and manufacture highly specialized and customized components. Ericsson gathers materials declarations from suppliers, which give Ericsson considerable insight into the materials used in our products, including cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, tin, tantalum, tungsten and gold (“3TG”).
Ericsson relies on its first tier suppliers to provide information on the origin of 3TG contained in components and parts included in Ericsson’s products, including sources of 3TG that are supplied to them from sub-suppliers. Ericsson’s first tier suppliers are required to comply with the requirements in the Ericsson Lists of Banned and Restricted Substances, which include an obligation to provide information on 3TG upon request and to have appropriate due diligence processes in place to identify the source and chain of custody of 3TG. Our first tier suppliers are similarly reliant upon information provided by their suppliers. Certain of Ericsson’s large hardware suppliers are also SEC registrants and subject to the Rule.
The identification of first tier suppliers of Ericsson that are in scope under the Rule involved different parts of Ericsson’s global organization including Ericsson’s sourcing organization, regions, business units and local production sites. Suppliers identified to be in scope are first tier suppliers of Ericsson supplying (i) products containing 3TG that Ericsson contracts to manufacture, (ii) materials, parts, components, products and similar, containing 3TG, that are incorporated into or included in a product manufactured by Ericsson, or (iii) materials used in the production of Ericsson’s products where 3TG becomes a part of the final product. Suppliers of products purchased off-the-shelf and not included in, or incorporated into an Ericsson product have been considered not in scope for purposes of the Rule. We surveyed first tier suppliers identified to be in scope and analyzed and followed up responses as deemed appropriate.
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Exhibit 1.01 Conflict Minerals Report
Ericsson believes that industry cooperation is the best way to address issues related to 3TG in an efficient and transparent way. Therefore Ericsson is engaged and actively cooperates with other major manufacturers and participates in 3TG industry initiatives such as the Conflict Free Sourcing Initiative (CFSI) driven by the Global e-Sustainability Initiative (GeSI) and the Electronic Industry Citizenship Coalition (EICC).
We do not typically have a direct relationship with 3TG smelters and refiners and we do not perform or direct audits of these entities within our supply chain. In accordance with the OECD 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 (the “OECD Guidance”), we support the CFSI’s audit of smelters’ and refiners’ due diligence activities. In our internal processes we use data obtained through our membership in the CFSI, using CFSI’s Reasonable Country of Origin Inquiry Report for Ericsson (CFSI member LMEE).
3. Due Diligence Process
Ericsson has one global management system, known as the “Ericsson Group Management System” (the “EGMS”). The EGMS is a framework consisting of rules and requirements for Ericsson’s business, specified through process and organization descriptions, policies, directives and instructions. The management system is applied in Ericsson’s operations globally, and its consistency and global reach is designed to build trust in the way Ericsson works. Ericsson does not implement external requirements without analyzing them and putting them into the Ericsson context.
Ericsson has processes in place for the purpose of exercising due diligence in its supply chain. The design of these processes conforms substantially to the OECD Guidance. Due diligence within Ericsson is an on-going process, both proactive and reactive, where suppliers are continuously evaluated against Ericsson’s requirements to ensure that these requirements are systematically incorporated in the suppliers’ processes. Ericsson has published additional information about its commitment to responsible sourcing and engagement with its suppliers and other stakeholders in its Sustainability and Corporate Responsibility Report for 2014, which includes an annual summary of Ericsson’s performance in the areas of responsible business; energy, environment and climate change; and communication for all.
The Company has established a program team for reporting on 3TG and compliance with the Rule. This team consists of representatives from different parts of the organization, including environmental product management, government and industry relations, legal affairs, sourcing and communications. This team is responsible for our 3TG implementation work and senior management is regularly informed about matters relating to 3TG. Controls include, but are not limited to, our Code of Business Ethics and Code of Conduct, which outlines expected behaviors for all Ericsson’s employees and suppliers, and the Ericsson Lists of Banned and Restricted Substances, which include supplier requirements relating to 3TG as described above and are integrated in supplier agreements.
With respect to the OECD requirement to strengthen engagement with suppliers, during 2014, Ericsson has worked to further strengthen its processes to allow identification of smelters/refiners in the supply chain. First tier suppliers identified to be in scope were requested to provide information on 3TG in their supply chain through filling in and submitting the EICC/GeSI Conflict Minerals Reporting Template 3.01 via a data tool (the “Template”). The Template was developed to facilitate disclosure and communication of information regarding smelters that provide material to a company’s supply chain. Suppliers were provided with support material, including the generally available instructions and training illustrating the use of the tool that is available on CFSI’s website. To ensure sufficient quality, a high response rate and to minimize risks, the responses received were continuously analyzed and followed up as deemed appropriate. Several suppliers were contacted via e-mail or telephone to improve the quality of responses and increase the response rate. As part of our risk mitigation efforts these additional efforts were mainly targeted at suppliers that are awarded large parts of our business on an ongoing basis. The data obtained was saved, reviewed and analyzed by Ericsson. We have a data system to retain relevant documentation.
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Exhibit 1.01 Conflict Minerals Report
We have grievance mechanisms whereby employees and suppliers can report violations of Ericsson’s policies and have whistleblower procedures for the reporting of alleged violations of laws or the Code of Business Ethics that (i) are conducted by Group or local management, and (ii) relate to corruption, questionable accounting or auditing matters or otherwise seriously affect vital interests of the Group or personal health and safety. Violations reported through the whistleblower procedures are handled by Ericsson’s Group Compliance Forum, consisting of representatives from Ericsson’s internal audit function, Group Function Legal Affairs, Group Security, and Group Function Human Resources. Information regarding any incident is reported to the Audit Committee. Reports include measures taken, details of the responsible Group function and the status of any investigation.
During 2014, we have worked to improve our due diligence processes with respect to 3TG, mainly focusing on the quality of data received from suppliers surveyed. This includes increased communication and collaboration with suppliers for purposes of improving the response rate of surveyed suppliers and improving the reliability and quality of the information provided. During 2014 we also published a public statement on 3TG on our external website and initiated work to increase 3TG awareness within Ericsson and among suppliers, a work carried out continuously. Ericsson’s public statement on the sourcing of 3TG is available on our website: http://www.ericsson.com/res/thecompany/docs/corporate-responsibility/statement-on-sourcing-of-conflict-minerals.pdf
4. Due Diligence Results
We reviewed the supplier responses against criteria developed to determine which responses required further engagement with our suppliers. These criteria were developed to identify whether the responses from suppliers were incomplete as well as inconsistencies within the data reported in the Template. Further inquiries were made as deemed appropriate and, as mentioned above, we have had a risk based approach and have prioritized follow up activities with certain preferred and approved suppliers.
Among the supplier responses, we identified approximately 200 smelters as potential sources of 3TG that were reported to be in the supply chain at some point during the 2014 calendar year. Approximately 50% of the identified smelters were identified as certified conflict-free using the CFSI Conflict-Free Smelter Program. The following table presents, by mineral, the percentages of identified smelters or refiners verified as conflict-free, in the audit process or self-declared in accordance with the TI-CMC Category A members Self-Declared Sourcing Information.
| Identified smelters or refiners verified as conflict-free, in the audit process, or self-declared in accordance with the TI-CMC for tungsten. | ||||
Tantalum | 100 | % | ||
Tin | 79 | % | ||
Tungsten | 78 | % | ||
Gold | 64 | % | ||
We support the refinement and expansion of the list of participating smelters through our membership in the CFSI program.
For the calendar year 2014, our inquiries were made on the supplier level and the supplier responses received provided data at a company or divisional level and not isolated to products and components provided to us. Inquiries also include responses where suppliers were unable to specify the smelters or
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Exhibit 1.01 Conflict Minerals Report
refiners used for components supplied to us. We are unable to validate that any of these smelters or refiners are actually in our supply chain. However, based on the information provided by Ericsson’s suppliers through December 31, 2014, Ericsson believes that the facilities that may have been used to process the 3TG in Ericsson’s products include the smelters and refiners listed in Annex 1 below.
Ericsson does not have sufficient information to determine with specificity the countries of origin of the 3TG in our products or whether they are from recycled and scrap sources.
Through our participation in CFSI, and requesting our first tier suppliers to complete the Template, we have determined that seeking information about 3TG smelters and refiners in our supply chain represents the most reasonable effort we can make to determine the mines or locations of origin of the 3TG in our supply chain.
During 2015, we anticipate to continue to review and evolve our due diligence processes with respect to 3TG. As part of these efforts, we expect to continue to provide training for suppliers and developing the collaboration with suppliers for purposes of further improving the supplier response rate and the reliability and quality of information provided. Our engagement in the CFSI program is anticipated to continue.
5. Forward Looking Statements etc.
Certain of the matters discussed in this report, including in particular our due diligence processes with respect to 3TG, include forward-looking statements. Readers of this document are cautioned that our forward-looking statements are not guarantees of our future actions, which may differ materially from the expectations expressed in the forward-looking statements. We expressly disclaim a duty to provide updates to these forward-looking statements after the date of this filing to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events.
The information included on any websites that appear in this report is not incorporated by reference in this report.
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Exhibit 1.01 Conflict Minerals Report
Annex 1
Metal | Smelter or Refiner Name | |
| Gold | Aida Chemical Industries Co. Ltd. * | |
| Gold | Allgemeine Gold-und Silberscheideanstalt A.G.* | |
| Gold | Almalyk Mining and Metallurgical Complex (AMMC) | |
| Gold | AngloGold Ashanti Córrego do Sítio Minerção* | |
| Gold | Argor-Heraeus SA* | |
| Gold | Asahi Pretec Corporation* | |
| Gold | Asaka Riken Co Ltd | |
| Gold | Atasay Kuyumculuk Sanayi Ve Ticaret A.S.* | |
| Gold | Aurubis AG* | |
| Gold | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) | |
| Gold | Bauer Walser AG | |
| Gold | Boliden AB* | |
| Gold | C. Hafner GmbH + Co. KG* | |
| Gold | Caridad | |
| Gold | CCR Refinery – Glencore Canada Corporation* | |
| Gold | Cendres & Métaux SA | |
| Gold | Chimet S.p.A.* | |
| Gold | China National Gold Group Corporation | |
| Gold | Chugai Mining | |
| Gold | Colt Refining | |
| Gold | Daejin Indus Co. Ltd | |
| Gold | DaeryongENC | |
| Gold | Daye Non-Ferrous Metals Mining Ltd. | |
| Gold | Do Sung Corporation | |
| Gold | Doduco | |
| Gold | Dowa Metals & Mining.* | |
| Gold | Eco-System Recycling Co., Ltd.* | |
| Gold | FSE Novosibirsk Refinery | |
| Gold | Gansu Seemine Material Hi-Tech Co Ltd | |
| Gold | Guangdong Jinding Gold Limited | |
| Gold | Hangzhou Fuchunjiang Smelting Co., Ltd. | |
| Gold | Heimerle + Meule GmbH* | |
| Gold | Heraeus Ltd. Hong Kong* | |
| Gold | Heraeus Precious Metals GmbH & Co. KG* |
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Exhibit 1.01 Conflict Minerals Report
Metal | Smelter or Refiner Name | |
| Gold | Hunan Chenzhou Mining Industry Group | |
| Gold | Hwasung CJ Co. Ltd | |
| Gold | Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited | |
| Gold | Ishifuku Metal Industry Co., Ltd.* | |
| Gold | Istanbul Gold Refinery* | |
| Gold | Japan Mint* | |
| Gold | Jiangxi Copper Company Limited | |
| Gold | Johnson Matthey Inc* | |
| Gold | Johnson Matthey Ltd* | |
| Gold | JSC Ekaterinburg Non-Ferrous Metal Processing Plant* | |
| Gold | JSC Uralectromed | |
| Gold | JX Nippon Mining & Metals Co., Ltd.* | |
| Gold | Kazzinc Ltd* | |
| Gold | Kennecott Utah Copper LLC* | |
| Gold | Kojima Chemicals Co., Ltd* | |
| Gold | Korea Metal Co. Ltd | |
| Gold | Kyrgyzaltyn JSC | |
| Gold | L’ azurde Company For Jewelry* | |
| Gold | Lingbao Jinyuan Tonghui Refinery Co. Ltd. | |
| Gold | LS-NIKKO Copper Inc.* | |
| Gold | Materion* | |
| Gold | Matsuda Sangyo Co., Ltd.* | |
| Gold | Metalor Technologies SA* | |
| Gold | Metalor Technologies (Hong Kong) Ltd* | |
| Gold | Metalor Technologies (Singapore) Pte. Ltd.* | |
| Gold | Metalor USA Refining Corporation* | |
| Gold | Met-Mex Peñoles, S.A.* | |
| Gold | Mitsubishi Materials Corporation* | |
| Gold | Mitsui Mining and Smelting Co., Ltd.* | |
| Gold | Moscow Special Alloys Processing Plant | |
| Gold | Nadir Metal Rafineri San. Ve Tic. A.S* | |
| Gold | Navoi Mining and Metallurgical Combinat | |
| Gold | Nihon Material Co. LTD* | |
| Gold | Ohio Precious Metals, LLC* | |
| Gold | Ohura Precious Metal Industry Co., Ltd* | |
| Gold | OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastvetmet)* | |
| Gold | OJSC Kolyma Refinery | |
| Gold | PAMP SA* | |
| Gold | Penglai Penggang Gold Industry Co Ltd |
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Exhibit 1.01 Conflict Minerals Report
Metal | Smelter or Refiner Name | |
| Gold | Prioksky Plant of Non-Ferrous Metals | |
| Gold | PT Aneka Tambang (Persero) Tbk* | |
| Gold | PX Précinox SA* | |
| Gold | Rand Refinery (Pty) Ltd* | |
| Gold | Royal Canadian Mint* | |
| Gold | Sabin Metal Corp. | |
| Gold | SAMWON METALS Corp. | |
| Gold | Schone Edelmetaal* | |
| Gold | SEMPSA Joyería Platería SA* | |
| Gold | Shandong Zhaojin Gold & Silver Refinery Co. Ltd* | |
| Gold | So Accurate Group, Inc. | |
| Gold | SOE Shyolkovsky Factory of Secondary Precious Metals | |
| Gold | Solar Applied Materials Technology Corp.* | |
| Gold | Tanaka Kikinzoku Kogyo K.K.* | |
| Gold | The Great Wall Gold and Silver Refinery of China | |
| Gold | The Refinery of Shandong Gold Mining Co. Ltd* | |
| Gold | Tokuriki Honten Co., Ltd* | |
| Gold | Tongling nonferrous Metals Group Co., Ltd | |
| Gold | Torecom | |
| Gold | Umicore Brasil Ltda* | |
| Gold | Umicore Precious Metals Thailand* | |
| Gold | Umicore SA Business Unit Precious Metals Refining* | |
| Gold | United Precious Metal Refining, Inc.* | |
| Gold | Valcambi SA* | |
| Gold | Western Australian Mint trading as The Perth Mint* | |
| Gold | YAMAMOTO PRECIOUS METAL CO., LTD. | |
| Gold | Yokohama Metal Co Ltd | |
| Gold | Yunnan Copper Industry Co Ltd | |
| Gold | Zhongyuan Gold Smelter of Zhongjin Gold Corporation | |
| Gold | Zijin Mining Group Co. Ltd | |
| Tantalum | Changsha South Tantalum Niobium Co., Ltd.* | |
| Tantalum | Conghua Tantalum and Niobium Smeltry* | |
| Tantalum | Duoluoshan* | |
| Tantalum | Exotech Inc.* | |
| Tantalum | F&X Electro-Materials Ltd.* | |
| Tantalum | Global Advanced Metals* | |
| Tantalum | Guangdong Zhiyuan New Material Co., Ltd.* | |
| Tantalum | H.C. Starck Group* | |
| Tantalum | Hengyang King Xing Lifeng New Materials Co., Ltd.* |
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Exhibit 1.01 Conflict Minerals Report
Metal | Smelter or Refiner Name | |
| Tantalum | Hi-Temp* | |
| Tantalum | JiuJiang JinXin Nonferrous Metals Co., Ltd.* | |
| Tantalum | Jiujiang Tanbre Co., Ltd.* | |
| Tantalum | Kemet Blue Powder* | |
| Tantalum | King-Tan Tantalum Industry Ltd* | |
| Tantalum | LSM Brasil S.A.* | |
| Tantalum | Metallurgical Products India (Pvt.) Ltd.* | |
| Tantalum | Mineração Taboca S.A.* | |
| Tantalum | Mitsui Mining & Smelting* | |
| Tantalum | Molycorp Silmet A.S.* | |
| Tantalum | Ningxia Orient Tantalum Industry Co., Ltd.* | |
| Tantalum | Plansee* | |
| Tantalum | Quantumclean* | |
| Tantalum | RFH Tantalum Smeltry Co., Ltd* | |
| Tantalum | Solikamsk Metal Works* | |
| Tantalum | Taki Chemicals* | |
| Tantalum | Telex* | |
| Tantalum | Ulba* | |
| Tantalum | Yichun Jin Yang Rare Metal Co., Ltd* | |
| Tantalum | Zhuzhou Cement Carbide* | |
| Tin | Alpha | |
| Tin | Jiangxi Ketai Advanced Material Co., Ltd* | |
| Tin | China Tin Group Co., Ltd. | |
| Tin | Yunnan Tin Group (Holding) Company Limited* | |
| Tin | CNMC (Guangxi) PGMA Co. Ltd. | |
| Tin | Cooperativa Metalurgica de Rondônia Ltda. | |
| Tin | CV Serumpun Sebalai | |
| Tin | CV United Smelting* | |
| Tin | EM Vinto* | |
| Tin | Estanho de Rondônia S.A. | |
| Tin | Fenix Metals | |
| Tin | Gejiu Non-Ferrous Metal Processing Co. Ltd.* | |
| Tin | Gejiu Zili Mining And Metallurgy Co., Ltd. | |
| Tin | Huichang Jinshunda Tin Co. Ltd | |
| Tin | Gejiu Kai Meng Industry and Trade LLC | |
| Tin | Linwu Xianggui Smelter Co | |
| Tin | Magnu’s Minerais Metais e Ligas LTDA* | |
| Tin | Malaysia Smelting Corporation (MSC)* | |
| Tin | Melt Metais e Ligas S/A* |
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Exhibit 1.01 Conflict Minerals Report
Metal | Smelter or Refiner Name | |
| Tin | Metallo Chimique* | |
| Tin | Mineração Taboca S.A.* | |
| Tin | Minsur* | |
| Tin | Mitsubishi Materials Corporation* | |
| Tin | Novosibirsk Integrated Tin Works | |
| Tin | O.M. Manufacturing (Thailand) Co., Ltd. | |
| Tin | Operaciones Metalurgical S.A.* | |
| Tin | PT Artha Cipta Langgeng | |
| Tin | PT Babel Inti Perkasa* | |
| Tin | PT Bangka Putra Karya* | |
| Tin | PT Bangka Tin Industry* | |
| Tin | PT Belitung Industri Sejahtera* | |
| Tin | PT Bukit Timah* | |
| Tin | PT DS Jaya Abadi* | |
| Tin | PT Eunindo Usaha Mandiri* | |
| Tin | PT Karimun Mining | |
| Tin | PT Mitra Stania Prima* | |
| Tin | PT Prima Timah Utama* | |
| Tin | PT REFINED BANGKA TIN* | |
| Tin | PT Sariwiguna Binasentosa* | |
| Tin | PT Stanindo Inti Perkasa* | |
| Tin | PT Tambang Timah* | |
| Tin | PT Timah (Persero) Tbk Mentok* | |
| Tin | PT Tinindo Inter Nusa* | |
| Tin | Rui Da Hung | |
| Tin | Soft Metais, Ltda. | |
| Tin | Thaisarco* | |
| Tin | White Solder Metalurgia e Mineração Ltda.* | |
| Tin | Yunnan Chengfeng Non-ferrous Metals Co.,Ltd. | |
| Tungsten | A.L.M.T. TUNGSTEN Corp. | |
| Tungsten | Chongyi Zhangyuan Tungsten Co Ltd | |
| Tungsten | Dayu Weiliang Tungsten Co., Ltd. | |
| Tungsten | Fujian Jinxin Tungsten Co., Ltd. | |
| Tungsten | Ganzhou Huaxing Tungsten Products Co., Ltd.* | |
| Tungsten | Ganzhou Jiangwu Ferrotungsten Co., Ltd.* | |
| Tungsten | Ganzhou Non-ferrous Metals Smelting Co., Ltd. | |
| Tungsten | Ganzhou Seadragon W & Mo Co., Ltd.* | |
| Tungsten | Global Tungsten & Powders Corp.* | |
| Tungsten | Guangdong Xianglu Tungsten Industry Co., Ltd. |
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Exhibit 1.01 Conflict Minerals Report
Metal | Smelter or Refiner Name | |
| Tungsten | HC Starck GmbH | |
| Tungsten | Hunan Chenzhou Mining Group Co | |
| Tungsten | Hunan Chun-Chang Nonferrous Smelting & Concentrating Co., Ltd.* | |
| Tungsten | Japan New Metals Co Ltd* | |
| Tungsten | Jiangxi Gan Bei Tungsten Co., Ltd.* | |
| Tungsten | Jiangxi Minmetals Gao’an Non-ferrous Metals Co., Ltd. | |
| Tungsten | Jiangxi Tonggu Non-ferrous Metallurgical & Chemical Co., Ltd. | |
| Tungsten | Jiangxi Xinsheng Tungsten Industry Co., Ltd.* | |
| Tungsten | Kennametal Fallon | |
| Tungsten | Malipo Haiyu Tungsten Co., Ltd.* | |
| Tungsten | Tejing (Vietnam) Tungsten Co., Ltd. | |
| Tungsten | Vietnam Youngsun Tungsten Industry Co., Ltd* | |
| Tungsten | Wolfram Bergbau und Hütten AG | |
| Tungsten | Wolfram Company CJSC | |
| Tungsten | Xiamen Tungsten (H.C.) Co., Ltd.* | |
| Tungsten | Xiamen Tungsten Co., Ltd* | |
| Tungsten | Xinhai Rendan Shaoguan Tungsten Co., Ltd. | |
| Tungsten | Chenzhou Diamond Tungsten Products Co., Ltd. |
| * | Smelter or refiner that has received a “conflict free” designation from an independent third party audit program as of April 30, 2015. |
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