Exhibit 1.01
Conflict Minerals Report of Tyco International Ltd.
In accord with Rule 13p-1 under the Securities Exchange Act of 1934
This is the Conflict Mineral Report of Tyco International Ltd. (hereinafter referred to as "we," the "Company" or "Tyco") for calendar year 2013 (excepting conflict minerals that, prior to January 31, 2013, were located outside of the supply chain) in accord with Rule 13p-1 under the Securities Exchange Act of 1934 (“Rule 13p-1”).
1. Introduction
Tyco is a leading global provider of security products and services, fire detection and suppression products and services and life safety products. Our broad portfolio of products and services serve security, fire detection and suppression and life safety needs across commercial, industrial, retail, institutional and governmental markets, as well as non-U.S. residential and small business markets. We operate and report financial and operating information in the following three operating segments:
• | North America Installation & Services designs, sells, installs, services and monitors electronic security systems and fire detection and suppression systems for commercial, industrial, retail, institutional and governmental customers in North America. |
• | Rest of World (“ROW”) Installation & Services designs, sells, installs, services and monitors electronic security systems and fire detection and suppression systems for commercial, industrial, retail, residential, small business, institutional and governmental customers in the ROW regions. |
• | Global Products designs, manufactures and sells fire protection, security and life safety products, including intrusion security, anti-theft devices, breathing apparatus and access control and video management systems, for commercial, industrial, retail, residential, small business, institutional and governmental customers worldwide, including products installed and serviced by our NA and ROW Installation & Services segments. |
In accordance with Rule 13p-1, we have concluded that during 2013:
a) | Our Global Products segment manufactured, or contracted to manufacture, certain products for which gold, wolframite, cassiterite, coltan, and/or their derivatives tin, tantalum and tungsten ( collectively “3TG” or “conflict minerals” (as defined in Section 1502(e)(4) of the Dodd-Frank Wall Street Reform and Consumer Protection Act)) are necessary to the functionality or production of such products. |
b) | Based on our reasonable country of origin inquiry and subsequent due diligence, we do not have concrete findings on whether our sourcing practices directly or indirectly funded armed groups in the Democratic Republic of Congo or the countries adjoining it (the “DRC Region”). |
2. Product Description
As noted above, our Global Products segment manufactures (or contracts to manufacture) and sells fire protection, security and life safety products, including intrusion security, anti-theft devices, breathing apparatus and access control and video management system products. We have determined that certain products within these product families contain 3TG that is necessary to the functionality or production of such products (the “in scope product categories”). For our in scope product categories, we conducted a reasonable country of origin inquiry that was reasonably designed to determine the country of origin of the 3TG contained in these products. This inquiry primarily involved contacting the suppliers of components for our in scope product categories through a third-party service provider. We reached out to all such suppliers through various communication channels, including follow-on communications to non-responsive suppliers, and have received responses from 43% of the suppliers contacted. As a result, we are unable to conclusively determine the country of origin of the 3TG used in our products. We have determined that components used in many of our products, in particular intrusion security, access control, video management, nurse call, loss prevention, fire control and fire suppression systems, contain 3TG the source of which is generally unknown, although we have concluded that some of the 3TG used in these products may have been sourced from the DRC Region. These components include capacitors, resistors, wire and cable assemblies, hardware packs, connectors and terminal blocks, keyboards, magnetics and integrated circuits used in our in scope product categories. We have not received any concrete evidence that the 3TG in the components provided by our suppliers that may have been sourced from the DRC Region
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directly or indirectly funded armed groups in the DRC Region. Due to the breadth and complexity of the supply chain for our products, it will take significant time for us and our suppliers to verify the country of origin of the 3TG used in our products.
To the extent that our due diligence efforts were successful in obtaining information on the source of 3TG used in our products, the table below sets forth the smelter or refiner (SOR) or other facility used to process the 3TG contained therein, and the country of origin from which the SORs are believed to source. This information was obtained from suppliers that responded to our due diligence efforts. Such suppliers were requested to use the Electronic Industry Citizenship Coalition (EICC) and Global e-Sustainability Initiative (GeSI) Conflict Minerals Due Diligence Template (EICC-GeSI Template) to identify 3TG SORs and associated countries of origin:
SOR / Facility Name | |
Gold | Conflict-Free Status |
Aida Chemical Industries Co. Ltd. | Unknown |
Allgemeine Gold- und Silberscheideanstalt A.G. | LBMA, RJC, EICC-CFSP |
Almalyk Mining and Metallurgical Complex (AMMC) | LBMA |
AngloGold Ashanti Mineração Ltda | LBMA |
Argor-Heraeus SA | LBMA, RJC, EICC-CFSP |
Asahi Pretec Corporation | LBMA, EICC-CFSP |
Asaka Riken Co Ltd | Unknown |
Atasay Kuyumculuk Sanayi Ve Ticaret A.S. | LBMA |
Aurubis AG | LBMA |
Bangko Sentral ng Pilipinas (Central Bank of the Philippines) | LBMA |
Boliden AB | LBMA |
Caridad | Unknown |
Cendres & Métaux SA | LBMA |
Central Bank of the DPR of Korea | Unknown |
Chimet S.p.A. | LBMA, EICC-CFSP |
Chugai Mining | Unknown |
Codelco | Unknown |
Daejin Indus Co. Ltd | Unknown |
DaeryongENC | Unknown |
Do Sung Corporation | Unknown |
Dowa | EICC-CFSP |
FSE Novosibirsk Refinery | Unknown |
Heimerle + Meule GmbH | EICC-CFSP |
Heraeus Ltd. Hong Kong | LBMA, EICC-CFSP |
Heraeus Precious Metals GmbH & Co. KG | LBMA, EICC-CFSP |
Hunan Chenzhou Mining Group Co., Ltd | Unknown |
Hwasung CJ Co. Ltd | Unknown |
Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited | LBMA |
Ishifuku Metal Industry Co., Ltd. | LBMA, EICC-CFSP |
Istanbul Gold Refinery | LBMA, EICC-CFSP |
Japan Mint | LBMA |
Jiangxi Copper Company Limited | LBMA |
Johnson Matthey Inc | LBMA, EICC-CFSP |
Johnson Matthey Limited | EICC-CFSP |
JSC Ekaterinburg Non-Ferrous Metal Processing Plant | LBMA |
JSC Uralectromed | LBMA |
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JX Nippon Mining & Metals Co., Ltd | LBMA, EICC-CFSP |
Kazzinc Ltd | LBMA |
Kennecott Utah Copper LLC | LBMA, EICC-CFSP |
Kojima Chemicals Co., Ltd | EICC-CFSP |
Korea Metal Co. Ltd | Unknown |
Kyrgyzaltyn JSC | LBMA |
L' azurde Company For Jewelry | Unknown |
LS-Nikko Copper Inc | LBMA, EICC-CFSP |
Materion | EICC-CFSP |
Matsuda Sangyo Co., Ltd. | LBMA, EICC-CFSP |
Met-Mex Peñoles, S.A. | Unknown |
Metalor Technologies (Hong Kong) Ltd | LBMA, EICC-CFSP |
Metalor Technologies SA | LBMA, RJC, EICC-CFSP |
Metalor USA Refining Corporation | LBMA, EICC-CFSP |
Mitsubishi Materials Corporation | LBMA, EICC-CFSP |
Mitsui Mining and Smelting Co., Ltd. | EICC-CFSP, LBMA |
Moscow Special Alloys Processing Plant | LBMA |
Nadir Metal Rafineri San. Ve Tic. A.ª. | LBMA |
Navoi Mining and Metallurgical Combinat | LBMA |
Nihon Material Co. LTD | LBMA, EICC-CFSP |
Ohio Precious Metals LLC. | LBMA, EICC-CFSP |
OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastvetmet) | Unknown |
OJSC Kolyma Refinery | LBMA |
PAMP SA | LBMA, RJC, EICC-CFSP |
Pan Pacific Copper Co. LTD | Unknown |
Prioksky Plant of Non-Ferrous Metals | LBMA |
PT Aneka Tambang (Persero) Tbk | LBMA |
PT Timah | Unknown |
PX Précinox SA | LBMA, RJC |
Rand Refinery (Pty) Ltd | LBMA, RJC, EICC-CFSP |
Royal Canadian Mint | LBMA, EICC-CFSP |
Sabin Metal Corp. | Unknown |
SAMWON METALS Corp. | Unknown |
Schöne Edelmetaal B.V. | LBMA |
SEMPSA Joyería Platería SA | LBMA, EICC-CFSP |
Shandong Zhaojin Gold & Silver Refinery Co. Ltd | LBMA |
SOE Shyolkovsky Factory of Secondary Precious Metals | LBMA |
Solar Applied Materials Technology Corp. | LBMA, EICC-CFSP |
Sumitomo Metal Mining Co. Ltd. | LBMA, EICC-CFSP |
Suzhou Xingrui Noble | Unknown |
Tanaka Kikinzoku Kogyo K.K. | LBMA, EICC-CFSP |
The Great Wall Gold and Silver Refinery of China | Unknown |
The Refinery of Shandong Gold Mining Co. Ltd | LBMA |
Tokuriki Honten Co. Ltd | LBMA, EICC-CFSP |
Torecom | Unknown |
Umicore Brasil Ltda | LBMA |
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Umicore SA Business Unit Precious Metals Refining | LBMA, EICC-CFSP |
United Precious Metal Refining, Inc. | EICC-CFSP |
Valcambi SA | LBMA, RJC, EICC-CFSP |
Western Australian Mint trading as The Perth Mint | LBMA, EICC-CFSP |
Xstrata Canada Corporation | LBMA, EICC-CFSP |
Yokohama Metal Co Ltd | Unknown |
Zhongyuan Gold Smelter of Zhongjin Gold Corporation | LBMA |
Zijin Mining Group Co. Ltd | LBMA |
Tin | |
CNMC (Guangxi) PGMA Co. Ltd. | Unknown |
Cookson | Unknown |
Cooper Santa | Unknown |
CV Duta Putra Bangka | Unknown |
CV Gita Pesona | Unknown |
CV JusTindo | Unknown |
CV Makmur Jaya | Unknown |
CV Nurjanah | Unknown |
CV Prima Timah Utama | Unknown |
CV Serumpun Sebalai | Unknown |
CV United Smelting | Unknown |
EM Vinto | Unknown |
Fenix Metals | Unknown |
Gejiu Non-Ferrous Metal Processing Co. Ltd. | EICC-CFSP |
Gejiu Zi-Li | Unknown |
Gold Bell Group | Unknown |
Huichang Jinshunda Tin Co. Ltd | Unknown |
Jiangxi Nanshan | Unknown |
Kai Unita Trade Limited Liability Company | Unknown |
Linwu Xianggui Smelter Co | Unknown |
Liuzhou China Tin | Unknown |
Malaysia Smelting Corporation (MSC) | EICC-CFSP |
Metallo Chimique | Unknown |
Mineração Taboca S.A. | EICC-CFSP |
Minmetals Ganzhou Tin Co. Ltd. | Unknown |
Minsur | EICC-CFSP |
Mitsubishi Materials Corporation | EICC-CFSP |
Novosibirsk Integrated Tin Works | Unknown |
OMSA | EICC-CFSP |
PT Alam Lestari Kencana | Unknown |
PT Artha Cipta Langgeng | Unknown |
PT Babel Inti Perkasa | Unknown |
PT Babel Surya Alam Lestari | Unknown |
PT Bangka Kudai Tin | Unknown |
PT Bangka Putra Karya | Unknown |
PT Bangka Timah Utama Sejahtera | Unknown |
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PT Bangka Tin Industry | Unknown |
PT Belitung Industri Sejahtera | Unknown |
PT BilliTin Makmur Lestari | Unknown |
PT Bukit Timah | EICC-CFSP |
PT DS Jaya Abadi | Unknown |
PT Eunindo Usaha Mandiri | Unknown |
PT Fang Di MulTindo | Unknown |
PT HP Metals Indonesia | Unknown |
PT Karimun Mining | Unknown |
PT Koba Tin | Unknown |
PT Mitra Stania Prima | Unknown |
PT Panca Mega | Unknown |
PT Refined Banka Tin | Unknown |
PT Sariwiguna Binasentosa | Unknown |
PT Seirama Tin investment | Unknown |
PT Stanindo Inti Perkasa | Unknown |
PT Sumber Jaya Indah | Unknown |
PT Tambang Timah | EICC-CFSP |
PT Timah | EICC-CFSP |
PT Timah Nusantara | Unknown |
PT Tinindo Inter Nusa | Unknown |
PT Tommy Utama | Unknown |
PT Yinchendo Mining Industry | Unknown |
Thaisarco | EICC-CFSP |
White Solder Metalurgia | EICC-CFSP |
Yunnan Chengfeng | Unknown |
Yunnan Tin Company Limited | EICC-CFSP |
Tungsten | |
A.L.M.T. Corp. | TI-CMC |
ATI Tungsten Materials | Unknown |
Chaozhou Xianglu Tungsten Industry Co Ltd | Unknown |
China Minmetals Nonferrous Metals Co Ltd | Unknown |
Chongyi Zhangyuan Tungsten Co Ltd | Unknown |
Dayu Weiliang Tungsten Co., Ltd. | Unknown |
Fujian Jinxin Tungsten Co., Ltd. | TI-CMC |
Ganzhou Grand Sea W&Mo Group Co., Ltd | TI-CMC |
Global Tungsten & Powders Corp | TI-CMC, EICC-CFSP |
HC Starck GmbH | TI-CMC |
Hunan Chenzhou Mining Group Co., Ltd | TI-CMC |
Hunan Chun-Chang Nonferrous Smelting & Concentrating Co., Ltd. | Unknown |
Japan New Metals Co Ltd | Unknown |
Jiangxi Rare Earth & Rare Metals Tungsten Group Corp | Unknown |
Jiangxi Tungsten Industry Group Co Ltd | Unknown |
Kennametal Inc. | TI-CMC |
Materion | Unknown |
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Minmetals Ganzhou Tin Co. Ltd. | Unknown |
Tejing (Vietnam) Tungsten Co Ltd | TI-CMC |
Wolfram Bergbau und Hütten AG | TI-CMC |
Wolfram Company CJSC | TI-CMC |
Xiamen Tungsten Co Ltd | TI-CMC |
Xinhai Rendan Shaoguan Tungsten Co., Ltd. | Unknown |
Zhuzhou Cemented Carbide Group Co Ltd | Unknown |
Tantalum | |
Conghua Tantalum and Niobium Smeltry | EICC-CFSP |
Duoluoshan | EICC-CFSP |
Exotech Inc. | EICC-CFSP |
F&X Electro-Materials Ltd | EICC-CFSP |
Gannon & Scott | Unknown |
Global Advanced Metals | EICC-CFSP |
H.C. Starck GmbH | Unknown |
Hi-Temp | EICC-CFSP |
JiuJiang JinXin Nonferrous Metals Co., Ltd. | EICC-CFSP |
JiuJiang Tambre Co. Ltd. | EICC-CFSP |
Kemet Blue Powder | EICC-CFSP |
King-Tan Tantalum Industry Ltd | Unknown |
LMS Brasil S.A. | Unknown |
Mitsui Mining & Smelting | EICC-CFSP |
Molycorp Silmet | EICC-CFSP |
Ningxia Orient Tantalum Industry Co., Ltd. | EICC-CFSP |
Plansee | EICC-CFSP |
QuantumClean | EICC-CFSP |
RFH | Unknown |
Solikamsk Metal Works | EICC-CFSP |
Taki Chemicals | EICC-CFSP |
Tantalite Resources | EICC-CFSP |
Telex | EICC-CFSP |
Ulba | EICC-CFSP |
Zhuzhou Cement Carbide | EICC-CFSP |
*Accreditation:
EICC-CFSP = Electronic Industry Citizenship Coalition-Conflict Free Smelter Program
LBMA = London Bullion Market Association
RJC = Responsible Jewelry Council
TI-CMC = Tungsten Industry-Conflict Minerals Council
Countries of Origin for these SORs are believed to include: Argentina, Australia, Austria, Bolivia, Brazil, Burundi, Canada, Chile, China, DRC-(Congo), Ethiopia, Ghana, Guinea, Indonesia, Japan, Kazakhstan, Kyrgyzstan, Laos, Malaysia, Mali, Mexico, Mongolia, Mozambique, Namibia, Nigeria, Papua New Guinea, Peru, Philippines, Portugal, Russia, Rwanda, South Africa, South Korea, Spain, Sweden, Taiwan, Tajikistan, Tanzania, Thailand, United Kingdom, United States, Uzbekistan, Zambia |
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3. Description of Due Diligence Measures
The Company’s due diligence process is based on the Organization for Economic Cooperation and Development’s (OECD’s) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Second Edition, and accompanying Supplements. It is important to note that the OECD Guidance was written for both upstream and downstream companies in the supply chain. As Tyco is a downstream company in the supply chain, our due diligence practices were tailored accordingly. Due diligence measures undertaken by the Company included the following:
• | Development of a conflict minerals policy. We have implemented additional contractual provisions in all newly executed master supply agreements that require our suppliers to comply with conflict mineral provision. These provisions require suppliers to certify that any 3TG in components supplied to Tyco either (i) was not sourced from the DRC or adjoining countries, or (ii) if it was, that such 3TG did not directly or indirectly fund armed groups in the DRC or adjoining countries. |
In addition, Tyco intends to update its Guide to Supplier Social Responsibility with conflict minerals related provisions that will include requirements that suppliers:
◦ | Develop policies and processes aimed toward preventing the use of conflict minerals or derivative metals necessary to the functionality or production of their products that finance or benefit armed groups in the DRC or adjoining countries; and |
◦ | Not knowingly procure conflict minerals that originate from facilities in the DRC or adjoining countries that are not certified as “conflict free” |
• | Assembled an internal team to support supply chain due diligence. An internal team led by the Global Sourcing & Procurement function and including members of the legal department and the Engineering and Operation Excellence departments of each of the business units within the Global Products segment was assembled to advance and implement the supply chain review required by the rule. |
• | Established a system of controls and transparency over the mineral supply chain. The internal team created and implemented procedures to review all product categories to determine, based primarily on reviewing bills of material, whether the product category contained, or was likely to contain, 3TG. Based on this review, suppliers were contacted and asked to complete the EICC-GeSI Template to report on the status of 3TG in the products they supplied to Tyco. |
• | Implement measures taken to strengthen company engagement with suppliers. Tyco engaged a third party service provider (Source Intelligence) to assist in the outreach effort to suppliers, to track and analyze responses, and to perform multiple follow up efforts for suppliers that were unresponsive. As part of this effort Tyco’s tier 1 suppliers were engaged to collect information regarding the presence and sourcing of 3TG used in the products supplied to Tyco. Information was collected and stored using an online platform provided by the third party service provider. |
Supplier engagement followed these steps:
◦ | An introductory email was sent to tier 1 suppliers describing the compliance requirements and requesting conflict minerals information; |
◦ | Following the initial introductions to the program and information request, at least 3 reminder emails were sent to each non-responsive supplier requesting survey completion; |
◦ | Suppliers who remained non-responsive to these email reminders were contacted by phone and offered assistance. This assistance included, but was not limited to, further information about the Tyco’s conflict minerals compliance program, an explanation of why the information was being collected, a review of how the information would be used and clarification regarding how the information needed could be provided. |
An escalation process was initiated with Tyco for suppliers who continued to be non-responsive after the contacts described above were made. As noted above, the program utilized the EICC-GeSI Template for data collection.
◦ | Supplier responses were evaluated for plausibility, consistency, and gaps both in terms of which products were stated to contain or not contain necessary 3TG, as well as the origin of those materials. Additional supplier contacts were conducted to address issues including implausible statements regarding no presence of 3TG, incomplete data on EICC-GeSI reporting templates, responses that did not identify smelters or refiners, responses |
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which indicated sourcing location without complete supporting information from the supply chain, and organizations that were identified as smelter or refiners, but not verified as such through further analysis and research.
• | Identify the Smelters or Refiners (SORs) in the supply chain. As a result of Tyco’s outreach efforts and as reported above, Tyco was able to identify SORs within its supply chain for those suppliers who affirmatively responded to outreach efforts. |
• | Documentation Processes. Tyco has established its due diligence compliance program and is in the process of documenting and formalizing a record maintenance mechanism to ensure the diligence procedures are sustainable. |
• | Report findings to senior management. Included in the process established by the internal team is routine reporting to senior management of the progress of the supply chain due diligence, including periodic reporting to the Audit Committee of the Board of Directors. |
• | Report Annually on Supply Chain Due Diligence. The Form SD and CMR contained herein and publicly available at www.tyco.com. |
5. Steps to Improve Due Diligence
Tyco will endeavor to continuously improve upon its supply chain due diligence efforts via the following measures:
• | Update and implement its Guide to Supplier Social Responsibility with conflict minerals related provisions |
• | Continue to assess the presence of 3TG in its supply chain; |
• | Clearly communicate expectations with regard to supplier performance, transparency and sourcing; |
• | Increase the response rate for its reasonable country of origin and due diligence processes |
• | Continue to compare supplier outreach results to information collected via independent conflict free smelter validation programs such as the EICC/GeSI Conflict Free Smelter program; |
• | Contact smelters identified as a result of the supplier outreach process and request their participation in obtaining a “conflict free” designation from an industry program such as the EICC/GeSI Conflict Free Smelter program; |
• | Implement a risk management plan, monitor and track risk mitigation, report to senior management and evaluate supplier relationships; |
• | Undertake additional fact and risk assessments for risks requiring mitigation, or after a change of circumstances; and |
• | Carry out independent third-party audit of SOR due diligence if deemed necessary. |
6. Independent Private Sector Audit
An independent private sector audit is not required at this time and has not been conducted.
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