EXHIBIT 1.01
DORMAN PRODUCTS, INC.
Conflict Minerals Report
Explanatory Note
This Conflict Minerals Report (the “Report”) of Dorman Products, Inc. (the “Company,” “Dorman,” “we,” “us,” or “our”) has been prepared pursuant to Rule 13p-1 and Form SD (the “Rule”) promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period January 1, 2019 to December 31, 2019 (the “Reporting Period”).
The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products and the minerals specified in the Rule are necessary to the functionality or production of those products. The specified minerals, which are collectively referred to in this report as “Conflict Minerals,” are gold, columbite-tantalite (coltan), cassiterite and wolframite, including their derivatives, which are limited to metallic forms of tantalum, tin and tungsten. The “Covered Countries” for the purposes of the Rule and this Report are the Democratic Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola.
Company and the Product Overview
I. | Introduction |
The Company is one of the leading suppliers of replacement parts and fasteners for passenger cars, light trucks, and heavy duty trucks in the automotive aftermarket industry. During calendar year 2019, many of our products were manufactured in third party vendor facilities (referred to hereafter as “contract manufacturers”) and certain of our products were manufactured or remanufactured by the Company. This Report relates to products (i) for which Conflict Minerals are necessary to the functionality or production of those products, (ii) that were manufactured, remanufactured or contracted for manufacture by Dorman, and (iii) for which the manufacture was completed during calendar year 2019 (the “Covered Products”). The Covered Products include products in the following product categories:
| • | Power-train products which includes intake and exhaust manifolds, cooling products, harmonic balancers, fluid lines, fluid reservoirs, connectors, four-wheel drive components and axles, drain plugs, and other engine, transmission and axle components. |
| • | Chassis products which includes control arms, brake hardware and hydraulics, wheel and axle hardware, suspension arms, knuckles, links, bushings, and other suspension, steering and brake components. |
| • | Automotive body products which includes door handles and hinges, window lift motors, window regulators, switches and handles, wiper components, lighting, electrical, and other interior and exterior automotive body components. |
| • | Hardware products which includes threaded bolts, auto body and home fasteners, automotive and home electrical wiring components, and other hardware assortments and merchandise. |
Certain products we sell contain parts that can be recycled, or as more commonly referred to in our industry, remanufactured. We refer to the used product that is ultimately remanufactured as core. A used core is remanufactured and sold to the customer as a replacement for a unit on a vehicle. Customers and end-users that purchase remanufactured products will generally return the used core to us, which we then use in the remanufacturing process to make another finished good. Our core inventory consists of used cores purchased from brokers and salvage yards and held in our facilities, used cores that are in the process of being returned from our customers and end-users, and remanufactured cores held in finished goods inventory at our facilities. To the extent such cores contain Conflict Minerals, the Conflict Minerals are from scrap/recycled sources, and therefore, no further due diligence is required. To the extent the various additional components, parts or raw materials used to modify the cores contain Conflict Minerals, we rely on our vendors of such additional components, parts or raw materials regarding the origin of the Conflict Minerals that are included in such Covered Products.
We do not purchase Conflict Minerals directly from mines or smelters/refiners. The Company’s supply chain with respect to the Covered Products is complex and, often times, there are many parties in the supply chain between the Company and the original source of the Conflict Minerals. Therefore, the Company must rely on its supply chain to provide information regarding the origin of the Conflict Minerals that are included in such Covered Products. We believe that the smelters/refiners of the Conflict Minerals are best suited to identify the sources of such minerals, and we have requested that our vendors take steps to identify the applicable smelters/refiners of the Conflict Minerals in our supply chain.
The Company conducted a good faith Reasonable Country of Origin Inquiry (“RCOI”) with respect to the Conflict Minerals included in the Covered Products. Such RCOI was reasonably designed to determine whether any of the Conflict Minerals included in the Covered Products may have originated in the Covered Countries and whether any of the Conflict Minerals may be from scrap or recycled sources.
We began this year’s RCOI by using internal product expertise to update our list of products that we manufacture, remanufacture or contract to manufacture which may contain Conflict Minerals. We then identified the names of our largest forty (40) vendors that accounted for 90% of dollars spent on (i) Covered Products contracted for manufacture by Dorman, and (ii) Conflict Minerals used in the manufacture and remanufacture of Covered Products by Dorman. Once identified, we sent each such vendor a Conflict Minerals reporting template (described below) and a letter with instructions on how to complete the reporting template. We have adopted the Conflict Minerals Reporting Template (the “Template”) developed by the Responsible Minerals Initiative, formerly the Electronic Industry Citizenship Coalition and the Global e-Sustainability Initiative, as a standard questionnaire for conducting inquiries into our vendors’ sources of metals. This Template was created as a common means for the collection of sourcing information related to Conflict Minerals. As a part of this process, we provided assistance to vendors about the specifics of the Rule and the information requested by the Template, including the types of evidence/documents that vendors could use to find/back-up their answers in the Template.
In completing the Template, vendors were asked, among other questions, whether the products or components they supplied to us or manufactured for us contained Conflict Minerals; the origin of such Conflict Minerals; to identify the sources of Conflict Minerals from their lower tier level suppliers; to determine the smelter/refiner or mine origin or whether the Conflict Minerals were sourced from scrap or recycled sources. The vendors were asked to return a copy of the Template once completed. Upon return of the Template, responses from vendors were evaluated for completeness, consistency, plausibility, and gaps in information. If information on a Template returned from a vendor appeared to be incomplete, incorrect, or not trustworthy, our purchasing team returned the Template to the vendor with a request to complete or correct the questionable information. We received completed Templates from thirty-five (35) of the forty (40) vendors solicited, accounting for approximately 78% of dollars spent on (i) Covered Products contracted for manufacture by Dorman, and (ii) Conflict Minerals used in the manufacture and remanufacture of Covered Products by Dorman.
Through our RCOI, some of our vendors disclosed to us that scrap/recycled sources of Conflict Minerals were identified in their supply chains and did not require due diligence. After reviewing the balance of the results of our RCOI and comparing the smelters/refiners identified in the supply-chain survey against verified lists produced by the Responsible Minerals Initiative (“RMI”), we determined that we had reason to believe that some of the Conflict Minerals necessary for the functionality of our Covered Products may have originated in a Covered Country. Therefore, we determined that the Rule required that we exercise due diligence on the source and chain of custody of such Conflict Minerals.
We designed our due diligence framework to conform in all material respects with the OECD (2016) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Third Edition.
IV. | Due Diligence Measures Performed by the Company |
The due diligence measures that we performed for Covered Products included, but were not limited to, the following:
| • | Maintaining a multi-disciplinary internal team to implement our Conflict Minerals due diligence measures. Our Conflict Minerals project team is headed by our Senior Vice President, Supply Chain and includes members from our supply chain, engineering, quality, finance and legal departments. The team met at least twice during the Reporting Period to discuss the due diligence process and progress. |
| • | Communicating our Conflict Minerals Policy Statement (the “Conflict Minerals Policy”) to our vendors. A copy of the Company’s Conflict Minerals Policy is available at www.dormanproducts.com; however, the contents of that site are not incorporated by reference into, and are not otherwise a part of, this Form SD. |
| • | Maintaining a database which was internally developed to store our supply chain Conflict Minerals records, including all returned Templates. |
| • | Including contractual provisions in our standard form of vendor agreements requiring applicable vendors to abide by the terms of the Company’s Conflict Mineral Policy. |
| • | Reporting to senior management on vendors’ responses to our Conflict Minerals information requests. |
| • | Using a third party service, comparing smelters/refiners identified by vendors to the RMI lists of validated conflict free facilities. |
Appendix A contains a list of known smelters/refiners reported by the Company’s vendors which have been determined to be legitimate mineral processing operations and may have been used to process the Conflict Minerals utilized in the Covered Products. Based on the information obtained pursuant to the due diligence process, the Company does not have sufficient information with respect to products or components supplied to it or manufactured for it to determine the country of origin of the Conflict Minerals in all Covered Products. At the same time, to the extent that vendors supplied information, the Company received no information from its vendors indicating that the Conflict Minerals in the Company’s Covered Products directly or indirectly financed or benefitted armed groups in the Covered Countries. In some cases, information was provided to us for the entire supply chain of a vendor and was not necessarily limited to facilities that have been confirmed to contribute necessary Conflict Minerals to a Covered Product. Accordingly, we have been unable to definitely link the identified smelters/refiners to only those products/materials in our supply chain; therefore, our smelter/refiner list likely contains more processing facilities than are actually in our supply chain or Covered Products. However, based on the information that was obtained, the Company has reasonably determined that countries of origin of the Conflict Minerals may include the countries listed within Appendix A.
We are a downstream purchaser of Conflict Minerals. Accordingly, the efforts we have undertaken to identify the source and chain of custody of the Conflict Minerals in our Covered Products reflect our circumstances and position in the supply chain. As a result, our inquiry can provide only reasonable, not absolute, assurance regarding the source and chain of custody of the Conflict Minerals necessary to the functionality of the Covered Products. Our process relies on data obtained directly from our vendors who seek similar information within their supply chain to identify the original sources of the necessary Conflict Minerals. Such sources of information may yield inaccurate or incomplete information.
V. | Steps to Further Mitigate Risk and Improve Due Diligence in 2020 |
The Company expects to take the following steps, among others, to improve its due diligence measures and to further mitigate the risk that the necessary Conflict Minerals contained in the Company’s products finance or benefit armed groups in the Covered Countries:
| • | the Company will continue to engage with vendors in its supply chain to improve the completeness and accuracy of information provided to the Company, including encouraging such vendors to provide product level information to improve the accuracy of information provided to the Company; |
| • | the Company will continue to monitor changes in vendor circumstances that may impact their compliance with the Company’s Conflict Minerals Policy, and in turn may impact the Company’s continued engagement of and relationship with certain vendors; |
| • | the Company will continue to review new vendors for compliance with the Company’s Conflict Minerals Policy during the initial business review of each new vendor; |
| • | the Company will continue to encourage its vendors to take similar measures with their suppliers to ensure alignment with the Company’s sourcing philosophy throughout the supply chain; and |
| • | the Company will continue to encourage its vendors to have only verified “conflict free” sources. |
SMELTERS/REFINERS
Set forth below are known smelters/refiners reported by the Company’s vendors which may have been used to process the Conflict Minerals utilized in the Covered Products manufactured in calendar year 2019 (“Vendor-Reported Legitimate Facilities”). Table 1 consists of the Vendor-Reported Legitimate Facilities for which we were able to obtain country of origin information. Table 2 consists of the Vendor-Reported Legitimate Facilities for which we were unable to obtain country of origin information.
We identified country of origin information for the following Vendor-Reported Legitimate Facilities that achieved during 2019 a Conflict Free designation by the Responsible Minerals Initiative (RMI) or an audit program with which RMI has mutual recognition.
Metal | Official Smelter Name |
Gold | Advanced Chemical Company |
Gold | Aida Chemical Industries Co., Ltd. |
Gold | Al Etihad Gold Refinery DMCC |
Gold | Allgemeine Gold-und Silberscheideanstalt A.G. |
Gold | Almalyk Mining and Metallurgical Complex (AMMC) |
Gold | AngloGold Ashanti Corrego do Sitio Mineracao |
Gold | Argor-Heraeus S.A. |
Gold | Asahi Pretec Corp. |
Gold | Asahi Refining Canada Ltd. |
Gold | Asahi Refining USA Inc. |
Gold | Asaka Riken Co., Ltd. |
Gold | Aurubis AG |
Gold | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) |
Gold | Boliden AB |
Gold | C. Hafner GmbH + Co. KG |
Gold | CCR Refinery - Glencore Canada Corporation |
Gold | Cendres + Metaux S.A. |
Gold | Chimet S.p.A. |
Gold | DODUCO Contacts and Refining GmbH |
Gold | Dowa |
Gold | DSC (Do Sung Corporation) |
Gold | Eco-System Recycling Co., Ltd. East Plant |
Gold | Emirates Gold DMCC |
Gold | Geib Refining Corporation |
Gold | Gold Refinery of Zijin Mining Group Co., Ltd. |
Gold | Heimerle + Meule GmbH |
Gold | Heraeus Metals Hong Kong Ltd. |
Gold | Heraeus Precious Metals GmbH & Co. KG |
Gold | Inner Mongolia Qiankun Gold and Silver Refinery Share Co., Ltd. |
Gold | Ishifuku Metal Industry Co., Ltd. |
Gold | Istanbul Gold Refinery |
Gold | Japan Mint |
Gold | Jiangxi Copper Co., Ltd. |
Gold | JSC Uralelectromed |
Gold | JX Nippon Mining & Metals Co., Ltd. |
Gold | Kazzinc |
Gold | Kennecott Utah Copper LLC |
Gold | Kojima Chemicals Co., Ltd. |
Gold | Kyrgyzaltyn JSC |
Gold | LS-NIKKO Copper Inc. |
Gold | LT Metal Ltd. |
Gold | Materion |
Gold | Matsuda Sangyo Co., Ltd. |
Gold | Metalor Technologies (Hong Kong) Ltd. |
Gold | Metalor Technologies (Singapore) Pte., Ltd. |
Gold | Metalor Technologies (Suzhou) Ltd. |
Gold | Metalor Technologies S.A. |
Gold | Metalor USA Refining Corporation |
Gold | Metalurgica Met-Mex Penoles S.A. De C.V. |
Gold | Mitsubishi Materials Corporation |
Gold | Mitsui Mining and Smelting Co., Ltd. |
Gold | MMTC-PAMP India Pvt., Ltd. |
Gold | Moscow Special Alloys Processing Plant |
Gold | Nadir Metal Rafineri San. Ve Tic. A.S. |
Gold | Nihon Material Co., Ltd. |
Gold | Ohura Precious Metal Industry Co., Ltd. |
Gold | OJSC "The Gulidov Krasnoyarsk Non-Ferrous Metals Plant" (OJSC Krastsvetmet) |
Gold | OJSC Novosibirsk Refinery |
Gold | PAMP S.A. |
Gold | Prioksky Plant of Non-Ferrous Metals |
Gold | PT Aneka Tambang (Persero) Tbk |
Gold | PX Precinox S.A. |
Gold | Rand Refinery (Pty) Ltd. |
Gold | Royal Canadian Mint |
Gold | Samduck Precious Metals |
Gold | SEMPSA Joyeria Plateria S.A. |
Gold | Shandong Zhaojin Gold & Silver Refinery Co., Ltd. |
Gold | Sichuan Tianze Precious Metals Co., Ltd. |
Gold | Singway Technology Co., Ltd. |
Gold | SOE Shyolkovsky Factory of Secondary Precious Metals |
Gold | Solar Applied Materials Technology Corp. |
Gold | Sumitomo Metal Mining Co., Ltd. |
Gold | Tanaka Kikinzoku Kogyo K.K. |
Gold | The Refinery of Shandong Gold Mining Co., Ltd. |
Gold | Tokuriki Honten Co., Ltd. |
Gold | Torecom |
Gold | Umicore Brasil Ltda. |
Gold | Umicore Precious Metals Thailand |
Gold | Umicore S.A. Business Unit Precious Metals Refining |
Gold | United Precious Metal Refining, Inc. |
Gold | Valcambi S.A. |
Gold | Western Australian Mint (T/a The Perth Mint) |
Gold | Yamakin Co., Ltd. |
Gold | Yokohama Metal Co., Ltd. |
Gold | Zhongyuan Gold Smelter of Zhongjin Gold Corporation |
Tantalum | Asaka Riken Co., Ltd. |
Tantalum | Changsha South Tantalum Niobium Co., Ltd. |
Tantalum | D Block Metals, LLC |
Tantalum | Exotech Inc. |
Tantalum | F&X Electro-Materials Ltd. |
Tantalum | FIR Metals & Resource Ltd. |
Tantalum | Global Advanced Metals Aizu |
Tantalum | Global Advanced Metals Boyertown |
Tantalum | Guangdong Rising Rare Metals-EO Materials Ltd.* |
Tantalum | Guangdong Zhiyuan New Material Co., Ltd. |
Tantalum | H.C. Starck Co., Ltd. |
Tantalum | H.C. Starck Hermsdorf GmbH |
Tantalum | H.C. Starck Inc. |
Tantalum | H.C. Starck Ltd. |
Tantalum | H.C. Starck Smelting GmbH & Co. KG |
Tantalum | H.C. Starck Tantalum and Niobium GmbH |
Tantalum | Hengyang King Xing Lifeng New Materials Co., Ltd. |
Tantalum | Jiangxi Dinghai Tantalum & Niobium Co., Ltd. |
Tantalum | JiuJiang JinXin Nonferrous Metals Co., Ltd. |
Tantalum | Jiujiang Tanbre Co., Ltd. |
Tantalum | Jiujiang Zhongao Tantalum & Niobium Co., Ltd. |
Tantalum | KEMET Blue Metals |
Tantalum | KEMET Blue Powder* |
Tantalum | LSM Brasil S.A. |
Tantalum | Metallurgical Products India Pvt., Ltd. |
Tantalum | Mineracao Taboca S.A. |
Tantalum | Mitsui Mining and Smelting Co., Ltd. |
Tantalum | Ningxia Orient Tantalum Industry Co., Ltd. |
Tantalum | NPM Silmet AS |
Tantalum | QuantumClean |
Tantalum | Solikamsk Magnesium Works OAO |
Tantalum | Taki Chemical Co., Ltd. |
Tantalum | Telex Metals |
Tantalum | Ulba Metallurgical Plant JSC |
Tantalum | XinXing Haorong Electronic Material Co., Ltd. |
Tantalum | Yanling Jincheng Tantalum & Niobium Co., Ltd. |
Tin | Alpha |
Tin | Chenzhou Yunxiang Mining and Metallurgy Co., Ltd. |
Tin | China Tin Group Co., Ltd. |
Tin | CV Gita Pesona* |
Tin | CV United Smelting* |
Tin | CV Venus Inti Perkasa* |
Tin | Dowa |
Tin | EM Vinto |
Tin | Fenix Metals |
Tin | Gejiu Kai Meng Industry and Trade LLC |
Tin | Gejiu Non-Ferrous Metal Processing Co., Ltd. |
Tin | Gejiu Yunxin Nonferrous Electrolysis Co., Ltd. |
Tin | Huichang Jinshunda Tin Co., Ltd. |
Tin | Jiangxi New Nanshan Technology Ltd. |
Tin | Magnu's Minerais Metais e Ligas Ltda. |
Tin | Malaysia Smelting Corporation (MSC) |
Tin | Melt Metais e Ligas S.A. |
Tin | Metallic Resources, Inc. |
Tin | Mineracao Taboca S.A. |
Tin | Minsur |
Tin | Mitsubishi Materials Corporation |
Tin | O.M. Manufacturing (Thailand) Co., Ltd. |
Tin | O.M. Manufacturing Philippines, Inc. |
Tin | Operaciones Metalurgicas S.A. |
Tin | PT Aries Kencana Sejahtera* |
Tin | PT Artha Cipta Langgeng |
Tin | PT ATD Makmur Mandiri Jaya |
Tin | PT Babel Inti Perkasa* |
Tin | PT Bangka Tin Industry* |
Tin | PT Belitung Industri Sejahtera* |
Tin | PT Bukit Timah* |
Tin | PT DS Jaya Abadi* |
Tin | PT Inti Stania Prima* |
Tin | PT Karimun Mining* |
Tin | PT Mitra Stania Prima |
Tin | PT Panca Mega Persada* |
Tin | PT Premium Tin Indonesia* |
Tin | PT Prima Timah Utama* |
Tin | PT Refined Bangka Tin |
Tin | PT Sariwiguna Binasentosa* |
Tin | PT Stanindo Inti Perkasa* |
Tin | PT Sumber Jaya Indah* |
Tin | PT Timah Tbk Kundur |
Tin | PT Timah Tbk Mentok |
Tin | PT Tinindo Inter Nusa* |
Tin | PT Tommy Utama* |
Tin | Rui Da Hung |
Tin | Soft Metais Ltda. |
Tin | Thaisarco |
Tin | White Solder Metalurgia e Mineracao Ltda. |
Tin | Yunnan Chengfeng Non-ferrous Metals Co., Ltd. |
Tin | Yunnan Tin Company Limited |
Tungsten | Chenzhou Diamond Tungsten Products Co., Ltd. |
Tungsten | Chongyi Zhangyuan Tungsten Co., Ltd. |
Tungsten | Fujian Jinxin Tungsten Co., Ltd. |
Tungsten | Ganzhou Huaxing Tungsten Products Co., Ltd. |
Tungsten | Ganzhou Jiangwu Ferrotungsten Co., Ltd. |
Tungsten | Ganzhou Seadragon W & Mo Co., Ltd. |
Tungsten | Global Tungsten & Powders Corp. |
Tungsten | Guangdong Xianglu Tungsten Co., Ltd. |
Tungsten | H.C. Starck Smelting GmbH & Co. KG |
Tungsten | H.C. Starck Tungsten GmbH |
Tungsten | Hunan Chenzhou Mining Co., Ltd. |
Tungsten | Hunan Chunchang Nonferrous Metals Co., Ltd. |
Tungsten | Japan New Metals Co., Ltd. |
Tungsten | Jiangwu H.C. Starck Tungsten Products Co., Ltd. |
Tungsten | Jiangxi Gan Bei Tungsten Co., Ltd. |
Tungsten | Jiangxi Tonggu Non-ferrous Metallurgical & Chemical Co., Ltd. |
Tungsten | Jiangxi Xinsheng Tungsten Industry Co., Ltd. |
Tungsten | Jiangxi Yaosheng Tungsten Co., Ltd. |
Tungsten | Kennametal Fallon |
Tungsten | Kennametal Huntsville |
Tungsten | Malipo Haiyu Tungsten Co., Ltd. |
Tungsten | Masan Tungsten Chemical LLC (MTC) |
Tungsten | Tejing (Vietnam) Tungsten Co., Ltd. |
Tungsten | Wolfram Bergbau und Hutten AG |
Tungsten | Xiamen Tungsten (H.C.) Co., Ltd. |
Tungsten | Xiamen Tungsten Co., Ltd. |
Tungsten | Xinhai Rendan Shaoguan Tungsten Co., Ltd. |
* This smelter/refiner is believed to have ceased operations during 2019 due to market conditions.
Countries of origin identified: Angola, Argentina, Armenia, Australia, Austria, Bolivia, Brazil, Burundi, Cambodia, Canada, Central African Republic, Chile, China, Colombia, Congo (Brazzaville), Czech Republic, Djibouti, DRC- Congo (Kinshasa), Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Germany, Ghana, Guinea, Guyana, India, Indonesia, Ireland, Ivory Coast, Japan, Jersey, Kazakhstan, Kenya, Korea, Republic of, Kyrgyzstan, Laos, Madagascar, Malaysia, Mali, Mexico, Mongolia, Morocco, Mozambique, Myanmar, Namibia, Niger, Nigeria, Papua New Guinea, Peru, Philippines, Poland, Portugal, Russian Federation, Rwanda, Saudi Arabia, Sierra Leone, Slovakia, South Africa, South Sudan, Spain, Suriname, Sweden, Switzerland, Taiwan, Tajikistan, Tanzania, Thailand, Turkey, Uganda, United Kingdom, United States, Uzbekistan, Viet Nam, Zambia and Zimbabwe.
Table 2 – The following Vendor-Reported Legitimate Facility was validated as a smelter/refiner but was unaudited in 2019 by the RMI (or other program) and country of origin information was unavailable.
Metal | Official Smelter Name |
Tin | Dongguan CiEXPO Environmental Engineering Co., Ltd. |
