Conflict-Free Raw Materials Management

Conflict-free raw material procurement is a critical sustainable purchasing practice. It ensures our raw material sourcing does not involve or finance resources from conflict-affected regions, especially those linked to human rights abuses, illegal trade, or armed conflicts.

Responsible Actions

1. Transparent Supply Chain

• Goal：Establish end-to-end transparency to identify raw material origins, production processes, and supplier backgrounds, eliminating potential conflict risks.
• Actions：
  • Deploy blockchain traceability for refractory metals (titanium, molybdenum, zirconium). Record 100+ data points (ore mine location, smelting batch numbers, transport routes) and share access with customers/auditors.
  • Conduct annual supply chain mapping using tools like the OECD Due Diligence Questionnaire. Verify 100% of Tier 1 suppliers’ raw material sources.

2. Supplier Audits

• Goal：Ensure suppliers adhere to our conflict-free policies through ethical and compliance assessments.
• Actions：
  • Implement a 3-tier audit system：
    • Tier 1 (critical suppliers): On-site audits every 12 months, focusing on conflict mineral risks (e.g., tantalum from DRC).
    • Tier 2 (secondary suppliers): Document reviews (e.g., smelter certificates) to confirm no conflict region sourcing.
  • Use third-party verification (e.g., SAI Platform, RMI) to audit high-risk suppliers, ensuring independence and credibility.

3. Compliance & Regulatory Adherence

• Goal：Align purchasing practices with global laws (e.g., Dodd-Frank Act Section 1502) and international standards.
• Actions：
  • Maintain compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Section 1502) for conflict minerals (tantalum, tin, tungsten, gold). File annual reports with the SEC.
  • Adhere to China’s Guidelines for Responsible Mineral Sourcing and EU Conflict Minerals Regulation (CMR) for raw material procurement.

4. Technology Application

• Goal：Leverage technology to enhance supply chain transparency and risk detection.
• Actions：
  • Use AI-powered risk assessment tools (e.g., Refinitiv Conflict Minerals Solution) to screen suppliers against global conflict region databases (e.g., UN Security Council sanctions lists).
  • Integrate IoT sensors in raw material containers to track shipments in real time, preventing diversion to/from conflict zones.

5. Social Responsibility Education

• Goal：Raise awareness among employees and suppliers to drive collective adherence to conflict-free policies.
• Actions：
  • Conduct annual training programs for procurement teams, covering topics like conflict mineral identification, OECD due diligence, and regulatory compliance.
  • Host supplier workshops (virtual/in-person) to explain conflict-free requirements, sharing case studies (e.g., ethical sourcing of zirconium for nuclear applications).