Northrop Grumman is committed to the responsible sourcing of minerals through our global supply chain. In 2012, the U.S. Securities and Exchange Commission (“SEC”) issued rules implementing the “conflict minerals” disclosure requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Under these rules, we report annually to the SEC on our use of conflict minerals (tantalum, tin, tungsten and gold) originating in the Democratic Republic of Congo (“DRC”) or any of the DRC's adjoining countries in products manufactured by the Company.
Underlying the Dodd-Frank disclosure requirements is a concern that conflict minerals originating in the DRC or adjoining countries may be mined and sold by armed groups to finance civil violence. These minerals can make their way into the supply chains of the products used by consumers and businesses around the world. Tracing these minerals in the international supply chain is complex.
We currently focus our compliance efforts in the following areas:
- Conducting a reasonable country of origin inquiry with our global supply base as part of our conflict minerals due diligence process.
- Utilizing the Organisation for Economic Co-operation and Development's (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-risk Areas and, where appropriate, their five step framework for risk-based due diligence in the mineral supply chain.
- As part of this process, we collect and evaluate various supplier responses to the Responsible Minerals Initiative (RMI) Conflict Minerals Reporting Template (CMRT).
- We request suppliers to identify products in their supply chain that contain conflict minerals and validate the country of origin of these minerals.
- Including a contractual clause related to conflict minerals in new or renewed U.S. and non-U.S. supplier contracts as part of our standard Terms and Conditions.
- Requiring, in accordance with our Supplier Standards of Business Conduct, our suppliers to comply with any applicable laws and regulations regarding conflict minerals and assist us in meeting our obligations under law and regulations.
We also continue to engage with trade associations, serving as members of the Aerospace Industries Association (AIA) and RMI, to benchmark our processes and share best practices.
We recognize these rules have required, and will continue to require, time and effort on the part of our suppliers. We appreciate their ongoing support in this important effort. Periodic updates to Northrop Grumman's supply chain guidance can be found on our Suppliers website.
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