ZTE Corporation Conflict Minerals Report 2020/21
ZTE Corporation Conflict Minerals Report 2019/20
Policy on Conflict Minerals Management
ZTE abides by the United Nations Global Compact and other universally accepted international conventions and practices, including the United Nations Global Compact, Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas of the Organization for Economic Cooperation and Development (OECD), and the Responsible Mineral Initiative (RMI), respects human rights and the environment, and strives to ensure that all product materials are properly sourced. Moreover, ZTE has released the Policy on Conflict Minerals Management and Regulations on Conflict Minerals Management Regulations, specifying the requirements for suppliers in terms of mineral exploitation, transportation, processing, trading, processing, smelting, and export. We tolerate no activities which may aggregate conflicts, result in severe environmental deterioration or violate human rights, and never profit from these activities or provide assistance in any way. We prohibit the violations of human rights in relation to mineral mining, transportation, or trading, and prohibit direct or indirect support to non-government armed groups or security forces illegally controlling mining sites, transport routes, and/or trading sites.
In 2011, ZTE joined the Global e-Sustainability Initiative (GeSI). In 2019, ZTE USA became a member of the Responsible Business Alliance (RBA), rejecting materials that directly or indirectly caused conflicts. ZTE requires that all relevant suppliers (including component suppliers, parts suppliers, or logistics suppliers of items containing tin, tantalum, tungsten, and/or gold must guarantee that all materials come from environmentally and socially responsible sources. Each newly accepted qualified supplier needs to submit a Conflict Minerals Reporting Template (CMRT) and a Cobalt Reporting Template (CRT) during their initial application, and each qualified supplier must sign the Declaration of Compliance Management on Conflict Minerals. We conduct conflict minerals investigations on our material suppliers each year.
ZTE is entitled to request suppliers to provide evidence for their material sourcing. To this end, suppliers need to formulate and implement conflict mineral policies within their internal management systems. Such policies shall contain a statement of compliance with applicable laws and regulations and a commitment to the responsible purchasing of relevant materials. Suppliers also need to communicate with upstream suppliers and to work together to ensure that the relevant materials can at least be traced back to their smelting plants, so as to confirm that the purchased metals are from non-conflict-minerals smelting plants.
Management Objectives and Commitments
Short-term objectives:
1.Combine conflict minerals management with and within the IT platform to increase working efficiency and management effectiveness;
2.Expand the scope of conflict minerals management, improve the on-site taskforce and make sure on-site audits and checks are more accurate and trustworthy;
3.Provide training for the on-site task force’s auditors and inspectors to increase their working efficiency and professionalism;
4.Design and offer more training programs for suppliers to raise their awareness and to enhance their conflict minerals management capability;
5.Actively cooperate with upper-stream and lower-stream suppliers to improve business partnership and decrease potential conflict minerals related risks; participate in more international conflict minerals conventions to help the industry and expand influence, contribute to more international groups that fight for conflict mineral matters;
6.Continuously improve conflict minerals management capability to meet customer requirements and exceed the industry average;
7.Continue to require suppliers to reply to CMRT/CRT and maintain 100% response rate;
8.Ensure all qualified suppliers sign the Declaration of Metal Conflict-Free;
9.Verify suppliers' due diligence as part of overall supplier assessments.
Medium and long-term objectives:
1.Actively cooperate with the upstream suppliers and SORs, provide support for suppliers to obtain third-party certification and participate in industry initiatives related to conflict minerals;
2.By 2025, more than 95% 3TG SORs must comply with the independent third-party certification standards (e.g. RMAP);
3.By 2025, at least 80% cobalt SORs obtain the independent third-party certification standards (e.g. RMAP);
4.Collaborate with suppliers, stakeholders, and peers to further improve awareness and due diligence capabilities related to conflict minerals;
5.Establish and strengthen management structure according to the ESG rating requirements and standards of MSCI;
6.Ensure steady improvements on conflict mineral management internally and externally;
7.Expand the audit scope to other key minerals in suppliers from downstream to upstream to improve the completeness of supply chain mapping and transparency of cobalt and other mineral supply chain risks.
Supply Chain Due Diligence
As a member of RBA, ZTE supports and accepts smelters certified by the Responsible Mineral Guarantee Program (RMAP). That is, they will be qualified smelters recognized by ZTE as long as they have been certified by RMAP. In 2019, ZTE formulated its Due Diligence Guidelines in reference to OCED's principles, and established third-party audit procedures and tools. We promote suppliers to improve their own mineral tracking system. We conduct spot checks on high-risk suppliers to evaluate the rationality and effectiveness of their mineral procurement practices. According to ZTE's policy, ZTE shall terminate its contract(s) with a supplier who fails to accept necessary third-party audit, rejects rectifications, or refuses to cooperate in rectifications.
Interactions With Related Parties
Effective management of conflict minerals requires deep participation and joint promotion of all value chain partners. ZTE regularly communicates with our suppliers to confirm the progresses of conflict minerals issues and ensure that all partners have deeper and more comprehensive understandings on conflict minerals related issues. In 2020, ZTE held numbers of supplier meetings through supplier camps, supplier special topic seminars and more; ZTE studied and discussed with more than 200 suppliers on conflict mineral issues. The 2021 Training camp for High-risk Suppliers of Conflict Minerals had been postponed to May 21 due to the impacts of COVID-19. A total of 87 suppliers participated in the special training session to discuss with ZTE on how to improve their management capacity and supply chain traceability. In order to accommodate suppliers that were unable to attend the meeting due to COVID-19, ZTE provided the suppliers an option to learn online, we also uploaded the training materials of conflict minerals for suppliers to ZTE Supply Chain website and informed the suppliers to download and learn. In 2021, we were invited by GeSI to become a member of RMI. We actively participated in RMI regular meetings and exchanged views with other RMI members on conflict mineral management issues. We also worked with RCS Global to conduct systematic due diligence in the middle and downstream of ZTE cobalt supply chain. At the same time, we also keep close contact with CCCMC and other national organizations, actively participate in seminars and seize the industry trends.
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