Mineral Sourcing

Samsung Electronics places great importance on the responsible procurement of minerals to ensure we play our part in protecting every person we employ, the customers we serve and the environments in which we operate.

Recently, human rights violations and environmental degradation caused by mining of minerals in Africa’s conflict zones and Indonesia’s Bangka Island have emerged as key global issues. Samsung Electronics is working as a responsible corporate citizen and supplementing global efforts to address these concerns. The company places great importance on the responsible procurement of minerals throughout its entire supply chain worldwide.

Recognizing that collaboration with other international enterprises, NGOs and organizations is essential to addressing this issue, Samsung has joined forces with the Electronics Industry Citizenship Coalition (EICC) to find effective measures to work toward responsible procurement of minerals in its supply chain.

Samsung Electronics is fully aware that raising awareness throughout its entire supply chain is critical in preventing the use of conflict minerals. To that end, Samsung Electronics regularly requires its suppliers to disclose their sourcing origins to prevent the potential use of conflict minerals.

Samsung Electronics will continue its best efforts to bar the use of conflict minerals in all of its products – in collaboration with its suppliers and relevant domestic and international organizations.

I. Conflict Minerals

Minerals from areas marred by military conflict

The process of mining minerals from conflict zones in Africa – including the Democratic Republic of Congo and its neighboring countries – has been criticized for contributing to human rights violations, such as child labor and sexual abuse. Profits from mining operations in these regions often become a source of funds for rebel groups, fueling further conflict and violence in the regions.

In 2010, the United States Congress passed a bill defining “conflict minerals” as four major minerals often mined in conflict zones: tantalum, tin, tungsten and gold. Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires disclosure of conflict minerals in the supply chain. Although Samsung Electronics is not subject to these requirements, it is continuing to closely monitor the standards set by this legislation – as many of its customers and business partners are subject to the requirements set by the law.

Raising suppliers’ awareness and monitoring their use of conflict minerals

Banning the use of conflict minerals requires extensive collaboration with various entities, ranging from smelters to suppliers.

Samsung Electronics has worked hard to lay the groundwork for cooperation with its domestic and international suppliers, starting with a general consensus on banning the use of conflict minerals.

In 2011, Samsung Electronics hosted chief executive officers from more than 700 supplier companies in Korea to inform and educate them on the global legislative landscape and the importance of banning conflict minerals. As a result, Samsung Electronics received a pledge of compliance from more than 2,000 of its suppliers across the globe.

In 2013, Samsung Electronics conducted an audit on the use of conflict minerals by its major suppliers both inside and outside of Korea using the EICC conflict minerals reporting template. The audit revealed that 62 smelters were providing Samsung Electronic’s major suppliers with the four primary conflict minerals.

The Number of Smelters from which Samsung Electronics’ Suppliers are Sourcing Conflict Minerals (as of March 2013)

Tantalum Tin Tungsten Gold
No. of Countries 4 9 2 13
No. of Smelters 7 20 7 28

An Overview of Electronics Industry Citizenship Coalition (EICC)

- A coalition of the world’s leading IT and electronics companies working together to jointly address CSR-related topics and problems
- Founded in 2004
- To date, 78 global information technology companies have joined the coalition - Samsung Electronics became a member in 2007

- Provide joint systematic responses to emerging CSR-related topics and issues in the electronics industry
- Establish operating principles and guidelines, such as the EICC Code of Conduct and standards, etc.

Samsung Electronics requested that its suppliers submit lists of the smelters in their supply chains to be shared with global CSR-related organizations, such as EICC and the Business of a Better World (BSR), so that other companies can use the information in their own efforts.

According to the results of the internal Samsung investigations conducted in 2011 and 2013, the majority of Samsung Electronics’ suppliers reported that they did not source conflict minerals or did not have the practical means of determining whether or not they were sourcing them. This underscores the need for Samsung Electronics to continue prioritizing the issue of its global supply chain, and to demand more verification of materials from its vendors.

In August 2012, the United States Securities and Exchange Commission (SEC) adopted a rule mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, called ‘Disclosing the Use of Conflict Minerals.’ In compliance with the new rule, Samsung Electronics plans to conduct an annual survey on the use of such minerals throughout its entire supply chain. It will also encourage its suppliers to only use certified smelter factories in recognized countries of origin.

In the long-term, Samsung Electronics plans to set up a monitoring system to track its suppliers’ use of conflict minerals.

Cooperation for the Ban of Conflict Minerals

Global electronic companies are closely working together on a variety of measures to ban the use of conflict minerals. Under the leadership of the EICC, the industry has instituted common guidelines, including the development of tools and resources designed to investigate the use of conflict minerals in their operations and within their supply chains, supported by the United States State Department’s Public and Private Association (PPA) certification of conflict mineral smelters of the four major minerals and countries of origin.

As a large global electronics company, Samsung Electronics is proactively participating in efforts to ban the use of conflict minerals. As a member company of the EICC, Samsung Electronics takes part in the organization’s major programs, including the development of tools and resources to investigate the use of conflict minerals and the certification of compliant smelters. Samsung Electronics has also worked to educate the industry and its supplier companies about the importance of imposing a ban on the use of conflict minerals.

Samsung Electronics will continue its earnest efforts to collaborate with its suppliers and all relevant agencies to prohibit the use of conflict minerals.

II. Tin Mining

Tin is widely used across the electronics, automobiles and packing industries, among others. The major tin-producing countries include China, Indonesia and Malaysia.

The United Kingdom arm of Friends of the Earth (FoE), a global NGO, raised attention to the potential impacts of tin mining on Indonesia’s Bangka Island. According to FoE UK, tin mining may damage the local environment, as well as impact the area’s industries, including agriculture and fishing. Through its “Make It Better” campaign, FoE UK called on global companies to join forces to address the situation.

Samsung Electronics’ Efforts to Solve the Bangka Island Issue

Samsung Electronics is working closely with the EICC and a variety of other stakeholders, including the local Indonesian government, smelter, companies and NGOs to find a reasonable solution.

In 2013, EICC established a working group to address tin mining in Bangka Island. Along with the other member companies in the group, Samsung Electronics requested that the major smelter factory on Bangka Island take action to address the situation.

Samsung Electronics notified its suppliers of the situation as part of its efforts to upgrade its global supply chain management. The company is now collecting information from its suppliers around the world on the current status of their tin procurement.

Samsung Electronics is committed to upholding its social responsibilities as a global company, and will continue to consult with other EICC member companies and NGOs to ensure responsible and ethical sourcing of minerals.