SEC Receives First-Ever Conflict Minerals Disclosure

In a major landmark for conflict minerals disclosure, the SEC received yesterday the first-ever due diligence disclosure report filed in compliance with the Dodd-Frank conflict minerals rule. The report, filed by Siliconware Precision Industries Co., Ltd., includes a completed Form SD as well as Conflict Minerals Report. Siliconware Precision is a provider of comprehensive semiconductor assembly and test services, and has been recognized as a best-in-class supplier to Intel for the past three years.

According to Siliconware Precision’s report, the company determined the minerals in their products to be “DRC conflict undeterminable.” While this determination is not entirely substantial, it does satisfy the letter of the law. As more reports come in, we expect to see better disclosure and deeper due diligence.

The report consists of a summary of the due diligence processes undertaken to determine the conflict minerals status of the minerals used in the company’s semiconductor packaging services.  Based on Electronic Industry Citizenship Coalition and Global e-Sustainability (EICC/GeSI) due diligence measures, the company engaged in a supply-chain survey with direct suppliers of materials containing conflict minerals and a comparison of smelters and refiners identified in the supply chain survey against the list of “conflict-free” smelters identified in the Conflict-Free Smelter program.

Despite the recent mixed ruling from the DC Circuit Court regarding the disclosures, this early submission signals that companies are committed to fulfilling 1502 due diligence requirements in compliance with the rule. Though the report is not as robust as investors and advocates might like, we are pleased that the reporting process is moving forward, and we look forward to more disclosure as the deadline nears. Issuer submissions are due to the SEC by May 31, 2014 for the reporting period covering January 1 to December 31, 2013.