Conflict Minerals Report 2019/20
Click to download: 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) 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.
Click to download: ZTE's Policy on Conflict Minerals Management
Management Objectives and Commitments
Medium and long-term objectives:
Continuously improve conflict minerals management capability to meet customer requirements and exceed the industry average
Continue to require suppliers to reply CMRT and maintain 100% response rate
Ensure all qualified suppliers sign the Declaration of Metal Conflict-Free
Ensure all suppliers worth the top 95% of ZTE's purchasing volume complete the Supplier Conflict Minerals Management Questionnaire
Verify suppliers' due diligence as part of overall supplier assessments
Design and offer more training programs for suppliers to raise their awareness and to enhance their conflict minerals management system
Actively engage the upstream suppliers, smelters and refiners. Provide support to suppliers to get third-party certification and participate in industry initiatives, so as to achieve 100% of the identified smelters and refiners are certified with independent third-party certification program；
Collaborate with suppliers, stakeholders, and industry initiatives to further increase awareness and conflict minerals due diligence capabilities.
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.
In 2019, ZTE audited 211 suppliers in regard to their use and sources of conflict minerals, and their investigation into and replies from smelting plants.
Interactions With Related Parties
The effective management of conflict mineral resources requires in-depth engagement and joint promotion with all partners in the value chain. ZTE communicates with suppliers regularly to confirm the progress on conflict mineral issues and ensure that partners gain a deep and comprehensive understanding of conflict minerals management.
In 2019, ZTE held ten supplier conferences in the form of camps and seminars, and learned and discussed about conflict minerals with more than 200 suppliers.
Due to the COVID-19 impact, the 2020 training camp for high-risk conflict minerals suppliers was postponed to July 3. A total of 68 high-risk suppliers attended this training to discuss with ZTE about the way to improve their management capabilities and performance in tracing the supply chain. For suppliers hindered from participating in the offline training by the COVID-19, we have uploaded the training materials to ZTE's SCM system and notified the suppliers of the availability of such materials.
In 2020, ZTE takes the initiative to communicate with RBA and GESI, and actively participates in the external organizations' research on conflict minerals manag