Conflict Minerals Update 11/27/2018 6:05 PM SIA in US Conflict Minerals Update WSC ESH TF - Shanghai February 2011 Molly Gavin QUALCOMM Talking Points

Agenda Background Legislation Securities and Exchange Commission (SEC) Rulemaking EICC-GeSI Extractives Working Group Conflict Free Smelter Program Supply Chain Due Diligence Tool International Developments incl. OECD Due Diligence Guidance Questions

Democratic Republic of the Congo (DRC) 3Ts (Sn, Ta, W), gold (Au) and Cobalt (Co) are all mined in the DRC. There is ongoing conflict is in eastern DRC provinces where the 3Ts and gold are mined. Mining activity is crucial to the DRC economy. However, some mines are controlled by parties that are causing serious social and human rights violations in the region. These minerals are not unique to the DRC. The majority of the global supply of these minerals originates outside of the Great Lakes Region. Illegal mining is contributing to Serious human rights abuses, theft, extortion Violence over control and taxation of mineral resources Forced and child labor Limited development options ->artisanal and small-scale mining Conservation impact General environmental concerns related to metal mining and processing include natural resource depletion, land degradation, water and air pollution, and greenhouse gas emissions. Social concerns include ineffective sharing of wealth generated by mining projects, government and company corruption, human rights violations, native land rights disagreements and aboriginal people displacement, disruption of traditional communities and health and safety issues. Source: GHGm report “Social and Environmental Responsibility in Metals Supply to the Electronic Industry,” http://www.gesi.org/LinkClick.aspx?fileticket=anlAuBauWU8%3d&tabid=60 , p. v Artisanal & small-scale mining (ASM) are crucial to DRC economy DR Congo Mineral Map source: http://minerals.usgs.gov/minerals/pubs/country/maps/92449.gif Data source: US Geological Survey 3

“Conflict Minerals” Mineral Metal Derivatives Related Products DRC Market Share Annual Conflict Value Columbite–tantalite (coltan) Tantalum (Ta) Capacitors 15-20% $11M Cassiterite Tin (Sn) Solder in PCBs and other components; cans 6-8% $115M Wolframite Tungsten (W) Wiring, circuits LCD screens, drill bits 2-4% $8M Gold Gold (Au) PCBs, connectors 1% $50M

Usage of the 3 T’s and Gold Tantalum (Ta) Tin (Sn) Tungsten (W) Gold (Au) Electrical Non-electrical Electronics includes not just ITC, but any electronic device such as automotive, household, etc Data sources from: 1 US Geological survey 2 GeSI report: http://www.gesi.org/files/20080620_ghgm_ser_metalstoelectronics.pdf 3 MakeITfair reports: http://makeitfair.org/the-facts/reports 4 Enough: http://www.enoughproject.org/publications/comprehensive-approach-conflict-minerals-strategy-paper 5 GHGm report: http://www.gesi.org/LinkC These metals are used widely in electrical products (including automobiles and appliances) Phase-out / substitution of some of these metals is not currently cost effective, or technically feasible The amount of these metals used in a typical electronic product are in the order of about 0.7 grams for tantalum, 10 grams for tin, 0.0001 grams for tungsten, and 0.3 grams for gold 5

NGO Public Affairs Campaign Numerous NGOs active and monitoring companies Extensive news coverage

SEC Timeline Draft regulations issued in December 2010 Comments due to SEC March 2nd, 2011 SEC must issue final rules by April 15th, 2011 Companies subject to SEC reporting must report on first fiscal year that begins after promulgation of rules

Conflict Minerals – SEC Rulemaking Proposal Requirements (comments due March 2nd) If yes or do not know, submit report 1 2 Submit annual SEC disclosure? 3 Determine if covered (a) Issuer that files reports under Securities and Exchange Act? and (b) If any conflict mineral (or metal derivative) is “necessary” for the production or functionality of a product that you “manufacture” Determine whether products contain “conflict minerals” produced in DRC or adjoining countries by a “reasonable country of origin inquiry” Descriptions of: measures to exercise due diligence on source and chain of custody of minerals And of any products that are not “DRC conflict free” facilities used to process those conflict minerals (i.e., smelter) country of origin of those conflict minerals

Decision Tree on Proposed SEC Rules Source: PWC January 2011

EICC and GeSI Approach to Responsible Sourcing Finished Product MINE SMELTER/REFINERY OEMS In Region Sourcing Conflict Free Smelter Program Due Diligence

Conflict-Free Smelter Program What: Multi-stakeholder developed audit process to assess whether smelters are sourcing DRC conflict-free minerals Why: Given minerals lose traceability after processing, smelter /refinery most practical place to validate conflict-free sources of Tantalum, Tin, Gold, Tungsten How: Addressing each metal separately, but simultaneously Order of priority is Tantalum, Tin, Tungsten, Gold Validation protocol for each metal Smelter must have: policy, tracing mechanism back to origin, documentation showing purchased materials from non-conflict sources; for minerals sourced from DRC, material must be verified through credible in-region chain of custody tracing scheme Audits conducted by independent third party auditor Names of compliant smelters will be published. Electronic component and final product manufacturers will have option to direct suppliers to source material compliant smelters Industry-wide efforts by EICC/GeSI to adopt sectoral standards for smelter auditing and validation: Conflict-Free Smelter Program Minerals lose traceability after processing Independent audits of smelters as sourcing conflict-free minerals Companies can direct suppliers to source materials from these smelters Starting with tantulum (audits of smelters under way now) and then tin Combined with ITRI tin tracking/tracing system upstream of smelter Will need to be combined with new supplier declaration standards for communication up and down supply chain Names of compliant “smelters” and elements of audit results to be posted on EICC and GeSI websites Companies will have option to direct suppliers to use “compliant” smelters/refiners Audit results and information on CFS Program will be available for use by other industries EICC and GeSI are developing an industry tool to engage suppliers

Conflict-Free Smelter Program: Industry Milestones for Tantalum, Tin, Tungsten, Gold Tantalum Schedule Tin Schedule Tungsten Schedule Gold Schedule Initial Meeting of Supply Chain Sept 2009 May 2010 None N/A Smelter Visits and gaps identified Feb 2010 Sept 2010 Dec 2010 Mar 2011 Validation checklist finished June 2010 Feb 2011 TBD Smelter Gaps closed Oct 2010 Smelter 3rd party validation completed May 2011 Smelter list publically available June 2011 Goal is to have first round of validations across all metals done by end of Q3 2011

EICC-GeSI Due Diligence Efforts Purpose The purpose of the EICC-GESI Due Diligence Subteam is to define company due diligence processes that align with SEC due diligence reporting regulations, that will allow companies to consistently interface with their supply chains, create efficiencies and industry standard tools Accomplishments to date Draft Due Diligence Tool that aligns with current SEC proposed rules Declaration Smelter and Mine List Proposed Pilot Plan and Schedule (under review) Challenges Vagueness of exactly what ‘due diligence’ is in the US legislation and the proposed SEC rules. Varying opinions of companies on assumptions of what ‘due diligence’ might be. Minimum due diligence standards still unclear: Will require assessment of products that contain conflict minerals, adoption of policy for suppliers, requirement that suppliers adopt policy Will generally require traceability to “approved” smelters that use audited/certified supply chains

International Developments OECD “Due Diligence Guidance for Responsible Supply Chain Management of Minerals from Conflict-Affected and High-Risk Areas” States in region; NGOs; business groups (EICC, ITRI, etc.) Would provide guidance on best practices, and help harmonize cross-sectoral expectations for best practices Endorsed this week by UN expert group report, which in turn endorsed by UN Security Council Likely to be highly influential with SEC Five steps: Strengthening company management systems Identifying and assessing risk in the supply chain Designing and implementing a strategy to respond to identified risks Ensuring independent third-party audits Publicly disclosing supply chain due diligence and findings Some early indications that EU considering also action to require due diligence for conflict minerals