PHOTO: Sasha Lezhnev,
Our goal is to deliver high-quality products while ensuring that working conditions throughout our supply chain are safe, that workers are treated with respect and dignity and that manufacturing processes are environmentally responsible. We believe that the most effective and efficient way to achieve these goals is by placing responsibility with the entities that have authority to institute and manage robust programs—our suppliers.
AMD incorporates corporate responsibility expectations into the same business processes we use for all supplier performance – the supplier business reviews (SBR). The SBR is the forum where senior leaders from both companies come together on a regular basis to discuss a broad range of topics relevant to our business relationship. Corporate responsibility is an integral part of these relationships and thus included in the SBR for all of AMD’s top-tier suppliers. To assure that our responsibility standards are being accomplished, we set clear expectations, ask our suppliers to report on their performance during SBRs and review third-party audit information.
Review our supplier responsibility policies and practices in the 2011 Annual CR Report.
Read more in the sections below:
The DRC has been the site of one of the world’s worst humanitarian crises throughout the last decade. An estimated 5 million people have died as a result of violent conflict. Illegal armed groups and some Congolese national military units regularly commit human rights abuses while being supported by the trade of minerals.1
In 2010, a new law was enacted requiring U.S.-based public companies to disclose the measures they have taken to identify these so-called “conflict minerals” in their supply chains. This new law—part of the Dodd-Frank Wall Street Reform and Consumer Protection Act— requires the SEC to draft a rule setting out the standards for due diligence and reporting.
The SEC rule, while not finalized as of March 2012, will require affected companies (including AMD) to report the measures they have taken to identify the source of conflict minerals—tin, tungsten, tantalum and gold—as well as disclosing which of their products are not “conflict-free.”
Although the mining of mineral ore in Africa is several steps removed from the manufacture of high-tech electronics, AMD has responded. Even before the passage of the Dodd-Frank law, AMD engaged with other companies in the electronics supply chain as well as NGOs and SRI groups to propose effective, consensus policies to implement the law.
One such engagement is with the Enough Project, a U.S.-based NGO that includes representatives of other NGOs, SRI groups and companies from multiple industrial sectors. AMD chairs this multi-stakeholder group whose goal is to create a workable consensus policy for implementation of the U.S. law. To date, this working group has delivered four letters to the SEC with consensus policy positions. Each letter was endorsed by approximately 25 organizations.2
This degree of multi-stakeholder collaboration is unusual for any policy issue, but unprecedented on an issue as sensitive as conflict minerals. To our knowledge, the comment letters from this group are the only multi-stakeholder consensus positions received by the SEC, and were referenced in multiple instances in the proposed SEC rule.
AMD believes that effective implementation of the new law must involve three fundamental elements:
- An “in-region” mineral certification system that enables the traceability and certification of minerals mined in the DRC region.
- A conflict-free smelter program that enables third-party validation of a smelter’s sourcing practices and a determination of whether its sources are conflict-free.
- Due diligence to verify that the metals in finished products can be traced to a certified conflict-free smelter.
AMD plays a leading role in initiatives that support each of these elements:
- To support the development of a reliable “in-region” sourcing process, AMD is actively working with stakeholders from government, civil society and the SRI community.
- AMD is a founding member of the PPA for Responsible Minerals Trade. The PPA is a multi-stakeholder group composed of NGOs, companies and social investors, as well as the U.S. Department of State and U.S. Agency for International Development (USAID). This group, formed in November 2011, is focused on helping the DRC and other governments in the region break the link between the illicit minerals trade and the ongoing violence and human rights abuses. The group will work with Congolese partners, the private sector and civil society to help ensure responsible trade in minerals that does not benefit rebel groups or abusive army units.
- Throughout 2011, AMD met with senior officials in the U.S. State Department, including Undersecretary of State for Economic, Business, and Agricultural Affairs, Robert Hormats; Assistant Secretary of State for African Affairs, Johnny Carson; and the special envoy to the DRC region, Ambassador R. Barrie Walkley. The purpose of these meetings was to provide our input to the U.S. government on appropriate actions needed for responsible minerals trade in the DRC region.
- AMD also participated in the SEC’s roundtable on conflict minerals and spoke on a panel with Robert Hormats, Ambassador Faida Mitifu of the DRC and others at the Woodrow Wilson International Center for Scholars.
- AMD supports the “conflict-free smelter program” through our collaboration with the EICC. Smelters are the natural choke point in the supply chain—meaning that there are numerous sources of raw materials (ore) that flow into a smelter and numerous uses of the refined metal that leave the smelter. The objective of this program is to audit smelters of tin, tantalum, tungsten and gold, and identify those that do not use minerals associated with conflict.
- AMD is also working closely with EICC to develop a standardized process for tracking these minerals from the smelter through the electronics industry’s supply chain. While this effort is still very new, the intent is to build a streamlined system that is efficient and effective for the entire supply chain.
- Within our own supply chain, AMD has developed processes to identify conflict minerals. We have utilized the standardized EICC processes to trace the minerals back to the smelters of origin and correlated these with the conflict-free smelter program. While mapping our supply chain back to the smelter is complex, we have had some early success and are committed to the process. AMD plans to continue to work with our business partners—both customers and suppliers—to develop a workable and efficient tracking system as the SEC rules are finalized.
We are mindful that tracking metals through the supply chain is only one facet to ending the suffering in the DRC. Deeply rooted socioeconomic factors must be addressed by governments, civil society, private sector interests and others. Additionally, if the implementation of the new law is not carefully managed, it may have the unintended consequence of banning or significantly reducing mineral exports from the DRC region, which could lead to even more suffering.
AMD will continue to work with all stakeholders to help ensure this policy results in tangible improvements in the DRC. While AMD and the electronics industry have an important role in improving conditions in the DRC, sustainable success requires long-term focus from all stakeholders.
The California Transparency in Supply Chains Act of 2010 (SB 657) (the “Act”) requires manufacturers and retailers doing business in the State of California to disclose information regarding their efforts to address the issues of slavery and human trafficking in their supply chains. In accordance with the requirements of the Act, AMD offers the summary below of our activities to identify and prevent human trafficking and slavery activities by our vendors.
AMD Policies and Actions
AMD strongly opposes the practice of slavery or human trafficking. AMD utilizes several approaches detailed below designed to ensure and verify the absence of such practices in our supply chain.
AMD is an active member of the Electronic Industry Citizenship Coalition (EICC) and has adopted the Electronics Industry Code of Conduct (the EICC Code of Conduct). AMD generally requires conformance with this code from its suppliers. The EICC Code of Conduct is based on international labor, environmental and human rights standards that clearly prohibit slavery and human trafficking.
Risk-based supplier assessments: As a part of AMD’s supplier management process, we assess our suppliers to evaluate their conformance to the EICC Code of Conduct. This approach includes preliminary risk assessments as well as more detailed supplier self-assessment questionnaires. The results of each method are scored utilizing the EICC scoring system to verify the suppliers’ risk of non-conformance.
Supplier audits: Based on the results of the risk assessment, AMD may require a third-party on-site audit of supplier practices and management systems to evaluate supplier compliance with the EICC standards including avoiding human trafficking and slavery in our supply chain and with applicable laws and regulations. These audits may be announced or unannounced depending on the circumstances.
Supplier assurance: Each year, AMD communicates with suppliers in writing to ensure that our expectations are clear and up to date with regard to responsible social, ethical and environmental conduct. This letter requires suppliers to comply with international standards, applicable laws and regulations as well as the EICC Code of Conduct. Additionally, AMD’s standard terms and conditions for the procurement of goods and services require conformance to applicable laws and regulations, and reinforce our expectations regarding responsible social, ethical and environmental conduct.
Accountability: In addition to risk assessments and audits, AMD discusses conformance to the EICC Code of Conduct as well as related management systems with our suppliers during regular business reviews. AMD’s supplier business reviews are the optimal venue for accountability with regard to responsible social, ethical and environmental conduct because senior management participates in these meetings and future business awards are at stake.
Training: AMD suppliers have access to information and training regarding conformance expectations through the Electronic Industry Citizenship Coalition learning and capability activities.
AMD Standards of Business Conduct: AMD’s Worldwide Standards of Business Conduct establish mandatory rules and guidelines for AMD’s employees. These standards are substantially equivalent to the EICC Code of Conduct and specifically prohibit forced and compulsory labor practices. These standards apply to all AMD employees. Every AMD employee receives a copy and mandatory training on these standards. In the event an employee violates these standards, AMD will take immediate and appropriate action, which may include termination of employment.
Conflict Minerals: AMD’s commitment to uphold human rights throughout our supply chain is reflected in the policies and procedures outlined above as well as in our actions addressing the issue of conflict minerals. AMD is leading policy and implementation discussions aimed at eliminating human rights abuses stemming from minerals mining in the conflict zones of the Democratic Republic of Congo (DRC) and adjoining nations.
To learn more about AMD’s corporate responsibility programs, please review our latest Corporate Responsibility Report.