AMD’s is committed to the highest standards of social, ethical, and environmental conduct, and we apply that commitment to the companies with which we do business. Our approach to supplier responsibility ensures alignment with our corporate strategy to deliver high-quality products and services while maintaining and enhancing long-term, mutually beneficial, and ethical supplier relationships. We believe that well-managed businesses also have strong social and environmental performance. We also believe that the most effective and efficient way to achieve good performance is by placing responsibility with the entities that have authority to institute and manage robust programs—our suppliers. This approach is evident in how AMD has integrated supplier performance into our business processes, rather than treating it as an isolated program.
Our goal is to ensure that working conditions in our supply chain are safe, that workers are treated with respect and dignity, and that manufacturing processes are environmentally responsible.
In addition to the work we are doing with our own supply chain, AMD is actively engaged in industry-wide efforts to embed excellent social, environmental, and ethical performance into the electronics industry’s supply chain practices.
Review our supplier responsibility policies and practices in the 2010 Annual CR Report.
Conflict Minerals
The Democratic Republic of Congo (DRC) has been the site of one of the world’s worst humanitarian crises during the last decade. An estimated 5 million people have died as a result of violent armed conflict1. Illegal armed groups and some Congolese national military units commit human rights abuses and are supported by the trade in minerals.
In 2010, the United States Congress passed a new law requiring US-based public companies to disclose the measures they have taken to eliminate so-called “conflict minerals” from their supply chains. This new law—part of the Dodd-Frank Wall Street Reform Act signed by President Obama in July 2010—requires the Securities and Exchange Commission to draft a rule setting out new reporting requirements. Under the new rule, any U.S.-based publicly traded company will be required to report the measures it has taken to identify the source of conflict minerals—tin, tungsten, tantalum, and gold—as well as disclose any products that are not “conflict-free.”
While the mining of mineral ore in Africa is several steps removed from the manufacture of high-tech electronics, our industry has responded. Even before the passage of this new law, members along the electronics industry value chain had been developing a responsible approach to enable conflict-free mineral sourcing from the region. This involves 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 verify that the smelters that produced the metals in finished products are certified conflict-free.
AMD is appalled by the stories of conflict, human rights violations, labor, and environmental abuses in the DRC. We are rising to the challenge to do our part through the support and leadership of several key initiatives:
- AMD co-chairs a multi-stakeholder policy and diplomacy working group with the Enough Project—a U.S. based non-government organization (NGO). This working group includes representatives of NGOs, socially responsible investment groups, and companies from multiple industrial sectors. The aim of this working group is to create a workable consensus policy for both implementation of the U.S. law and the diplomacy aimed at eliminating mineral sourcing that contributes to the human suffering in the DRC region. To date, this working group has delivered two sets of consensus policy positions to the U.S. Securities and Exchange Commission (SEC). To our knowledge, these submissions are the only multi-stakeholder consensus positions received by the SEC for the development of this ground-breaking rule.
- Through the Electronics Industry Citizenship Coalition (EICC), AMD is actively engaged in the conflict-free smelter program to ensure responsible sourcing. 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 effort is to audit smelters of tin, tantalum, tungsten and gold, and identify “conflict-free smelters.”
- AMD is also working closely with an EICC working group to develop a standardized process for tracking these minerals from the smelter through the electronics industry’s supply chain. While the effort is still very new, the intent is to build a streamlined system that is efficient and effective for the entire supply chain.
- To support the development of a reliable “in-region” sourcing process, AMD is actively working with stakeholders from civil society, government, and the social investment community. Partnering with the Enough Project, AMD met with senior officials in the U.S. State Department to emphasize the need for government leadership of the “in-region” sourcing process. “In-region” sourcing aims to continue economic development of the region through mineral sales, while eliminating those sales that support armed militias, conflict, and human rights abuses.
- Within our own supply chain, we are developing appropriate processes to identify any conflict minerals. The first step is to understand if and where these minerals exist in our products. Once identified, we will employ the standardized industry processes (currently being developed) to track the minerals back to the smelters of origin, and push for these smelters to become “conflict-free.” While mapping our supply chain back to the smelter is very complex, we are committed to the process and will continue to work with our business partners—both customers and suppliers—to develop a workable and efficient tracking system.
As we look at the potential outcomes of this new policy, we are mindful that tracking metals through the supply chain is only just a start to a solution; a sustainable end to the suffering in the DRC will take much more. Deeply rooted socio-economic factors must be addressed by governments, civil society, private sector interests, and others.
Also, if the implementation of the new law is not handled carefully, it may have the unintended consequence of banning or significantly reducing mineral exports from the DRC region, which could lead to more suffering. AMD will continue to work with all stakeholders to help ensure this policy results in tangible improvements in the DRC. While the electronics industry and the private sector in general have a role in this discussion by providing jobs, fair wages, ethical business practices, and good working conditions, true success must involve all stakeholders.
California Transparency in Supply Chains Act of 2010
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.