Exhibit 1.01
ACTUANT CORPORATION
Conflict Minerals Report
For The Year Ended December 31, 2018
Background:
The Securities and Exchange Commission (the “SEC”), as mandated by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, has implemented reporting and disclosure requirements related to tantalum, tin, tungsten and gold (collectively “Conflict Minerals”) in response to international concern that exploitation and trade in Conflict Minerals originating from the Democratic Republic of Congo and adjoining countries (“Covered Countries”) is funding human rights abuses and regional conflict. The rules impose certain reporting obligations on public companies that manufacture, or contract to manufacture, products containing Conflict Minerals, and this report is being presented to comply with Rule 13p-1 under the Securities Exchange Act of 1934 (the "Exchange Act").
Company Overview:
Actuant Corporation (the "Company," "Actuant," or "we"), headquartered in Menomonee Falls, Wisconsin, was incorporated in 1910. We are a global diversified company that designs, manufactures and distributes a broad range of industrial products and systems to various end markets. The Company is organized into two reportable segments: Industrial Tools & Services and Engineered Components & Systems. The Industrial Tools & Services segment is primarily engaged in the design, manufacture and distribution of branded hydraulic and mechanical tools, as well as providing services and tool rentals to the industrial, maintenance, infrastructure, oil & gas, energy and other markets. The Engineered Components & Systems segment provides highly engineered components for on-highway, off-highway, agriculture, energy, medical, construction and other vertical markets. While we have manufacturing capabilities including machining, stamping, injection molding and fabrication, but our our manufacturing activities primarily consist of light assembly of components we source from a network of global suppliers.
Conflict Minerals Policy:
We are committed to ethical business practices and promoting the safety, health and protection of people and the environment in the communities we impact. We are guided in our pursuit and implementation of these principles by our Code of Business Conduct and Conflict Minerals Policy, which is available in the Investors - Corporate Governance section of the Company’s website (www.actuant.com).
The Conflict Minerals Policy affirms our commitment to responsible sourcing practices for our components and raw materials. Consistent with the Policy, we will direct our business to suppliers who are able to confirm their products are from conflict-free sources and eliminate non-conforming suppliers and products from our supply chain.
Supply Chain Due Diligence:
We conduct a country of origin inquiry and due diligence of our supply on an annual basis. We have designed our due diligence measures to be in conformity, in all material respects, with the internationally recognized due diligence framework in the Organization for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and related supplements for each of the Conflict Minerals (the “OECD Guidance”). Summarized below is the five-step framework set forth in the OECD Guidance and the related due diligence measures we have undertaken.
Establish Company Management Systems:
We maintain a cross-functional conflict minerals team that includes employees from supply chain, legal, finance and operations. This team, in conjunction with our Trade Compliance Committee, is responsible for administering our Conflict Minerals compliance program, communicating regular updates to senior management and providing guidance on the rules. Our compliance program includes supplier engagement, the aforementioned Conflict Minerals Policy and mechanisms to enable the reporting of exceptions to our policies. We also have included Conflict Minerals compliance clauses in purchase orders and contracts.
Identify and Assess Risk in the Supply Chain:
Our operations are several steps removed from the mining of minerals and do not directly source minerals. As part of our diligence measures, we conducted a country of origin inquiry to determine whether any of the Conflict Minerals in our products originated in the Covered Countries. Because of the diversity of our products and the global nature of our supply chain, we rely on our suppliers to provide us with information about the source and content of components that we purchase from them and incorporate into our products. Similarly, our direct suppliers also rely on information provided by their suppliers. This chain of information creates a level of uncertainty and risk related to the accuracy of the information.
Our country of origin inquiry process and due diligence measures included:
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• | reviews of supplier data and a list of direct material suppliers that we purchased from in 2018 for which it was reasonably possible that the products purchased contained Conflict Minerals; |
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• | a survey to direct material suppliers (over 530 suppliers) using the Conflict Free Sourcing Initiative Conflict Minerals Reporting Template (“CMRT”); |
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• | evaluation of responses from suppliers and review of the results of due diligence measures to ensure the completeness and accuracy of the responses received from the supply chain; |
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• | utilization of a Conflict Minerals third-party provider to (1) track communications with direct suppliers, (2) automate the identification of quality issues (e.g., incomplete CMRTs, inconsistent responses and red flags based on defined criteria) and (3) aggregate CMRT responses for analysis and reporting; |
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• | verification of whether the processing facilities reported to us by our suppliers are included on the list of Conflict Free Sourcing Initiative-compliant processing facilities; and |
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• | obtaining additional documentation and verifications, as applicable. |
We believe that the inquires and due diligence measures described above represent an appropriate and reasonable effort to determine the origins of the Conflict Minerals in our products. Most of our suppliers provided comprehensive responses to the CMRT, but some only provided interim responses or incomplete information.
Design and Implement a Strategy to Respond to Identified Risks:
We expect our suppliers to source minerals from appropriate and responsible sources and believe in establishing and maintaining long-term relationships with compliant suppliers. If, as a result of our due diligence measures, we determine that a supplier is violating our Conflict Minerals Policy, we will either seek an alternate supplier or require a suitable corrective action plan. In limited cases, identifying alternate sources can be difficult or require implementation periods.
Carry Out Independent Third Party Audit of Smelter/Refiner’s Due Diligence Practices:
We do not perform or direct audits of Conflict Minerals smelters and refiners within our supply chain since we are a downstream consumer and several steps removed from smelters and refiners that provide minerals and ores.
Report on Supply Chain Due Diligence:
Actuant is filing this report (and the related Form SD) with the SEC and also is making it publicly available on the Investors - Corporate Governance section of our website at www.actuant.com.
Due Diligence Results:
The most frequently utilized smelters in our supply chain, as reported by our suppliers, are included in Schedule A to our Conflict Minerals Report. Our review identified four facilities that we considered to be higher risk, as they are located in one of the Covered Countries. They are Phoenix Metals Ltd. (Rwanda), PT Refined Bangka Tin (Rwanda), Sudan Gold Refinery (Sudan), and Universal Precious Metals Refining Zambia (Zambia). These four refiners appear in the CMRTs submitted by certain of our suppliers, but, due to the incomplete information provided by those suppliers (including in response to our follow-up inquires), we have been unable to determine whether the components or parts supplied to us actually contain Conflict Minerals from these smelters or refiners.
Ongoing Steps to Mitigate Risk:
We continue to evaluate our due diligence program and have joined the Responsible Minerals Initiative in 2019 to enhance the information available to us and better identify risks in our supply chain. We hope the RMI membership also will bolster our outreach efforts to our suppliers, particularly those who are unable to provide greater transparency about their own sourcing practices, to improve the quality of their responses. We also will continue to explore alternative to those suppliers who cannot reliably confirm their supply chains are free of non-conforming Conflict Minerals.
Independent Audit:
For the year ended December 31, 2018, pursuant to SEC rules and related guidance, an independent private sector audit of this report was not required.
Schedule A to
Conflict Minerals Report of
Actuant Corporation
For the Year Ended December 31, 2018
The following smelters and refiners were most frequently reported by our suppliers as being in their supply chains. Facilities that have been certified as conflict-free by the Conflict Free Souring Initiative list of smelters and refiners are designated below in the fourth column.
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METAL | SMELTER/ REFINER NAME | FACILITY LOCATION | CONFLICT FREE? |
Gold | A.L.M.T. Corp. | Japan | Yes |
Gold | African Gold Refinery | Uganda | No |
Gold | Aida Chemical Industries Co., Ltd. | Japan | Yes |
Gold | Almalyk Mining and Metallurgical Complex (AMMC) | Uzbekistan | Yes |
Gold | Asahi Refining USA Inc. | United States | Yes |
Gold | Asaka Riken Co., Ltd. | Japan | Yes |
Gold | AU Traders and Refiners | South Africa | Yes |
Gold | Boliden AB | Sweden | Yes |
Gold | Estanho de Rondonia S.A. | Brazil | No |
Gold | Ganzhou Huaxing Tungsten Products Co., Ltd. | China | Yes |
Gold | Great Wall Precious Metals Co., Ltd. of CBPM | China | No |
Gold | Guangdong Hanhe Non-Ferrous Metal Co., Ltd. | China | Yes |
Gold | HeeSung Metal Ltd. | Korea, Republic Of | Yes |
Gold | Italpreziosi | Italy | Yes |
Gold | Jiangxi Ketai Advanced Material Co., Ltd. | China | No |
Gold | L'azurde Company For Jewelry | Saudi Arabia | No |
Gold | MMTC-PAMP India Pvt., Ltd. | India | Yes |
Gold | Modeltech Sdn Bhd | Malaysia | Yes |
Gold | Penglai Penggang Gold Industry Co., Ltd. | China | No |
Gold | PT Timah Tbk Kundur | Indonesia | Yes |
Gold | Thaisarco | Thailand | Yes |
Tantalum | 8853 S.p.A. | Italy | Yes |
Tantalum | ACL Metais Eireli | Brazil | Yes |
Tantalum | African Gold Refinery | Uganda | No |
Tantalum | Argor-Heraeus S.A. | Switzerland | Yes |
Tantalum | Asaka Riken Co., Ltd. | Japan | Yes |
Tantalum | Bangalore Refinery | India | Yes |
Tantalum | Boliden AB | Sweden | Yes |
Tantalum | CV Venus Inti Perkasa | Indonesia | Yes |
Tantalum | Estanho de Rondonia S.A. | Brazil | No |
Tantalum | Ganzhou Huaxing Tungsten Products Co., Ltd. | China | Yes |
Tantalum | HeeSung Metal Ltd. | Korea, Republic Of | Yes |
Tantalum | Hengyang King Xing Lifeng New Materials Co., Ltd. | China | Yes |
Tantalum | Italpreziosi | Italy | Yes |
Tantalum | Jiangxi Ketai Advanced Material Co., Ltd. | China | No |
Tantalum | JiuJiang JinXin Nonferrous Metals Co., Ltd. | China | Yes |
Tantalum | Jiujiang Tanbre Co., Ltd. | China | Yes |
Tantalum | Kennecott Utah Copper LLC | United States | Yes |
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METAL | SMELTER/ REFINER NAME | FACILITY LOCATION | CONFLICT FREE? |
Tantalum | L'Orfebre S.A. | Andorra | Yes |
Tantalum | Metallurgical Products India Pvt., Ltd. | India | Yes |
Tantalum | PT Mitra Stania Prima | Indonesia | Yes |
Tantalum | PT Prima Timah Utama | Indonesia | Yes |
Tantalum | PT Rajehan Ariq | Indonesia | Yes |
Tantalum | PT Timah Tbk Kundur | Indonesia | Yes |
Tin | 8853 S.p.A. | Italy | Yes |
Tin | ACL Metais Eireli | Brazil | Yes |
Tin | Aida Chemical Industries Co., Ltd. | Japan | Yes |
Tin | Argor-Heraeus S.A. | Switzerland | Yes |
Tin | Asahi Refining USA Inc. | United States | Yes |
Tin | Asaka Riken Co., Ltd. | Japan | Yes |
Tin | Bangalore Refinery | India | Yes |
Tin | Boliden AB | Sweden | Yes |
Tin | Estanho de Rondonia S.A. | Brazil | No |
Tin | Ganzhou Huaxing Tungsten Products Co., Ltd. | China | Yes |
Tin | Gejiu Non-Ferrous Metal Processing Co., Ltd. | China | Yes |
Tin | Gejiu Zili Mining And Metallurgy Co., Ltd. | China | No |
Tin | Jiangxi Ketai Advanced Material Co., Ltd. | China | No |
Tin | Metallo Belgium N.V. | Belgium | Yes |
Tin | Metalurgica Met-Mex Penoles S.A. De C.V. | Mexico | Yes |
Tin | O.M. Manufacturing Philippines, Inc. | Philippines | Yes |
Tin | PT Bangka Prima Tin | Indonesia | Yes |
Tin | PT Timah Tbk Kundur | Indonesia | Yes |
Tin | PT Tinindo Inter Nusa | Indonesia | Yes |
Tin | Thaisarco | Thailand | Yes |
Tungsten | 8853 S.p.A. | Italy | Yes |
Tungsten | ACL Metais Eireli | Brazil | Yes |
Tungsten | Advanced Chemical Company | United States | Yes |
Tungsten | Aida Chemical Industries Co., Ltd. | Japan | Yes |
Tungsten | Al Etihad Gold Refinery DMCC | United Arab Emirates | Yes |
Tungsten | Asahi Refining USA Inc. | United States | Yes |
Tungsten | Asaka Riken Co., Ltd. | Japan | Yes |
Tungsten | Bangalore Refinery | India | Yes |
Tungsten | Boliden AB | Sweden | Yes |
Tungsten | Estanho de Rondonia S.A. | Brazil | No |
Tungsten | F&X Electro-Materials Ltd. | China | Yes |
Tungsten | H.C. Starck Inc. | United States | Yes |
Tungsten | HeeSung Metal Ltd. | Korea, Republic Of | Yes |
Tungsten | Kennecott Utah Copper LLC | United States | Yes |
Tungsten | Korea Zinc Co., Ltd. | Korea, Republic Of | Yes |
Tungsten | Metalor USA Refining Corporation | United States | Yes |
Tungsten | MMTC-PAMP India Pvt., Ltd. | India | Yes |
Tungsten | Thaisarco | Thailand | Yes |
Tungsten | White Solder Metalurgia e Mineracao Ltda. | Brazil | Yes |