EX-1.01
Published on May 29, 2015
Exhibit 1.01
Quanta Services, Inc.
Conflict Minerals Report
(for the Year Ended December 31, 2014)
This Conflict Minerals Report for Quanta Services, Inc. (the Company, Quanta, we or our) for the calendar year ended December 31, 2014 is filed in compliance with the reporting requirements of Rule 13p-1 promulgated under the Securities Exchange Act of 1934, as amended. Certain terms included in this Conflict Minerals Report are defined within Rule 13p-1 and Release No. 34-67716 issued by the Securities and Exchange Commission (the SEC) on August 22, 2012. Therefore, please refer to those sources for such definitions. A copy of this Conflict Minerals Report can be found on our website at www.quantaservices.com.
I. | Applicability of Rule 13p-1 |
For the calendar year ended December 31, 2014, the Company determined that one of its subsidiaries was subject to Rule 13p-1 as a result of manufacturing or contracting to manufacture products for sale to third parties reasonably believed to contain tin, tantalum, tungsten and/or gold (the Conflict Minerals), where such Conflict Minerals are necessary to the functionality or production of such products.
II. | Reasonable Country of Origin Inquiry |
The Company does not source any Conflict Minerals used in the production of its products directly from any smelters or refiners. However, we identified 104 suppliers from whom we purchased components containing necessary Conflict Minerals (the Subject Suppliers). After identifying this group, we conducted a reasonable country of origin inquiry (RCOI) to determine whether any of the Conflict Minerals originated in the Democratic Republic of the Congo or an adjoining country or whether they came from recycled or scrap sources. The Company and its third party conflict minerals service provider engaged in a systematic outreach to all Subject Suppliers, utilizing the Conflict-Free Sourcing Initiatives Conflict Minerals Reporting Template, developed by the Electronic Industry Citizenship Coalition and the Global e-Sustainability Initiative, to request confirmation of the presence of Conflict Minerals in the raw materials or components they supplied to the Company and information regarding the country and facility of origin of any such Conflict Minerals.
Specifically, our efforts included sending to each Subject Supplier an initial communication containing the reporting template and providing access to an engagement portal with various educational resources intended to facilitate their understanding of the RCOI process and the reporting template questions. After establishing an initial deadline for return of completed reporting templates, we sent several follow-up requests to non-responsive Subject Suppliers (including by telephone and email). We ultimately received responses from approximately 59% of the Subject Suppliers. We reviewed the responses for plausibility and consistency and requested additional information needed to clarify any responses. The smelter and refiner information collected was compared against our service providers smelter/refiner database, which contains companies that are known metal processors, companies that are exclusive recyclers, countries of origin for certain mines, and conflict-free certification status for certain smelters and refiners.
Based on the results of our RCOI, we have reason to believe that the Conflict Minerals necessary to one of more of the Companys products may have originated within the DRC or an adjoining country and are not from recycled or scrap sources. As such, we conducted further due diligence as described below.
III. | Due Diligence Measures Performed |
The Companys due diligence program was designed based on the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (the OECD Framework), an internationally recognized due diligence framework. As an initial step in our program, we established an internal, cross-functional team and internal reporting processes to identify the presence of all Conflict Minerals within Quantas supply chain and to determine the applicability of Rule 13p-1.
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Additionally, as mentioned above, we engaged a third party conflict minerals service provider to identify and assess risk in our supply chain and to compile and review available information on smelters and refiners in our supply chain. We utilized the reporting templates distributed as part of our RCOI process as a preliminary means to identify the smelters and refiners in our supply chain. Based on the responses we received from the Subject Suppliers, we determined that approximately 14% of the verified smelters and refiners required further diligence on the source and chain of custody of the Conflict Minerals processed at those facilities. This determination was based on responses indicating that a Subject Supplier or its supply chain was known or thought to source Conflict Minerals from the Democratic Republic of Congo or an adjoining country or that Conflict Minerals were sourced from countries which are not known to have reserves.
After establishing the smelters and refiners in our supply chain, we sought to determine those that are certified as conflict-free. To make this determination we relied on internationally accepted audit standards, including the CFSI Conflict-Free Smelter Program. If a smelter or refiner was not certified by such a standard, we undertook further steps to obtain information about its sourcing practices, including countries of origin and transfer, and to determine whether the smelter or refiner maintains internal due diligence procedures or other processes that track the chain of custody of its minerals. In these respects, we reviewed whether the facility has a documented, effective and communicated conflict-free policy, whether the facility has an accounting system to support a mass balance of materials processed, and whether the facility retains traceability documentation. To obtain this information we made up to three attempts to contact each smelter or refiner and reviewed publicly available information.
On an annual basis, we plan to review the risk identified in our supply chain and respond to such risk as necessary. We also produce this annual Conflict Minerals Report, which describes our supply chain due diligence processes and findings in detail and is filed with the SEC and posted on our website at www.quantaservices.com.
IV. | Independent Private Sector Audit and Risk Mitigation |
As permitted under paragraph (c)(1)(iv) and Instruction 2 to Item 1.01 of Form SD, this Conflict Minerals Report was not audited by an independent private sector auditor.
With respect to the products we manufacture or contract to manufacture for sale to third parties that are reasonably believed to contain Conflict Minerals (described in further detail below), we undertake to complete the following steps to mitigate the risk that such Conflict Minerals directly or indirectly finance or benefit armed groups: continue to assess the presence of Conflict Minerals in our supply chain; continue to improve our due diligence procedures for identifying the country of origin of all necessary Conflict Minerals; engage our direct suppliers that have not responded to our requests for Conflict Minerals reporting information, targeting a 100% response rate; and conduct an audit of our Conflict Minerals due diligence measures to determine whether they conform, in all material respects, to the criteria set forth in the OECD Framework.
V. | Results of Due Diligence Performed and Product Description |
After completion of our due diligence process for the calendar year ended 2014, we determined that certain of our necessary Conflict Minerals did not originate in the Democratic Republic of the Congo or an adjoining country or originated from recycled or scrap sources. However, we were unable to obtain sufficient information to fully identify all the processing facilities utilized to produce our necessary Conflict Minerals or all the countries of origin of our necessary Conflict Minerals.
The products we manufacture or contract to manufacture for sale to third parties that are reasonably believed to contain Conflict Minerals include certain pipeline inspection tools and downhole inspection tools, and the Conflict Minerals are utilized predominantly in the form of electrical components within these tools (e.g., integrated circuits, resistors, printed circuit boards and electrical connectors. Our efforts to determine the mine or location of origin of the necessary Conflict Minerals with the greatest possible specificity are set forth above under Due Diligence Measures Performed. Set forth below are the processing facilities and countries of origin that the Company has been able to confirm based on the information provided by our Subject Suppliers and our subsequent due diligence.
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Because Quanta is a downstream user of Conflict Minerals, we must rely on the representations and information provided by our Subject Suppliers and other third parties within our supply chain. As a result, incomplete or inaccurate information provided by the Subject Suppliers or by a smelter or refiner could affect the accuracy or completeness of the information set forth below or other information contained in this Conflict Minerals Report.
Processing Facilities
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* | Smelter certified as conflict-free by the CFSI Conflict-Free Smelter Program as of April 30, 2015. |
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Countries of Origin
Angola |
Morocco | |
Argentina |
Mozambique | |
Armenia |
Myanmar | |
Australia |
Nambia | |
Austria |
Netherlands | |
Belarus |
Niger | |
Belgium |
Nigeria | |
Bermuda |
Papua New Guinea | |
Bolivia |
Peru | |
Brazil |
Philippines | |
Burundi |
Poland | |
Canada |
Portugal | |
Chile |
Russia | |
China |
Rwanda | |
DRC Congo (Kinshasa) |
Saudi Arabia | |
Estonia |
Sierra Leone | |
Ethiopia |
Singapore | |
France |
South Africa | |
Germany |
South Korea | |
Ghana |
Spain | |
Guinea |
Suriname | |
Guyana |
Sweden | |
Hong Kong |
Switzerland | |
India |
Taiwan | |
Indonesia |
Tajikistan | |
Italy |
Tanzania | |
Japan |
Thailand | |
Jersey |
Turkey | |
Kazakhstan |
United Arab Emirates | |
Kyrgyzstan |
United Kingdom | |
Laos |
United States of America | |
Malaysia |
Uzbekistan | |
Mali |
Vietnam | |
Mexico |
Zambia | |
Mongolia |
Zimbabwe |
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