UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SD
Specialized Disclosure Report
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WESCO International, Inc. |
(Exact name of registrant as specified in its charter) |
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Delaware | 001-14989 | 25-1723342 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) |
225 West Station Square Drive Suite 700 Pittsburgh, Pennsylvania | | 15219 |
(Address of principal executive offices) | | (Zip Code) |
Kenneth S. Parks (412) 454-2200 |
(Name and telephone number, including area code, of the person to contact in connection with this report.) |
Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:
√ Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1 for the reporting period from January 1 to December 31, 2014.
Section 1 – Conflict Minerals Disclosure
Item 1.01 Conflict Minerals Disclosure and Report
WESCO International, Inc. (WESCO) presents this disclosure for the year ending December 31, 2014, to comply with Rule 13p-1 under the Securities Exchange Act of 1934 (the Rule), which requires public companies to disclose the use of conflict minerals and whether they have been sourced from the Democratic Republic of Congo (DRC), Angola, Burundi, Central African Republic, the Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda and Zambia (Covered Countries). Conflict Minerals are defined as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are limited to tin, tantalum, tungsten, and gold (“conflict minerals”).
Where WESCO discovered conflict minerals necessary to the functionality or production of products manufactured by WESCO or contracted to be manufactured by WESCO for the year 2014, WESCO conducted a good faith reasonable country of origin inquiry (RCOI) regarding those conflict minerals. The investigation was reasonably designed to determine whether any of the conflict minerals originated in the Covered Countries or were from recycled or scrap sources.
Based on that RCOI, WESCO was unable to determine the country of origin of those conflict minerals. Therefore, WESCO prepared a Conflict Minerals Report (CMR) describing such due diligence measures and attached the CMR as an Exhibit to Form SD hereto.
For reporting year 2014, an independent private sector audit is not required, and therefore, WESCO did not subject the CMR for independent private sector audit.
A copy of WESCO’s Conflict Minerals Report for the reporting period from January 1, 2014 to December 31, 2014 is filed as Exhibit 1.01 hereto and is publicly available at http://wesco.investorroom.com, under the separate heading “Conflict Minerals Disclosure.” The content of any website referred to in this Form SD is included for general information only and is not incorporated by reference in this Form SD.
Item 1.02 Exhibit
A copy of WESCO’s Conflict Minerals Report is provided as Exhibit 1.01 hereto.
Section 2 – Exhibits
Item 2.01 Exhibits
Exhibit 1.01 – Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the duly authorized undersigned.
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WESCO International, Inc. |
(Registrant) |
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/s/ Kenneth S. Parks | | May 29, 2015 |
By Kenneth S. Parks Senior Vice President and Chief Financial Officer
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Exhibit 1.01
WESCO International, Inc.
Conflict Minerals Report
For the Reporting Period Ending December 31, 2014
1. Company Overview
WESCO is a North American-based distributor of products and provider of advanced supply chain management and logistics services used in industrial, construction, utility and commercial, institutional and government markets. WESCO’s primary distribution product categories include general electrical and industrial supplies, wire, cable and conduit, data and broadband communication, power distribution equipment, lighting and lighting control systems, control and automation, and motors. In its primary role as a distributor, WESCO is not manufacturing or contracting to manufacture, and is therefore not subject to the conflict minerals rule. However, in a very small portion of its business, WESCO is manufacturing or contracting to manufacture within the scope of the conflict minerals rule. The following represent product categories where WESCO is manufacturing or contracting to manufacture: hardware and fasteners, enclosures, machined cable assemblies, grounding grids and audio visual equipment. The direct suppliers supporting the production of these product categories were included in the due diligence process detailed within the CMR.
1.1.a Supply Chain
WESCO relied on its suppliers to provide information on the origin of the conflict minerals contained in the relevant components and materials supplied to WESCO. In its efforts to comply with the disclosure requirements and obtain the accurate data from its suppliers, WESCO contacted suppliers who manufactured or contracted to manufacture products where the nature of the product supplied to WESCO was considered to be reasonably likely to contain conflict minerals. In addition to providing WESCO the requisite data for its SEC reporting, the data collected is further analyzed by WESCO to determine the origin of conflict minerals in WESCO’s supply chain and WESCO’s path moving forward with regard to conflict-free sourcing. As WESCO enters into new contracts with suppliers, WESCO intends to add language requiring suppliers to provide WESCO information regarding the origin of any conflict minerals and related smelters. In addition, WESCO has modified its standard terms and conditions of purchase to require the same information. Over time, these contractual measures are intended to improve consistency and transparency in WESCO’s supply chain.
WESCO is typically many tiers downstream in the supply chain from the source of the raw minerals. Based on the responses from its suppliers, WESCO was unable to determine the origin of the conflict minerals in its manufactured or contracted to manufacture products, and, in some cases, whether they even contain conflict minerals. Therefore, WESCO cannot exclude the possibility that some may have originated in the Covered Countries. For the products that WESCO is manufacturing or contracting to manufacture and which are subject to the reporting obligations of Rule 13p-1, WESCO was unable to determine the origin of the conflict minerals they may contain and/or to determine whether they come from recycled or scrap sources; the facilities used to process them; their country of origin; or their mine or location of origin.
Therefore, for reporting year 2014, WESCO is submitting this Conflict Minerals Report (CMR) as Exhibit 1.01 to Form SD. In accordance with the OECD Guidance and the Conflict Minerals Rule, this report is available on WESCO’s website, http://wesco.investorroom.com.
1.1.b Conflict Minerals Policy
WESCO has adopted a conflict minerals policy outlining WESCO’s intent to conduct due diligence within the standards set forth by the Rule.
2. Due Diligence Process
2.1 Conflict Minerals Program
WESCO has conducted due diligence to identify and trace the conflict minerals in its supply chain using the template developed by the Electronic Industry Citizenship Coalition® (EICC®) and the Global e-Sustainability Initiative (GeSI), known as the Conflict Minerals Reporting Template (CMRT), and the guidance provided by the Organization for Economic Co-operation and Development (OECD) in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. WESCO has engaged Foresite, a third party supply chain compliance resource, to assist in WESCO’s data collection and compliance with the rule and its requirements and to populate the Foresite Global Environmental Management System (GEMS) with supplier data to foster transparency in WESCO’s supply chain. The WESCO due diligence program is comprised of the following actions:
2.1.a Collecting Data to Trace Conflict Minerals in WESCO’s Supply Chain
WESCO has adopted the CMRT in collecting its supplier data, and WESCO has contacted suppliers of products WESCO manufactured or contracted to manufacture via Foresite. Non-responsive suppliers or suppliers who provided incomplete or inadequate responses were contacted on multiple occasions in an effort to obtain accurate data collection for the reporting period. The supplier data has been uploaded into GEMS to allow WESCO licensed users to view, analyze, and document the overall progress of WESCO’s data collection efforts. WESCO intends to continue to add supplier information to this database as suppliers respond.
2.1.b Evaluating Supplier Data
WESCO plans to continue to analyze the data provided by the suppliers of products manufactured or contracted to be manufactured to determine whether those products contain conflict minerals from the Covered Counties. WESCO is attempting to identify the smelters in its supply chain based on the information gathered through the CMRT to determine whether the smelters have been certified as conflict free. By utilizing the annual disclosure and inserting disclosure requirements into its supplier contracts, WESCO intends to facilitate supply chain compliance with the conflict minerals rule.
2.1.c Following OECD Guidance
WESCO intends to follow the OECD guidance in its due diligence program and implementation.
2.1.d Reporting
WESCO expects to comply with the SEC reporting requirements on or before the deadline for submission of May 31st following each annual reporting period.
2.2 Management Systems
WESCO has adopted a company Conflict Minerals Policy describing WESCO’s intent to conduct due diligence within the Rule.
2.2.a Internal Team
WESCO has established a system for conflict minerals which includes a cross-functional internal team. The internal team is responsible for identifying WESCO’s products that are subject to the rule and implementing WESCO’s conflict minerals policy. The team is led by a conflict minerals Project Manager, who serves as a central point of contact across WESCO.
2.2.b Control Systems
WESCO’s controls include use of the Foresite GEMS platform to archive WESCO’s supplier declarations, oversight and direction by the Project Manager, and conflict minerals contractual provisions included in new supplier agreements and purchase orders.
2.2.c Supplier Engagement
With respect to the OECD requirement to strengthen engagement with suppliers, WESCO has engaged its suppliers by communications delivered via Foresite and by working with suppliers directly. In addition, as part of WESCO’s supplier engagement efforts, supplier training was conducted by Foresite with suppliers to provide them the information they needed to respond to WESCO’s disclosure requests, and suppliers could submit questions and comments designed to clarify or improve the process.
2.2.d Maintain Records
WESCO has licensed the Foresite GEMS application to archive its supplier declarations, providing evidence of its due diligence process. Licensed WESCO users, which are part of the internal team above, maintain access and the ability to review the CMRTs and information disclosed by the suppliers.
2.3 Identify and Assess Risk in the Supply Chain
WESCO evaluated its business activities as they relate to the conflict minerals rule. As a result of its evaluation, WESCO identified suppliers for products WESCO is manufacturing or contracting to manufacture that may contain conflict minerals, and WESCO contacted those suppliers. A portion of the suppliers provided disclosures with information about the existence of and source of conflict minerals contained in the components or materials supplied to WESCO.
2.4 Design and Implement a Strategy to Respond to Risks
The internal team meets on a regular basis to discuss the strategy, any issues, and WESCO’s path moving forward. As described herein, WESCO has engaged its suppliers where WESCO reasonably believed that products it manufactured or contracted to manufacture contained conflict minerals. WESCO has been unable to determine with certainty whether ultimate sources of conflict minerals may support conflict in the Covered Countries. If WESCO were to determine with certainty that a supplier was supplying conflict minerals from a source supporting such conflict, WESCO would work to establish an alternative source of conflict minerals that does not support such conflict, as provided in the OECD guidance.
WESCO intends to continue to work with Foresite and its supply chain to request and obtain current and accurate disclosure data from its suppliers in order to promote transparency in the supply chain.
2.5 Carry out Independent Third Party Audit of Supply Chain Due Diligence at Identified Points in the Supply Chain
Because WESCO is typically many tiers downstream from the raw materials source, it does not have a direct relationship with any conflict minerals smelters and refiners and WESCO does not conduct audits of these entities.
3. Due Diligence Results
3.1 Request Information
Relevant suppliers were contacted by Foresite and asked to disclose the use and source of any conflict minerals using the CMRT. The WESCO internal team was involved with the communications and in the response results. WESCO further directed Foresite in escalation efforts for those suppliers failing to respond or providing an incomplete or
insufficient response. In addition, WESCO was able to track the response rate and content throughout the data collection process.
3.2 Survey Responses
WESCO and/or Foresite contacted relevant suppliers by email communication at least three times. Supplier training was provided within the time frame, providing the suppliers direction and guidance in completing their response. Suppliers that did not reply after three email communications received an escalation email, an individual request, and, finally, a phone call. Templates were reviewed for completion and consistency, and those that were incorrectly or insufficiently completed were escalated to the internal team for resolution. Suppliers were directly contacted to resolve issues as needed.
The large majority of the responses received provided data at a company or divisional level disclosure and were unable to specify the smelters or refiners used for components supplied to WESCO. In addition, some suppliers did not respond or refused to do so, despite repeated requests. WESCO is therefore unable to determine whether any of the conflict minerals reported by those suppliers were contained in components or parts supplied to WESCO or to validate that any of these smelters or refiners are actually in WESCO’s supply chain. In some cases, WESCO is unable to determine whether the product even contained conflict minerals.
3.3 Efforts to Determine Mine or Location of Origin
WESCO believes it has expended reasonable efforts to determine the mine or origin of conflict minerals in products it manufactured or contracted to manufacture through its engagement of Foresite and licensing of GEMS to archive WESCO’s supplier declarations, in requesting its suppliers to complete the CMRT, reviewing their responses, and in implementing the OECD guidance.
Because WESCO is typically many tiers downstream from the raw material source, it relies on its suppliers to provide information on the origin of conflict minerals. WESCO’s suppliers were primarily unable to represent to WESCO that conflict minerals from the processing facilities or smelters they listed had actually been included in components they supplied to WESCO. Therefore, WESCO is not able to include smelter names in this report.
4. Steps to be Taken to Mitigate Risk
WESCO intends to take the following steps to improve WESCO’s due diligence process and to facilitate a conflict-free supply chain:
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a. | Identify those products manufactured or contracted to manufacture by WESCO and request conflict mineral disclosure from such suppliers. |
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b. | Scrutinize the data received from suppliers to identify potential risks, inconsistencies, and incomplete or incompatible data. |
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c. | Engage WESCO suppliers indicating they are using conflict minerals from the Covered Countries to promote conflict-free sourcing or seek alternative sources of supply. |
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d. | Continue to engage and train suppliers in an effort to improve compliance, increase response rate and content, and promote conflict-free sourcing. |
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e. | Include appropriate conflict mineral clauses in new supplier agreements and in purchase order contracts. |
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f. | Track the interpretation and direction of the conflict mineral rule as it relates to industry practices. |
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