EX-1.01 2 a15-13080_1ex1d01.htm EX-1.01

Exhibit 1.01

 

Exhibit 1.01 Conflict Minerals Report.

 

I.                                        Introduction

 

We are an online retailer offering a constantly changing mix of hundreds of thousands of products.  We do not actually manufacture any of the products we offer, but have not yet confirmed that we would not be deemed to “contract to manufacture” any of the products we offer that had a completion of manufacture date in calendar year 2014 and that could contain “conflict minerals” as defined in Form SD.  Consequently, as a precautionary measure, we undertook the country of origin inquiry described below and requested that our suppliers of products that we might be deemed to “contract to manufacture” provide us with information on the origin of any conflict minerals contained in any such products they supplied to us.

 

II.                                   Reasonable Country of Origin Inquiry (RCOI)

 

We reviewed our products and suppliers to identify products where we exercise influence on the product content, design or manufacturing, and we identified thirty-two suppliers potentially in scope.  After engaging independent third party consultants and communicating to key suppliers the purpose of the RCOI, we instructed these suppliers to provide answers to the Supply Chain Questionnaire (“Questionnaire”) adapted from the Electronic Industry Citizenship Coalition-Global e-Sustainability Initiative (EICC-GeSI) Conflict Minerals Common Reporting Template reflecting Overstock’s position in the supply chain.  We utilized the EICC-GeSI Conflict Minerals Common Reporting Template because we understand that it was developed by several of the world’s leading consumer electronics companies and that it is generally regarded as the most common reporting tool for conflict minerals content and sourcing information worldwide.  Based on the twenty-two responses we received, sixteen suppliers stated their products contain no 3TG.  Of the remaining six suppliers, four were unable to determine the source of the “necessary conflict minerals” contained in products that we might be deemed to “contract to manufacture”.  Two suppliers indicated they have “necessary conflict minerals” that may have originated in the Democratic Republic of the Congo or an adjoining country. At the same time, the information that we received indicates that any minerals originating in the Democratic Republic of the Congo or an adjoining country were processed by facilities validated as Conflict Free.

 

We believe our RCOI process was reasonably designed and performed in good faith, but there are inherent limitations in the information provided to us by third parties, including the possibility of information being inaccurate, incomplete or falsified despite our efforts to validate and confirm the information.

 

III.                              Design of Due Diligence Framework

 

We designed our due diligence framework to conform in all material respects with the OECD (2013), OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Second Edition, OECD Publishing. http://www.oecd.org/daf/inv/mne/GuidanceEdition2.pdf (“OECD Guidance”). We implemented appropriate elements of the OECD Guidance. The design of our due diligence process conforms to the OECD Guidance applicable to our circumstances and position in the supply chain as a “downstream” company with little to no direct influence on smelters/refiners.

 

IV.                               Due Diligence Measures Performed by Overstock

 

Due diligence measures performed include, but are not limited to, the following:

 

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·                  Reporting to senior management on direct suppliers’ responses to our conflict minerals information requests;

·                  Conducting internal awareness sessions with our merchandising department concerning the commitments and requirements expected of our suppliers;

·                  Gathering and analyzing responses to the Questionnaire; and

·                  Comparing smelters and refiners identified by suppliers to the CFSI lists of validated conflict free and verified facilities and the US Department of Commerce “Reporting Requirements Under Section 1502(d)(3)(C) of the Dodd-Frank Act World-Wide Conflict Mineral Processing Facilities”  (http://www.ita.doc.gov/td/forestprod/DOC-ConflictMineralReport.pdf).

 

V.                                    Product Determination

 

We received inconclusive data from six of our direct suppliers and material source information is still developing.  Therefore, we are unable to make a definitive determination about the source of the tin, tungsten, tantalum or gold in our products.  At the same time, we received no information from these six direct suppliers indicating that the tin, tantalum, tungsten or gold directly or indirectly financed or benefitted armed groups in the DRC or adjoining countries.

 

The table below identifies the smelters/refiners that we believe may have supplied gold to the six suppliers who provided inconclusive data to us, and the location of the facility.

 

Metal

 

Smelter/Refiner Name

 

Sourcing Status

 

Facility Location

Gold

 

Rand Refinery (PTY) Ltd

 

Validated as Conflict Free

 

South Africa

Gold

 

Heraeus Ltd. Hong Kong

 

Validated as Conflict Free

 

China

Gold

 

Valcambi SA

 

Validated as Conflict Free

 

Switzerland

Gold

 

Republic Metals Corporation

 

Validated as Conflict Free

 

USA

 

 

Identified Countries of Origin:

 

DRC- Congo (Kinshasa), Ghana, Guinea, Mali, Namibia, South Africa, Tanzania, Canada, China, Hong Kong, Australia, France, Germany, Japan, Laos, Malaysia, Mozambique, Peru, Philippines, Singapore, Switzerland, Taiwan, Thailand

 

 

 

 

 

VI.                               Product Description

 

The products subject to this disclosure are furniture, home décor, housewares, jewelry and watches, and Worldstock products.

 

VII.                          Independent Private Sector Audit (IPSA)

 

Not required for the reporting period from January 1 to December 31, 2014.

 

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