EX-1.01 2 a201612dec31conflictminera.htm CONFLICT MINERALS REPORT Exhibit

Exhibit 1.01

The Boeing Company
Conflict Minerals Report
For The Year Ended December 31, 2016

I. Overview
This report has been prepared by The Boeing Company (herein referred to as “Boeing,” the “Company,” “we,” “us,” or “our”) pursuant to Rule 13p-1 (the “Rule”) promulgated under the Securities Exchange Act of 1934, as amended. Boeing is one of the world’s largest aerospace firms. Our principal products include commercial jet aircraft, manned and unmanned military aircraft, rotorcraft and tilt-rotor aircraft, as well as missile and weapons systems, satellites and launch vehicles. We conducted an analysis of our products and found that small quantities of one or more of tin, tantalum, tungsten and gold (“3TG”) are found in substantially all of Boeing’s products.
The aircraft and other products that we manufacture are highly complex, typically containing thousands of parts from thousands of direct and indirect suppliers. Boeing has relationships with a vast network of suppliers throughout the world and there are generally multiple tiers between the 3TG mines and our direct suppliers. Therefore, we rely on our direct suppliers to work with their upstream suppliers in order that they provide us with accurate information about the origin of 3TG in the materials, components, parts and subassemblies (collectively, “Components”) we purchase. As we enter into new contracts or renew existing contracts, we are requiring our suppliers, on a prospective basis, to provide us with the 3TG information necessary to conduct our due diligence. However, during the term of contracts executed before we imposed this requirement we cannot compel these suppliers to support our due diligence efforts with respect to 3TG content.

II. Reasonable Country of Origin Inquiry (“RCOI”)

We conducted an inquiry of our suppliers to determine the Country of Origin of the products provided to Boeing. Measures taken to make the determination were in accordance with Step 2 of the Due Diligence Guidance for Responsible Supply Chains of Minerals From Conflict-Affected and High-Risk Areas of the Organisation for Economic Cooperation and Development (“OECD”) and its supplements on tin, tantalum, and tungsten and on gold (“OECD guidance”; “OECD Step 2”). Our RCOI included identification of relevant suppliers, survey of suppliers and assessment of data received from suppliers.

We requested that all of our suppliers of Components that we believe could contain 3TG provide information to us using the template developed by the Conflict-Free Sourcing Initiative, known as the Conflict Minerals Reporting Template (the “Template”). The Template was developed to facilitate disclosure and communication of information regarding smelters and refiners that provide 3TG to a manufacturer’s supply chain. It includes questions regarding a direct supplier’s conflict-free policy and its due diligence process, and requests information about its supply chain for 3TG, such as the names and locations of smelters and refiners, as well as the country of origin of 3TG used by such smelters and refiners. The information we receive is submitted into an electronic database to facilitate information analysis.


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OECD Step 1. Establish Strong Company Management Systems
Conflict Minerals Policy
Boeing has adopted a conflict minerals policy related to our sourcing of 3TG. The policy is available to the public on www.boeingsuppliers.com.
Internal Team
Boeing has established a management system to support supply chain due diligence related to 3TG. Our management system includes a team of subject matter experts from functions such as supplier management, engineering, finance, law, global corporate citizenship, and our Boeing International organization. The team of subject matter experts is responsible for implementing our conflict minerals compliance strategy.
Control Systems
Together with other major manufacturers in aerospace and other sectors, we were members for the year covered by this report of the following initiatives that are working to develop conflict-free supply chains: the Conflict-Free Sourcing Initiative, the International Tin Research Institute Tin Supply Chain Initiative, the Public Private Alliance for Responsible Minerals Trade and the Aerospace Industry Association Conflict Minerals Working Group.
We have established and maintain a records retention policy with respect to relevant documentation.
Supplier Engagement
Our supplier advisory team, which includes representatives from a number of management functions within Boeing as well as representatives of certain of our suppliers, holds periodic meetings to discuss best practices among our suppliers. We also maintain an electronic portal that provides detailed instructions to suppliers and resources related to conflict minerals, including the Template, our conflict minerals policy, as well as FAQs from the Aerospace Industry Association and the U.S. Securities and Exchange Commission.
Grievance Mechanism
We have processes to receive and act on concerns - written or oral - expressed by employees and others about possible improper or unethical business practices or violations of company policies (including our Code of Conduct, Code of Basic Working Conditions and Human Rights, and Conflict Minerals Policy), laws, or regulations.
OECD Step 2.    Identify and Assess Risks in the Supply Chain
The vast majority of the suppliers that responded to our request set forth data only with respect to that supplier’s overall 3TG sourcing, without specifying whether such 3TG was used in Components actually supplied to Boeing. Therefore, the RCOI did not provide us with sufficient information to determine the source of the 3TG in our products. Accordingly, we conducted due diligence on the source and chain of custody of 3TG in our products.
III. Due Diligence Design and Performance
Design of Due Diligence
Pursuant to the Rule, we performed due diligence on the source and country of origin of 3TG in our products, including the Components we purchase from suppliers. Our due diligence measures have been designed to conform with the due diligence framework presented in OECD guidance and its supplements.

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Due Diligence Performed
We performed due diligence measures in accordance with the framework established by the OECD.
OECD Step 3. Design and Implement a Strategy to Respond to Identified Risks
Senior management is briefed about our due diligence efforts on a regular basis through the Compliance Risk Management Board, chaired by the Company’s Senior Vice President, Office of Internal Governance and Administration.
We have implemented a risk management plan that outlines the Company responses to identified risks.
We regularly assess identified risks, largely relying on suppliers’ annual data submissions to us, as well as, where appropriate, targeted follow-up activities. There was no instance where we determined that it was necessary to implement risk mitigation efforts, temporarily suspend trade or disengage with a supplier.
OECD Step 4. Carry Out Independent Third-Party Audit of Smelter/Refiner’s Due Diligence Practices
We support all aspects of the 3TG smelters and refiners audit scope through our membership in the Conflict-Free Smelter Initiative (Member Code: BOEI). In addition, we serve on its Steering Committee and participate in the Due Diligence Practices Group.
OECD Step 5.    Report Annually on Supply Chain Due Diligence

This Conflict Minerals Report constitutes our annual report on our 3TG due diligence, is available on our website www.boeing.com and is filed with the U.S. Securities and Exchange Commission.
IV. Due Diligence Results
We reviewed all of the supplier responses, including those not provided on the Template, against criteria developed by our internal team to determine whether further due diligence engagement was necessary. Our criteria included reviewing incomplete responses as well as inconsistencies within the data reported by our suppliers, and we have worked directly with them in an effort to secure further responses.
The vast majority of the suppliers that responded to our request set forth data only with respect to that supplier’s overall 3TG sourcing, without specifying whether such 3TG was used in Components actually supplied to Boeing. A minority of responses listed specific smelters or refiners in their supply chain, with such responses collectively identifying 317 unique facilities as identified by the Conflict-Free Smelter Program (CFSP) of which 246 were included on the CFSP Compliant Smelters & Refiners List.

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In response to our request, 45 suppliers indicated that they may have sourced 3TG from the Democratic Republic of the Congo (the “DRC”) and its adjoining countries (the “Covered Countries”). Of these, one supplier was able to trace 3TG to Components supplied to Boeing. However, it was unable to identify the country of origin. This supplier provided the following information about the smelters used to process 3TG:
 
3TG
Smelter or Refiner
Smelter or Refiner Location
CFSI ID *
1
Tantalum
Changsha South Tantalum Niobium Co., Ltd.
China
CID000211
2
Tantalum
Conghua Tantalum and Niobium Smeltery
China
CID000291
3
Tantalum
D Block Metals, LLC
United States
CID002504
4
Tantalum
Duoluoshan
China
CID000410
5
Tantalum
Exotech Inc.
United States
CID000456
6
Tantalum
F&X Electro-Materials Ltd.
China
CID000460
7
Tantalum
Global Advanced Metals Aizu
Japan
CID002558
8
Tantalum
Global Advanced Metals Boyertown
United States
CID002557
9
Tantalum
H.C. Starck Co., Ltd.
Thailand
CID002544
10
Tantalum
H.C. Starck GmbH Goslar
Germany
CID002545
11
Tantalum
H.C. Starck Hermsdorf GmbH
Germany
CID002547
12
Tantalum
H.C. Starck Inc.
United States
CID002548
13
Tantalum
H.C. Starck Ltd.
Japan
CID002549
14
Tantalum
H.C. Starck Smelting GmbH & Co. KG
Germany
CID002550
15
Tantalum
Hengyang King Xing Lifeng New Materials Co., Ltd.
China
CID002492
16
Tantalum
JiuJiang JinXin Nonferrous Metals Co., Ltd.
China
CID000914
17
Tantalum
LSM Brasil S.A.
Brazil
CID001076
18
Tantalum
Mineração Taboca S.A.
Brazil
CID001175
19
Tantalum
Ningxia Orient Tantalum Industry Co., Ltd.
China
CID001277
20
Tantalum
Zhuzhou Cemented Carbide Group Co., Ltd.
China
CID002232
* Each smelter or refiner (SoR) identified above was included on the CFSP Compliant Smelters & Refiners List.
The remaining suppliers that provided SoRs were unable to verify that 3TG from those SoRs was used in Components supplied to Boeing, and therefore the SoRs they reported are excluded from this report.
For the reasons set forth above, our supply chain was unable to identify the country of origin of 3TG contained in Components supplied to us or the facilities used to process such 3TG.

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V. Expected Future Actions
We intend to continue the following actions to improve the due diligence we conduct to further mitigate the risk that the 3TG in our products benefit armed groups in the Covered Countries:
Include a conflict minerals provision in new or renewed contracts requiring that suppliers provide us with the necessary 3TG information on a prospective basis.
Direct our suppliers to information and training resources in an effort to increase the response rate and improve the content of the supplier survey responses.
Participate in the Conflict-Free Sourcing Initiative in order to increase the number of smelters and refiners participating in the CFSP.
Work with the OECD and relevant trade associations to define and improve best practices and encourage responsible sourcing of 3TG.
Make additional investments in Conflict Minerals due diligence toolsets.
In the event that any of our suppliers are found to be providing us with Components containing 3TG from sources that support conflict in the Covered Countries, work with them to establish alternative sources of 3TG.
Caution Concerning Forward-Looking Statements
Certain statements in this report may be “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “intends,” “expects,” “plans,” “believes,” “estimates,” “anticipates,” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future plans, and any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from these forward-looking statements. As a result, these statements speak only as of the date they are made and we undertake no obligation to update or revise any forward-looking statement, except as required by federal securities laws.

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