EX-1.02 2 d734930dex102.htm EX-1.02 EX-1.02

Exhibit 1.02

PACCAR Inc Conflict Minerals Report for Calendar Year 2013

PACCAR Inc (“PACCAR”) has prepared this report in accordance with Rule 13p-1 under the Securities Exchange Act of 1934 (“Rule 13p-1”), which implements the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 for disclosure by registrants concerning the use of Conflict Minerals (gold, tin, tungsten or tantalum) in their products.

PACCAR Products

PACCAR manufactures commercial vehicles sold worldwide under the Kenworth, Peterbilt and DAF nameplates, and industrial winches sold under the Braden, Carco and Gearmatic nameplates. Additional information regarding these products may be found at PACCAR.com and in its Form 10-K.

Due Diligence

PACCAR is committed to compliance with Rule 13p-1’s requirements concerning Conflict Minerals. A copy of PACCAR’s Conflict Minerals Policy can be found at paccar.com/company/corporateresponsibility/conflict-minerals-policy.asp.

PACCAR has implemented a due diligence process to assure that any Conflict Minerals in its products sourced from the Democratic Republic of the Congo or adjoining countries (the “Conflict Area”) are certified not to benefit armed groups (“Conflict-Free”). PACCAR’s due diligence process is based on the Organisation for Economic Cooperation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Second Edition (OECD 2013).

The Company formed a committee to lead its due diligence efforts. The committee reviewed the requirements of Rule 13p-1 and developed a plan for complying with its requirements, which included initiating best practices, benchmarking with other original equipment manufacturers (OEMs) and key suppliers, and developing internal structures to support the development and implementation of those efforts.

After determining that Conflict Minerals were necessary to the production or function of its products, PACCAR conducted a reasonable country of origin inquiry (RCOI) and, as necessary, further due diligence, to determine if any Conflict Minerals contained in its products originated in the Conflict Area from sources not certified as Conflict-Free. The inquiry and due diligence included the following steps:

PACCAR adopted the RCOI approach developed through the efforts of the Automotive Industry Action Group (AIAG), and the Conflict Free Smelter (CFS) program developed by the Electronic Industry Citizenship Coalition, Incorporated (EICC) and the Global e-Sustainability Initiative (GeSI). To increase consistency and minimize duplicate efforts in the reports requested from suppliers, PACCAR is registered and uses the i-POINT Conflict Minerals Platform (iPCMP) to conduct its RCOI with its suppliers and to report conflict mineral information using the EICC-GeSI template. iPCMP is endorsed by the AIAG and


many automotive OEMs, and is used by their Tier 1 suppliers, many of whom also supply the commercial vehicle and capital goods markets. iPCMP software interprets the responses provided by the suppliers and flags missing information or areas of concern where additional due diligence may be required. The RCOI process requests the names of smelters and refiners used by suppliers to source the Conflict Minerals and provides periodic updates to the database of compliant CFS smelters. PACCAR issued RCOI requests to its more than 1100 production suppliers worldwide using the iPCMP tool and EICC-GeSI template.

For the period from January 1 through December 31, 2013, PACCAR received responses from suppliers representing nearly three quarters of the total cost of its production purchases. These suppliers, in turn, were dependent on their own suppliers for information as to locations of smelters and mines used to produce Conflict Minerals in their products. From the responses received from its suppliers to date, PACCAR has not been able to fully determine the specific mines and smelters that processed the Conflict Minerals used in its products.

Activity Since Year End 2013

PACCAR is continuing to work with suppliers, through the processes described above, to identify the sources of Conflict Minerals in its products. The use of iPCMP software helps PACCAR perform due diligence by identifying high risk RCOI reporting and information missing from supplier responses. Issues flagged provide the focus for additional due diligence or risk mitigation activities with a select group of suppliers. PACCAR will continue to work with its suppliers to develop an approach consistent with OECD guidance, to identify Conflict Minerals sourced from the Conflict Area, and take reasonable steps to avoid their inclusion in its supply chain unless they are Conflict-Free.