EX-1.02 2 conflictmineralsreport.htm CONFLICT MINERALS REPORT Conflict Minerals Report
Exhibit 1.02

CERNER CORPORATION

Conflict Minerals Report
For the reporting period from January 1, 2013 to December 31, 2013

This Conflict Minerals Report (this "Report") of Cerner Corporation and its consolidated subsidiaries (the "Company") has been prepared pursuant to Rule 13p-1 (the "Rule") promulgated by the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as amended, for the reporting period January 1, 2013 to December 31, 2013.

The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products, and “Conflict Minerals” originating in the “Covered Countries” are necessary to the functionality or production of those products. The specified minerals, which we collectively refer to in this Report as the "Conflict Minerals," are gold, columbite-tantalite (coltan), cassiterite and wolframite, including their derivatives, which are limited to tantalum, tin and tungsten. The "Covered Countries" for the purposes of the Rule and this Report are the Democratic Republic of the Congo, the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola.

The process of determining whether the Rule applies to a particular registrant is highly complex and involves many subjective determinations that are necessarily dependent upon the particular facts and circumstances of the registrant's business and products. For instance, under applicable SEC guidance, the determination as to whether a registrant has "contracted to manufacture a product" depends upon the degree of influence of the registrant over the manufacturing of the product, the analysis of which is necessarily subjective in nature. Similarly, SEC guidance directs registrants to make a facts-and-circumstances determination as to whether a Conflict Mineral is "necessary to the functionality or production of a product." The Company has conducted a good faith and reasonable analysis as to the application of the Rule to the Company's business and products based upon available SEC guidance. As a result of this analysis, the Company has determined that certain of its operations described below may be deemed to manufacture, or contract to manufacture, products that are believed to contain Conflict Minerals that may be necessary to the functionality or production of those products for purposes of the Rule. The Company's determinations with respect to the products described in this Report for the reporting period covered hereby, or for future Company products, may change in subsequent reporting periods as a result of changes in the facts and circumstances of the Company's business or products, future SEC guidance interpreting the application of the Rule or evolving consensus or industry standards regarding the interpretation and implementation of the Rule.

Description of the Company's Products Covered by this Report

This Report relates to products: (i) for which Conflict Minerals are necessary to the functionality or production of that product; (ii) that were manufactured, or contracted to be manufactured, by the Company; and (iii) for which the manufacture was completed during calendar year 2013.

These products, which are referred to in the Report collectively as the "Covered Products," are the following:

Various robotic devices that automate clinical laboratories (i.e. open automation track systems) and move samples through the laboratory. The Company designs the open automation tracks and assembles generic component parts to form the open automation track systems.

RxStation® is an automated dispensing cabinet for medications in a hospital setting. The Company contracts with a third party to manufacture the RxStation, which is designed specifically for the Company.

Connectivity engines that are utilized to enable medical device connectivity. The designs are third party designs that include a custom plastic enclosure and additional USB ports, which are manufactured specifically for the Company.




Exhibit 1.02

Custom device adaptors that are contracted to be manufactured by third parties for various applications.

The Company's Reasonable Country of Origin Inquiry and Due Diligence Process

The Company has conducted a good faith reasonable country of origin inquiry regarding the Conflict Minerals used in the products it manufactures or contracts to manufacture. The good faith reasonable country of origin inquiry was reasonably designed to determine whether any of such Conflict Minerals originated in the Covered Countries and whether any such Conflict Minerals may be from recycled or scrap sources. The Company also exercised due diligence on the source and chain of custody of the Conflict Minerals to the extent such information was available. The Company's due diligence measures were designed to conform to the framework in the Organisation for Economic Cooperation and Development Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High Risk Areas: Second Edition, including the related supplements on gold, tin, tantalum and tungsten (the "OECD Guidance").

The Company has adopted a policy relating to Conflict Minerals (the "Policy"), which is publicly available on the Company's website. The Policy states that the Company supports efforts to end the human suffering associated with mining in the Covered Countries and is committed to meeting the regulatory requirements that seek to eradicate this suffering. In addition, the Company supports greater transparency with regard to the supply chain and expects its suppliers to utilize Conflict Minerals from sources that are identified as DRC Conflict Free. The term DRC Conflict Free, as defined in the Rule, encompasses products that do not contain Conflict Minerals that directly or indirectly finance or benefit armed groups in the Covered Countries. All suppliers are expected to, among other things, implement and communicate policies that are consistent with our policy and provide timely and accurate information regarding the source of Conflict Minerals in the supply chain and the steps that have been taken to determine whether such products and materials are DRC Conflict Free.

The supply chain with respect to the Covered Products is complex, and there are many third parties between the ultimate manufacture of the Covered Products and the original sources of Conflict Minerals. In this regard, the Company does not purchase Conflict Minerals directly from mines, smelters or refiners. It must therefore rely on its suppliers to provide information regarding the origin of Conflict Minerals that are included in Covered Products. Moreover, the Company believes that the smelters and refiners of the Conflict Minerals are best situated to identify the sources of Conflict Minerals, and therefore has taken the steps described below to identify the applicable smelters and refiners of Conflict Minerals in the Company's supply chain.

The Company's due diligence efforts began shortly after the SEC released the final Rule in the fall of 2012 and continued through the date of this Form SD and Conflict Minerals Report. The purpose of the Company's due diligence is to determine (i) the origin and chain of custody of the Conflict Minerals, and (ii) whether the Conflict Minerals financed or benefited armed groups in the Covered Countries.

OECD Guidance suggests structuring internal management systems to support supply chain due diligence. In this regard, the Company identified and engaged appropriate Company personnel to comprise a core team assigned with the responsibility to oversee and carry out due diligence procedures with respect to the Rule. The team responsible for the Company's Conflict Minerals compliance is comprised of representatives from Legal, Finance and the Supplier Contracts Team. For purposes of conducting due diligence, the Company established an organizational structure whereby its business was divided into two distinct groups for the purpose of determining the applicability of the Rule: Cerner Labotix and all other Cerner business. As discussed below, additional Company personnel were identified in each of these groups, and members of the core team communicated and coordinated with these personnel for purposes of carrying out the Company's due diligence.

Through its Cerner Labotix business group, the Company automates clinical laboratories by assembling robotic devices that can move samples through the laboratory. While Cerner Labotix does not manufacture or contract to manufacture any of the generic component parts that are assembled to form the automated laboratory solution to the end user, based on SEC guidance, the Company determined that the Rule may apply to Cerner Labotix because the open laboratory track systems sold to end users are products and the Conflict Minerals contained in the generic



Exhibit 1.02

electronic components may be deemed necessary to the functionality of the products. To help determine the population of Cerner Labotix products and corresponding component parts, the core team engaged various personnel of the Cerner Labotix group, including customer support and engineering personnel.

All other Covered Products fell within the other Cerner business group and consisted of the RxStation, managed by the Company's RxAware products group, and connectivity engines and custom device adaptors, managed by the Company's DeviceWorks products group. Although these Covered Products are manufactured by third parties, the Company determined that the Rule may apply to these products because of the degree of influence the Company has over the manufacturing of these products may be sufficient such that the Company is deemed to have contracted to manufacture the products. To help determine the population of other Cerner business products and corresponding component parts, the core team engaged various personnel within the other Cerner business group, including personnel in accounting, operations and development.

OECD Guidance recommends that a company engage with suppliers in its supply chain to make inquiries about the source of Conflict Minerals, as well as the smelters or refiners used to process the Conflict Minerals. In this regard, the Company established a system of controls and transparency over its supply chain to identify the source of Conflict Minerals, as well as strengthened its engagement with suppliers to assist the Company in undertaking its supply chain due diligence, in each case, as discussed below.

Once the core team identified the complete population of products subject to the Rule, the Company circulated questionnaires and sought to obtain the Conflict Free Sourcing Initiative ("CFSI") Conflict Mineral Reporting Template as adopted by Electronic Industry Citizenship Coalition and Global e-Sustainability Initiative (the "EICC Template") from each of the Company’s suppliers associated with the Covered Products. The EICC Template was formulated as a part of industry-supported initiatives, which are contemplated methods for establishing a system of supply chain controls and transparency and identifying and responding to risks in the supply chain under the OECD Guidance.

The questionnaires and the EICC Templates sought representations indicating the facility at which the suppliers' Conflict Minerals were processed and a demonstration that those conflict minerals did not originate in the Covered Countries or came from recycled or scrap sources. As of the date of this report, the Company has received responses from approximately 80% of its suppliers associated with the Covered Products. More than 37% of suppliers confirmed that products supplied to the Company do not contain Conflict Minerals originating in the Covered Countries, or those Conflict Minerals that originated in the Covered Countries originated from facilities that have been certified conflict free by the CFSI. The remaining suppliers indicated that, due to the complexity of the supply chain, their due diligence procedures were not yet complete and they were unable to make such a claim. As a part of its supplier engagement, the core team attempted to contact all suppliers through multiple channels and also obtained information pertaining to the Rule from suppliers' websites where available. The Company reviewed the CFSI website for an acceptable listing of conflict-free certified smelters and processing facilities to confirm the absence of any "red flags" regarding the representations provided by the Company's suppliers. The CFSI certification process is an industry-supported initiative for compliance with supply chain due diligence, which are contemplated methods for identifying and responding to risks in the supply chain and auditing the due diligence practices of smelter and refiners under the OECD Guidance.

Based on the information that was provided by the Company's suppliers and otherwise obtained through the due diligence process, the Company believes that, to the extent reasonably determinable by the Company, the facilities that were used to process the Conflict Minerals contained in the Covered Products included the smelters and refiners listed in the table below. Based on the information obtained pursuant to the due diligence process, the Company does not have sufficient information with respect to the Covered Products to determine the country of origin of the Conflict Minerals in the Covered Products; however, based on the information that has been obtained, the Company has reasonably determined that countries of origin of the Conflict Minerals include the countries listed in the table below.




Exhibit 1.02

List of facilities processing Conflict Minerals for the Covered Products
5N Plus
Chongyi Zhangyuan Tungsten Company
Ganzhou Nonferrous Metals Smelting Company
Acade Noble Metal Corporation
Chugai Mining
Ganzhou Seadragon W&Mo
Afar Electronic Electroplating Company
CIF
Ganzhou Sinda W&Mo
Aida Chemical Industries Company
CNMC (Guangxi) PGMA Company
Gejiu Yunxi Croup Company
AIM
Codelco
Gejiu Zi-Li Metallurgy Company
Air Products
Complejo Metalurico Vinto
Gold Bell Group
Aktyubinsk
Conghua Tantalum & Niobium Smeltery
Grande
Alldyne Powder Technologies
Cookson
Guang Xi Hua Xi Corporation
Allied Materials
Cooper Metal
Guangdong Jinding Gold Company
Almalyk Mining and Metallurgical Complex
Cooperativa dos Fundidores de Cassiterita
GuangXi China Tin
Alta Group
CV DS Jaya Abadi
GuangZHou Jin Ding
Altlantic Metals
CV Duta Putra Bangka
GuangZhouHanyuan Electronic Technology
Amalgamated Metals Corporation
CV Gita Pesona
Gulidov Krasnoyarsk Non-Ferrous Metals Plant
Amalgamet Inc
CV JusTindo
Haiwoo
American Iron and Metal
CV Makmur Jaya
Hana-High Metal
Aoki Labatories
CV Nurjanah
Harima Smelter
Asaka Riken Company
CV Prima Timah Utama
Harmony Gold Refinery
Asarco
CV Serumpun Sebalai
Heesung Catalysts Corporation
Atasay Kuyumculuk Sanayi Ve Ticaret
CV United Smelting
Heesung Metal
ATI Metalworking Products
CWB Materials
Henan Middle Plains Gold Smelter
Aurubis
Dae Kil
Henan Sanmenxia Lingbao City Jinyuan Mining
Baiyin Nonferrous Metals Corporation
Daejin Industries
Henan Zhongyuan Gold Smelter
Bangka
Daeryoung E&C
Hisikari Mine
Batu Hijau Gold/Copper Mining
Dayu Weiliang Tungsten Company
Hitachi
Beijing Oriental Guide Welding Materials
Der Kae Enterprise
HMG
Beijing Zenith Materials
Do Sung Corporation
HQ Metal Products Company
Best Metals
Dongguan Zhong Ju Tin Electronic
Hua Fu Gui
Boliden Mineral AB
E-Chem Enterprise Corporation
Huangguang Tongding Metal Material Company
Buffalo Tungsten
EM Vinto
Huaxi Guangxi Group
Butterworth
Empresa Metallurgica Vinto
Huichang Jinshunda Tin
Cabot
Empressa Nacional de Fundiciones (ENAF)
Huichang Shun Tin Kam Industries
Canfield
ESG Edelmetallservice GmbH & Company
Hunan Chun-Chang Nonferrous Smelting
CapXon(Hongyuan)
Ethiopian Minerals Development Share
Huzhou Cemeted Carbide Works
Caridad
Eximetal
Hwasung CJ Company
Cendres & Métaux
Feinhütte Halsbrücke GmbH
Hyundai-Steel
Central Bank of the DPR of Korea
Fenix Metals
IBF IND Brasilleira de Ferroligas
Central Bank of the Philippines
Fort Wayne Wire Die
IES Technical Sales
ChangChun up-optech
Fuji Metal Mining
IMLI
Chaozhou Xianglu Tungsten Industry
Fujian Nanping
Imperial Zinc
Chengfeng Metals Company
Furukawa Electric Company
Indonesian State Tin Corporation
Chenggong Technology
Galva Metal
Indonesian Tin Inaot
China Minmetals
Gannan Tin Smelter
Inner Mongolia Qiankun Gold and Silver Refinery
China National Gold Group Corporation
Gannon & Scott
Ishihara Chemical Company
China National Non-ferrous
Ganzhou Hongfei W&Mo Materials
Jalan Jenderal Sudirman 51
China Tin Smelter Company
Ganzhou Huaxing Tungsten Company
Japan Mint




Exhibit 1.02

Japan New Metals Co Ltd
Luo Men Ha Si
Posco
Japan Pure Chemical
Maanshan Dongshen Electronic Material Factory
Precious Metal Materials Company
Jau Janq
MCP Metal Specialties
Prioksky
Jean Goldschmidt International
Mentok
PT Alam Lestari Kencana
Jia Lung Corp
Metallic Resources
PT Aneka Tambang (Persero) Tbk
Jiangxi Copper Company
Metallo Chimique
PT Artha Cipta Langgeng
Jiangxi Minmetals Gao'an Non-ferrous Metals
Met-Mex Peñoles
PT Babel Inti Perkasa
Jiangxi Nanshan
Midwest Tungsten Wire Company
PT Babel Surya Alam Lestari
Jiangxi Rare Earth & Rare Metals Tungsten Group
Minicut
PT Bangka Kudai Tin
Jiangxi Tungsten Industry Company
Minmetal
PT Bangka Putra Karya
Jiangxi Yichun
Misue Tin Smelter and Refinery
PT Bangka Timah Utama Sejahtera
Jin Jinyin Refining Company
Mits-Tec Company
PT Bangka Tin Industry
JinDa Metal Company
Mitsubishi Electric Metecs Company
PT Belitung Industri Sejahtera
Jinlong Copper Company
MK Electron
PT BilliTin Makmur Lestari
JM USA
Morigin Company
PT Citralogam Alphasejahtera
JNM
Moscow Special Alloys Processing Plant
PT DS Jaya Abadi
JSC Ekaterinburg Non-Ferrous Metals
Malaysia Smelting Corporation
PT Eunindo Usaha Mandiri
JSC Uralectromed
Muntok Smelter
PT Fang Di MulTindo
JX Nippon Mining & Metals
Murata
PT HP Metals Indonesia
Kai Union Industry and Trade Company
Nadir Metal Rafineri San. Ve Tic.
PT Indra Eramulti Logam Industri
Kaimeng(Gejiu) Industry and Trade Company
Nanchang Cemented Carbide
PT Karimun Mining
Kanfort Industrial (Yantai)
NanChuangshenghua Non-Ferrous Metal Alloy Factory
PT Koba Tin
Kazzinc
Nankang Nanshan Tin Manufactory Company
PT Mitra Stania Prima
Ketabang
Nathan Trotter & Company
PT Panca Mega
King-Tan Tantalum Industry
Navoi Mining and Metallurgical Combinat
PT Putra Karya
Koba
NGHE Tin Non-Ferrous Metal
PT Refined Banka Tin
Koki
Nihon Kagaku Sangyo Company
PT Sariwiguna Binasentosa
Korea Metal
Niihama Nickel Refinery
PT Seirama Tin investment
Korea Poongsan Smelting Corporation
Ningbo Kangqiang
PT Smelting
Kovohute Pribram Nastupnicka
NingHua XingLuoKeng Tungsten Mining
PT Stanindo Inti Perkasa
Kundur
Nippon Filler Metals
PT Sumber Jaya Indah
Kunshan into the Solder Manufacturing
Nitah
PT Supra Sukses Trinusa
Kupol
Nitora
PT Timah Nusantara
Kyocera
Norddeutsche Affinererie AG
PT TIMAH Tbk
Kyoritsu Gokin
North American Tungsten
PT Tinindo Inter Nusa
Kyrgyzaltyn JSC
Novosibirsk
PT Tinindo Internusa
L' azurde Company
Object Management Group
PT Tommy Utama
Laizhou
OJSC Kolyma Refinery
PT Yinchendo Mining Industry
LBMA Recognized Bullion
OM Manufacturing Philippines
Pure Technology
LG-Nikko
Ou Enji (Suzhou) Electronic Chemical Company
PX Precinox
Lingbao Jinyuan Tonghu
Pan Jit
Pynmax
Linwu Xianggui Smelter Company
Pan Pacific Copper Company
Redsun Metal Industries
Liuzhou China Tin
PJ-USA
Rohm And Hass
Liuzhou Huaxi Group Company
PL Timah Tbk
Rui Da Hung
LMS Brasil
Pogo Gold Mining
Saitamaken Irumasi Sayama Ke Hara
London Bullion Market Association
Poongsan
Salzgitter




Exhibit 1.02

 
Samhwa Non-Ferrorus Metal Industries
Süddeutsche Metallhandels-gesellschaft mbH
United Refining
 
Samsung
Sumitomo Corporation
Uyemura
 
Samwon Metals Corporation
Sumitomo Electric Industries
Wieland Werke AG
 
Sandvik Material Technology
Sundwiger Messingwerk GmbH & Company
Williams Advanced Materials
 
Schloetter Company
Suzhou Base Electronics Company
Wind Yunnan Nonferrous Metals
 
Schone Edelmetaal
Suzhou Roiwow Recycle Technology Company
Wuxi Lantronic Electronic Company
 
SD (Samdok) Metal
Suzhou Xingrui Noble
Wuxi Middle Treasure Materials
 
Senju Metal Industry
Sylham
Wuxi Yunxi Sanye Solder Factory
 
SGS Bolivia
Taboca
Xiamen Golden Egret Special Alloy Company
 
Shandong Gold Mining
Taegutec
Xiamen JInbo Metal Company
 
Shandong Zhaojin Gold & Silver Refinery
Taicang City Nancang Metal Meterial Company
Xiamen Tungsten Compaany
 
Shandong Zhaoyuan Zhaojin
Taiwan Total Company
XiHai
 
Shanghai Gold Exchange
Tai'zhou City Yangtze River Delta Electron
Xin Wang Copper smelter
 
Shanghai Kyocera Electronics
Talcang City Nankang Metal Materials
Xinhai Rendan Shaoguan Tungsten Company
 
Shanghai Yuanhao Surface Finishing Company
Talison
XinQian
 
ShangHai YueQiang Metal Products
Tamura
Xstrata Canada Corporation
 
ShangQi
Technic Inc.
Xuri
 
Shantou Xilong Chemical Factory
Thailand Smelting and Refining
Yantai Zhaojin Kanfort Precious Metals
 
Shen Mao
The Great Wall Gold and Silver Refinery of China
Yidong
 
Shenghai
The Hutti Gold Mines
Yigeng Tin Industry
 
Shengmao Technology
The Refinery of Shandong Gold Mining
Yokohama Metal Company
 
Shenzhen Chemicals & Light Industry
Thousand Island Metal Foil Company
Yoo Chang Metal Inc.
 
Shenzhen Fu Chun Material Company
TIMA
YTCL
 
Shenzhen Heng Zhong Industry
Timah Indonesian State Tin Corporation
Yuanhao
 
Shenzhen HuaQing Trading Company
Tinah
Yunnan Chengfeng
 
Shinko Electric Industries
Tong Ding Metal Materials
Yunnan Tin Company
 
Shonan Plant Tanaka Kikinzoku
Tongling Nonferrous Metals Group
Yuntinic Chemical GmnH
 
Shuer Der Industry
Tongxin
YunXi
 
Shyolkovsky Factory of Secondary Precious Metals
Torecom
Yutinic Resources
 
Sichuan Metals & Materials
Totai
ZhaoJin Mining Industry Company
 
Sincemat Company
Toyo Smelter & Refinery
Zhaoyuan Gold Mine
 
Sizer Metals PTE
Traxys
Zhe Jiang Guang Yuan Noble Metal Smelting Factory
 
So Accurate Refining Group
Triumph Northwest
Zhejiang Huangyan Xinqian Electrical Parts Factory
 
Soft Metals
Tyco
Zhongjin Gold Corporation
 
Solder Coat Company
U.S.A Kenner
Zhongyuan Gold Smelter
 
Solnet Metal
UBS AG
Zhuzhou Smelter Group
 
SPTE
Uniforce
Zijin Mining Group
 
Substrate
Unit Timah Kundur PT Tambang
 
 
12 smelters and refiners use recycled/scrap sources
 
 
79 smelters and refiners under the Conflict-Free Smelter Program
 
 
Countries of origin for these facilities are believed to include:
 
Australia, Austria, Belgium, Bolivia, Brazil, Burundi, Canada, Chile, China, Democratic Republic of the Congo, Estonia, Ethiopia, Germany, Hong Kong, India, Indonesia, Italy, Japan, Kazakhstan, Korea, Malaysia, Mexico, Niger, Peru, Philippines, Russia, Rwanda, Singapore, South Africa, Spain, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, United States, Vietnam, Zimbabwe
 







Exhibit 1.02

As a part of its supplier engagement, and in furtherance of its Conflict Minerals policy and supply chain due diligence efforts, the Company will incorporate a warranty and covenant relating to Conflict Minerals into its supplier contract form agreements. This form warranty will seek to obtain (i) an assertion from the supplier that the products it is supplying to the Company are DRC conflict free, (ii) a covenant that the supplier will track the chain of custody of any Conflict Minerals, and (iii) the supplier's EICC Template. To address any risks posed by future acquisitions, the Company will also include a representation in its form transaction documents relating to conflict minerals and added a request for information relating to the use of Conflict Minerals in any products manufactured or contracted to be manufactured by any target companies in its standard due diligence request.

Conclusion

The Company is far downstream in the supply chain, and therefore relies on its suppliers to gather the appropriate information relating to the Rule. Tracing the origin and chain of custody of Conflict Minerals throughout a global supply chain is a complex process that can only be accomplished with the cooperation and support of a vast number of industries and public and private stakeholders. The Company believes that its reasonable country of origin inquiry was reasonably designed to determine whether the Conflict Minerals contained in the Covered Products originated in the Covered Countries or came from recycled or scrap sources. The Company believes its reasonable country of origin inquiry was performed in good faith and complies with the requirements of the Rule.