EX-1.01 2 exhibit101cmr2017.htm EXHIBIT 1.01 Exhibit


EXHIBIT 1.01
CONFLICT MINERALS REPORT FOR WEST MARINE INC.
 
Filed in accordance with Rule 13p-1 under the Securities and Exchange Act of 1934

This Conflict Minerals Report (“Report”) of West Marine Inc. (“West Marine”, the “Company", “we”, “us” or “our”) is filed with the Securities and Exchange Commission (“SEC”) pursuant to Rule 13p-1 under the Securities Exchange Act of 1934, as amended (“Rule 13p-1”), and prepared in accordance with the instructions to Form SD for the reporting period from January 1, 2016 to December 31, 2016 (the “Reporting Period”).

Company Overview

Founded in 1968 by a life-long sailor with a passion for boating, today West Marine is recognized as a leading Waterlife Outfitter for cruisers, sailors, anglers and paddlesports enthusiasts. The Company is the largest omni-channel specialty retailer exclusively offering boating supplies, accessories, gear, apparel, and footwear to customers across the U.S. and around the world. Our customers include boat owners, marine industry professionals and all those who enjoy recreating in, on or around the water.

Product and Filing Overview

The Company is filing this Conflict Minerals Report for the year ended December 31, 2016, because it has reason to believe (based on its reasonable country of origin inquiry) that certain of the products that it contracts to manufacture contain necessary Conflict Minerals that originated in the Democratic Republic of the Congo or an adjoining country.

As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), the SEC adopted Rule 13p-1 in 2012, instituting reporting and disclosure requirements for SEC registrants who manufacture or contract to manufacture products containing conflict minerals (as defined below) which are necessary to the functionality or production of such products. Form SD defines “conflict minerals” as: ‘(i)(a) columbite-tantalite, (b) cassiterite, (c) gold and (d) wolframite, or their derivatives, which are currently limited to tantalum, tin and tungsten; or (ii) any other mineral or its derivatives determined by the U.S. Secretary of State to be financing conflict in the Democratic Republic of the Congo or an “adjoining country,” as such term is defined in Form SD (collectively, the “Covered Countries”)’. Pursuant to Rule 13p-1, If any conflict minerals, as defined by Form SD, are necessary to the functionality or production of a product manufactured by a registrant or contracted by the registrant to be manufactured, the registrant must conduct a good faith reasonable country of origin inquiry (“RCOI”) regarding Conflict Minerals to determine whether any of the conflict minerals originated in one of the Covered Countries.

The Company does not directly manufacture any of the products that it sells; however it does contract to manufacture products in which Conflict Minerals may be necessary to the functionality or production of those products. The Company contracts to manufacture items such as footwear, clothing, tools and light boating equipment, home products/gifts, fishing products, power sports and water accessories. The Company does not directly source any Conflict Minerals for use in the products it contracts to manufacture. The Company does not own or operate manufacturing facilities and all of its products are manufactured by independent factories, most of which are located outside of the United States.

The Company has adopted a Conflict Minerals policy and has communicated its policy to key associates and to its Tier 1 suppliers. A Tier 1 supplier is one with a direct commercial relationship to the Company for the exclusive supply or manufacture of products for West Marine. Due to consolidation and elimination of suppliers, the Company was able to reduce the number of total in scope suppliers by 33% over the previous year. A total of 103 Tier 1 suppliers (the “Suppliers”) were identified as having In Scope Products subject to the RCOI inquiry.

The Company has an established process for scoping and evaluating the lines of products from its Suppliers on a product-by-product basis to determine which may contain Conflict Minerals that are “necessary to the functionality or production” of the product (“In Scope Products”).


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Reasonable Country of Origin Inquiry

Throughout 2016, the Company conducted its RCOI on the In Scope Products to determine the presence and source of any Conflict Minerals used in the In Scope Products. To implement the RCOI process, the Company conducted a supply-chain survey of its Suppliers using the Conflict-Free Sourcing Initiative’s Conflict Minerals Reporting Template (“CMRT”) of level 3.0 or higher which was introduced via direct email to each supplier using the Company’s Supplier electronic portal. The RCOI began with an introduction email from West Marine to suppliers describing the Conflict Minerals Compliance Program (CMCP) requirements. Suppliers were then offered two options to submit the required information, either by uploading the CMRT in MS Excel format or by completing an online survey version of the template. In recognition that the information requested can take time to collect and aggregate, suppliers were given a final deadline of March 31, 2017 to provide information about the metal processors present in their supply chains for the 2016 reporting year.

Suppliers were asked to provide information regarding the sourcing of their materials with the ultimate goal of identifying the 3TG SORs and associated mine countries of origin. To facilitate reporting at the product-level, the products indicated by West Marine as being sourced from a given supplier were communicated to that supplier as part of the data request. The supplier was asked to select a given product or set of products for which a CMRT was being submitted. Suppliers were able to submit multiple CMRTs as needed to address all indicated products. In cases where a supplier was unable to provide one or more product-specific CMRTs, they could select the option to provide a company level or user defined CMRT.

Suppliers were also given access to an online reference and resource center where they could review supporting regulations and frequently asked questions (FAQs) concerning 3TG mineral tracing. The Supplier Resource Center was provided as an educational tool to facilitate a deeper understanding of the program and education as to why the information is being requested. There were also opportunities to participate in webinars providing information on the Conflict Minerals Rule hosted by the Company’s third party service provider for conflict minerals.

Following the initial introduction to the program and information request, up to three reminder emails were sent to each non-responsive supplier requesting survey completion.

Suppliers who remained non-responsive to these email reminders were contacted by telephone and offered assistance. This assistance included, but was not limited to, further information about the Conflict Minerals Compliance Program, an explanation of why the information was being collected, a review of how the information would be used and clarification regarding how the requested information needed could be provided.

Supplier responses were evaluated to identify “quality control” flags based on various issues including things such as (a) listing smelters or refiners for an unused metal, (b) not providing information about the metal used, (c) inconsistent responses to the questionnaire, (d) a lack of data for sub suppliers, or (e) a response indicating 100% of the 3TG for products covered by the declaration originates from scrap/recycled sources, but one or more smelters or refiners (“SORs”) listed are not known to be exclusive recyclers.

The Company’s survey’s response rate was 73%. Of these responding, 19% indicated one or more of the regulated metals (3TG) were necessary to the functionality or production of the products they supply to West Marine. The attached 2016 Data Summary provides detailed information regarding the smelters/refiners reported to be in West Marine’s supply chain and the associated mine countries of origin.

Due Diligence

Design of Due Diligence Measures

The Company conducted a due diligence review of its supply chain as required by Rule 13p-1. In accordance with the guidance set out in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals for Conflict-Affected and High-Risk Areas, including Supplements on Tin, Tantalum and Tungsten, and the Gold Supplement

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(Second Edition 2013) (the “Guidance”), the Company has established a five-step process which includes: (1) establishment of strong company management systems; (2) identification and assessment of supply chain risk; (3) development and implementation of a risk response strategy; (4) third-party audit of our due diligence practices, as may be required; and (5) preparation of an annual report on supply chain due diligence.

Due Diligence Measures Performed

The Company relied upon the following internationally accepted audit standards to determine whether the SORs in its supply chain source Conflict Minerals from the Covered Countries: the CFSI Conflict-Free Smelter Program, the London Bullion Market Association Good Delivery Program and the Responsible Jewelry Council Chain-of-Custody Certification Tungsten Industry - Conflict Minerals Council concerning their independent third-party audits of smelters and refiners. Based on the Company’s third party service provider database for SORs, and as shown in the Data Summary, there was an indication of DRC sourcing for 62 out of 233 verified SORs.

Further investigation was conducted on Suppliers perceived to be high risk. Supplier’s responses to Conflict Minerals information requests were then collated and reported to senior management. The status of responses of each Supplier are provided to the merchant team members and the Company’s Senior Management team, and include updates on monitoring and tracking corrective action and risk mitigation efforts.

For those supply chains with SORs that are known or thought to be sourcing from the DRC, additional investigation is needed to determine the source and chain-of-custody of the regulated metals. If the SOR is not certified by these internationally-recognized schemes, an attempt is made to contact the SOR to gain more information about their sourcing practices, including countries of origin and transfer, and whether there are any internal due diligence procedures in place or other processes the SORs takes to track the chain-of-custody on the source of its mineral ores. Relevant information to review includes: whether the SOR has a documented, effective and communicated conflict-free policy, an accounting system to support a mass balance of materials processed, and traceability documentation. Outside sources of information regarding the SOR’s sourcing practices were also used where available via internet searches. Additionally, up to three contact attempts were made to SORs to gather information on mine country of origin and sourcing practices.

The status of responses of each Supplier were provided to the Company’s merchant team and Senior Management team, and included status updates on monitoring and tracking corrective action and risk mitigation efforts. The 2016 Data Summary lists the facilities identified by our Suppliers that processed Conflict Minerals in 2016, and the country of origin for the Conflict Minerals processed by such facilities, and the conflict-free status of such facilities (if known).

Future Measures

West Marine is committed to responsible manufacturing practices and it will continue to focus on the development of long term relationships with suppliers who are similarly committed to following the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals for Conflict-Affected and High-Risk Areas, including Supplements on Tin, Tantalum and Tungsten, and the Gold Supplement.

West Marine will continue to refine its systems for identifying relevant suppliers and obtaining additional and more reliable information from each such supplier regarding such supplier’s supply chain. The Company continues to communicate its expectations and information requirements to its Suppliers and will continue to undertake additional fact and risk assessments as necessary. The Company remains committed to implementing processes to improve the quantity and quality of Supplier responses, verify Supplier responses provided, and evaluate new product lines as developed to eliminate the introduction of Conflict Minerals into the supply chain where possible to ensure compliance with the Dodd-Frank Act.



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2016 Data Summary    
Smelters or Processors Identified by Suppliers
Metal
Official Smelter Name
Certified Smelter
Tin
5NPLUS
 
Tungsten
A.L.M.T. Corp.
*
Gold
Advanced Chemical Company
*
Gold
Aida Chemical Industries Co., Ltd.
*
Gold
Allgemeine Gold-und Silberscheideanstalt A.G.
*
Gold
Almalyk Mining and Metallurgical Complex (AMMC)
*
Tin
Alpha
*
Gold
AngloGold Ashanti
*
Gold
Argor-Heraeus SA
*
Gold
Asahi Pretec Corporation
*
Gold
Asahi Refining Canada Limited
*
Gold
Asahi Refining USA Inc.
*
Gold
Asaka Riken Co., Ltd.
*
Gold
Atasay Kuyumculuk Sanayi Ve Ticaret A.S.
 
Gold
Aurubis AG
*
Gold
Bangko Sentral ng Pilipinas (Central Bank of the Philippines)
*
Gold
Boliden AB
*
Gold
C. Hafner GmbH + Co. KG
*
Gold
Caridad
 
Gold
CCR Refinery - Glencore Canada Corporation
*
Gold
Cendres + Métaux SA
*
Tantalum
Changsha South Tantalum Niobium Co., Ltd.
*
Tungsten
Chenzhou Diamond Tungsten Products Co., Ltd.
*
Gold
Chimet S.p.A.
*
Tin
China Tin Group Co., Ltd.
*
Tungsten
Chongyi Zhangyuan Tungsten Co., Ltd.
*
Gold
Chugai Mining
 
Tin
CNMC (Guangxi) PGMA Co. Ltd.
 
Tantalum
Conghua Tantalum and Niobium Smeltry
*
Tin
Cooperativa Metalurgica de Rondônia Ltda.
*
Tin
CV Gita Pesona
*
Tin
CV Serumpun Sebalai
*
Tin
CV Tiga Sekawan
*
Tin
CV United Smelting
*
Gold
Daejin Indus Co., Ltd.
*
Gold
Daye Non-Ferrous Metals Mining Ltd.
*
Tungsten
Dayu Weiliang Tungsten Co., Ltd.
 
Gold
DODUCO GmbH
*
Gold
Dowa
*
Gold
DSC (Do Sung Corporation)
*
Tantalum
Duoluoshan
*
Gold
Eco-System Recycling Co., Ltd.
*
Gold
Elemetal Refining, LLC
*
Tin
EM Vinto
*
Tin
Estanho de Rondônia S.A.
 
Tantalum
Exotech Inc.
*

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Tantalum
F&X Electro-Materials Ltd.
*
Tin
Fenix Metals
*
Tungsten
Fujian Jinxin Tungsten Co., Ltd.
*
Gold
Gansu Seemine Material Hi-Tech Co Ltd
 
Tin
Gejiu Kai Meng Industry and Trade LLC
*
Tantalum
Global Advanced Metals Aizu
*
Tungsten
Global Tungsten & Powders Corp.
*
Gold
Gold Refinery of Zijin Mining Group Co., Ltd
*
Gold
Great Wall Precious Metals Co., Ltd. of CBPM
*
Gold
Guangdong Jinding Gold Limited
 
Tungsten
Guangdong Xianglu Tungsten Co., Ltd.
*
Gold
Guoda Safina High-Tech Environmental Refinery Co., Ltd.
 
Tantalum
H.C. Starck Co., Ltd.
*
Tantalum
H.C. Starck Hermsdorf GmbH
*
Tantalum
H.C. Starck Inc.
*
Tungsten
H.C. Starck Smelting GmbH & Co. KG
*
Tantalum
H.C. Starck Tantalum and Niobium GmbH
*
Tungsten
H.C. Starck Tungsten GmbH
*
Gold
Hangzhou Fuchunjiang Smelting Co., Ltd.
 
Gold
Heimerle + Meule GmbH
*
Tantalum
Hengyang King Xing Lifeng New Materials Co., Ltd.
*
Gold
Heraeus Metals Hong Kong Ltd
*
Tantalum
Hi-Temp Specialty Metals, Inc.
*
Tin
Huichang Jinshunda Tin Co. Ltd
 
Gold
Hunan Chenzhou Mining Co., Ltd.
 
Tungsten
Hunan Chenzhou Mining Co., Ltd.
*
Gold
HwaSeong CJ Co. Ltd
 
Gold
Inner Mongolia Qiankun Gold and Silver Refinery Share Co., Ltd.
*
Gold
Ishifuku Metal Industry Co., Ltd.
*
Gold
Istanbul Gold Refinery
*
Gold
Japan Mint
*
Tungsten
Japan New Metals Co., Ltd.
*
Gold
Jiangxi Copper Company Limited
*
Tantalum
Jiangxi Dinghai Tantalum & Niobium Co., Ltd.
*
Tungsten
Jiangxi Gan Bei Tungsten Co., Ltd.
*
Tin
Jiangxi Ketai Advanced Material Co., Ltd.
*
Tungsten
Jiangxi Minmetals Gao'an Non-ferrous Metals Co., Ltd.
 
Tungsten
Jiangxi Tonggu Non-ferrous Metallurgical & Chemical Co., Ltd.
*
Tungsten
Jiangxi Xinsheng Tungsten Industry Co., Ltd.
*
Tungsten
Jiangxi Yaosheng Tungsten Co., Ltd.
*
Tantalum
JiuJiang JinXin Nonferrous Metals Co., Ltd.
*
Tantalum
Jiujiang Nonferrous Metals Smelting Company Limited
*
Gold
JSC Ekaterinburg Non-Ferrous Metal Processing Plant
*
Gold
JSC Uralelectromed
*
Gold
JX Nippon Mining & Metals Co., Ltd.
*
Gold
Kazzinc
*
Tantalum
KEMET Blue Metals
*
Tungsten
Kennametal Fallon
*
Tungsten
Kennametal Huntsville
*

5



Gold
Kennecott Utah Copper LLC
*
Tantalum
King-Tan Tantalum Industry Ltd.
*
Gold
Kojima Chemicals Co., Ltd.
*
Gold
Kyrgyzaltyn JSC
*
Gold
L'azurde Company For Jewelry
 
Gold
Lingbao Gold Company Ltd.
 
Gold
Lingbao Jinyuan Tonghui Refinery Co. Ltd.
 
Tantalum
LSM Brasil S.A.
*
Gold
LS-NIKKO Copper Inc.
*
Gold
Luoyang Zijin Yinhui Gold Refinery Co., Ltd.
 
Tin
Magnu's Minerais Metais e Ligas Ltda.
*
Tin
Malaysia Smelting Corporation (MSC)
*
Tungsten
Malipo Haiyu Tungsten Co., Ltd.
*
Gold
Materion
*
Gold
Matsuda Sangyo Co., Ltd.
*
Tin
Melt Metais e Ligas S.A.
*
Tin
Metallic Resources, Inc.
*
Tantalum
Metallurgical Products India Pvt., Ltd.
*
Gold
Metalor Technologies (Hong Kong) Ltd.
*
Gold
Metalor Technologies SA
*
Gold
Metalor USA Refining Corporation
*
Gold
METALÚRGICA MET-MEX PEÑOLES, S.A. DE C.V
*
Tin
Mineração Taboca S.A.
*
Tin
Minsur
*
Tin
Mitsubishi Materials Corporation
*
Gold
Mitsubishi Materials Corporation
*
Tantalum
Mitsui Mining and Smelting Co., Ltd.
*
Gold
Moscow Special Alloys Processing Plant
*
Gold
Nadir Metal Rafineri San. Ve Tic. A.ª.
*
Tin
Nankang Nanshan Tin Co., Ltd.
 
Gold
Navoi Mining and Metallurgical Combinat
*
Tin
Nghe Tinh Non-Ferrous Metals Joint Stock Company
 
Gold
Nihon Material Co., Ltd.
*
Tantalum
Ningxia Orient Tantalum Industry Co., Ltd.
*
Tantalum
NPM Silmet AS
*
Tungsten
Nui Phao H.C. Starck Tungsten Chemicals Manufacturing LLC
*
Tin
O.M. Manufacturing (Thailand) Co., Ltd.
*
Gold
Ohura Precious Metal Industry Co., Ltd.
*
Gold
OJSC "The Gulidov Krasnoyarsk Non-Ferrous Metals Plant" (OJSC Krastsvetmet)
*
Gold
OJSC Novosibirsk Refinery
*
Tin
Operaciones Metalurgical S.A.
*
Gold
PAMP S.A.
*
Gold
Penglai Penggang Gold Industry Co Ltd
 
Gold
Prioksky Plant of Non-Ferrous Metals
*
Gold
PT Aneka Tambang (Persero) Tbk
*
Tin
PT Aries Kencana Sejahtera
*
Tin
PT Artha Cipta Langgeng
*
Tin
PT Babel Inti Perkasa
*
Tin
PT Bangka Tin Industry
*

6



Tin
PT Belitung Industri Sejahtera
*
Tin
PT Bukit Timah
*
Tin
PT DS Jaya Abadi
*
Tin
PT Eunindo Usaha Mandiri
*
Tin
PT Inti Stania Prima
*
Tin
PT Justindo
 
Tin
PT Karimun Mining
*
Tin
PT Mitra Stania Prima
*
Tin
PT Panca Mega Persada
*
Tin
PT Prima Timah Utama
*
Tin
PT Refined Bangka Tin
*
Tin
PT Sariwiguna Binasentosa
*
Tin
PT Stanindo Inti Perkasa
*
Tin
PT Sumber Jaya Indah
*
Tin
PT Timah (Persero) Tbk Kundur
*
Tin
PT Tinindo Inter Nusa
*
Tin
PT Tommy Utama
*
Gold
PX Precinox SA
*
Tantalum
QuantumClean
*
Gold
Rand Refinery (Pty) Ltd.
*
Gold
Republic Metals Corporation
*
Tantalum
RFH Tantalum Smeltry Co., Ltd.
*
Gold
Royal Canadian Mint
*
Tin
Rui Da Hung
*
Gold
Sabin Metal Corp.
 
Gold
Samduck Precious Metals
*
Gold
SAMWON METALS Corp.
 
Gold
Schone Edelmetaal B.V.
*
Gold
SEMPSA Joyería Platería SA
*
Gold
Shandong Tiancheng Biological Gold Industrial Co., Ltd.
 
Gold
Sichuan Tianze Precious Metals Co., Ltd.
*
Gold
So Accurate Group, Inc.
 
Gold
SOE Shyolkovsky Factory of Secondary Precious Metals
*
Tin
Soft Metais Ltda.
*
Gold
Solar Applied Materials Technology Corp.
*
Tantalum
Solikamsk Magnesium Works OAO
*
Gold
Sumitomo Metal Mining Co., Ltd.
*
Tantalum
Taki Chemical Co., Ltd.
*
Gold
Tanaka Kikinzoku Kogyo K.K.
*
Tungsten
Tejing (Vietnam) Tungsten Co., Ltd.
*
Tantalum
Telex Metals
*
Tin
Thaisarco
*
Gold
The Refinery of Shandong Gold Mining Co., Ltd.
*
Gold
Tokuriki Honten Co., Ltd.
*
Gold
TongLing Nonferrous Metals Group Holdings Co., Ltd.
 
Gold
Torecom
*
Tantalum
Ulba Metallurgical Plant JSC
*
Gold
Umicore Brasil Ltda.
*
Gold
Umicore Precious Metals Thailand
*

7



Gold
Umicore SA Business Unit Precious Metals Refining
*
Gold
United Precious Metal Refining, Inc.
*
Gold
Valcambi SA
*
Tungsten
Vietnam Youngsun Tungsten Industry Co., Ltd.
*
Tin
VQB Mineral and Trading Group JSC
*
Gold
Western Australian Mint trading as The Perth Mint
*
Tin
White Solder Metalurgia e Mineração Ltda.
*
Tungsten
Wolfram Bergbau und Hütten AG
*
Tungsten
Xinhai Rendan Shaoguan Tungsten Co., Ltd.
*
Gold
Yamamoto Precious Metal Co., Ltd.
*
Tantalum
Yichun Jin Yang Rare Metal Co., Ltd.
*
Gold
Yokohama Metal Co., Ltd.
*
Tin
Yunnan Chengfeng Non-ferrous Metals Co.,Ltd.
*
Gold
Yunnan Copper Industry Co Ltd
 
Tin
Yunnan Tin Group (Holding) Company Limited
*
Gold
Zhongyuan Gold Smelter of Zhongjin Gold Corporation
*
Tantalum
Zhuzhou Cemented Carbide Group Co., Ltd.
*
*Indicates the smelter or refiner has received a “conflict free” designation from an independent third party audit program.

2016 Data Summary        
Country of Origin
Angola
Guyana
Peru
Argentina
Hong Kong
Philippines
Australia
Hungary
Portugal
Austria
India
Poland
Belgium
Indonesia
Russian/Federation
Bermuda
Ireland
Rwanda
Bolivia
Israel
Saudi Arabia
Brazil
Italy
Sierra Leone
Burundi
Japan
Singapore
Cambodia
Jersey
Slovakia
Canada
Kazakhstan
South Africa
Central African Republic
Kenya
South Sudan
Chile
Korea, Republic of
Spain
China
Kyrgyzstan
Suriname
Columbia
Laos
Switzerland
Congo (Brazzaville)
Luxembourg
Taiwan
Czech Republic
Madagascar
Tajikistan
Djibouti
Malaysia
Tanzania
Congo (Kinshasa)
Mali
Thailand
Ecuador
Mexico
Turkey
Egypt
Mongolia
Uganda
Estonia
Mozambique
United Arab Emirates
Ethiopia
Myanmar
United Kingdom
Finland
Namibia
United States
France
Netherlands
Uzbekistan
Germany
Niger
Vietnam
Ghana
Nigeria
Zambia
Guinea
Papua New Guinea
Zimbabwe

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