FORM SD

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM SD

SPECIALIZED DISCLOSURE REPORT

Jabil Circuit, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   001-14063   38-1886260

(State or other jurisdiction

of incorporation or organization)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

 

10560 Dr. Martin Luther King, Jr. Street North

St. Petersburg, Florida

  33716
(Address of principal executive offices)   (Zip Code)

 

Beth Walters

Senior Vice President, Communications and Investor Relations

727-803-3349

(Name and telephone number, including area code, of the

person to contact in connection with this report.)

 

Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:

 

x Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2013.


Section 1—Conflict Minerals Disclosure

 

 

Item 1.01 Conflict Minerals Disclosure and Report

 

Overview

References in this report to “Jabil,” “we,” “our,” or “us” mean Jabil Circuit, Inc. together with its subsidiaries, except where the context otherwise requires.

Our Conflict Minerals Policy

We fully support Rule 13p-1 under the Securities Exchange Act of 1934, as amended, and Form SD (collectively, the “Conflict Minerals Rule”) and are committed to responsible sourcing of Conflict Minerals (as defined below) as well as full compliance with the requirements of the Conflict Minerals Rule. Furthermore, as a founding member of the Electronic Industry Citizenship Coalition, we embrace the industry coalition’s due diligence and reporting processes that seek to ensure supply chain transparency.

In furtherance of the foregoing, we have adopted and communicated to our suppliers and the public a company policy (the “Conflict Minerals Policy”) for the supply chain of Conflict Minerals. As used herein and in the Conflict Minerals Policy, “Conflict Minerals” are columbite-tantalite (coltan), cassiterite, gold, wolframite and the derivatives tantalum, tin and tungsten, without regard to the location of origin. The Conflict Minerals Policy includes our expectations that our suppliers:

 

  1. Assist us in complying with the Conflict Minerals Rule, by declaring any components, parts and products that contain Conflict Minerals and further providing associated country of and other origin information.

 

  2. Implement controls on their supply chains consistent with our responsible sourcing commitment, so that they are able to provide us with the foregoing information and so that all of the Conflict Minerals in the components, parts and products that we purchase from them are “conflict free”.

 

  3. Source Conflict Minerals from ethically and socially responsible sources that do not directly or indirectly contribute to conflict, including sources that do not directly or indirectly benefit or finance armed groups in the Democratic Republic of the Congo (the “DRC”) or its adjoining countries.

 

  4. Where possible, source Conflict Minerals from smelters and refiners that are validated as being conflict free.

 

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  5. Otherwise implement, and require their direct and indirect suppliers to implement, policies, protocols, standards, systems, frameworks and procedures that are consistent with the Conflict Minerals Rule and the Organisation for Economic Co-operation and Development’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

Our Conflict Minerals Policy indicates that suppliers who do not comply with the foregoing expectations will be reviewed and evaluated accordingly for future business and sourcing decisions. In addition, the Conflict Minerals Policy indicates that suppliers will continue to be required to comply with our complementary policies, including those relating to corruption, money-laundering and bribery.

Applicability of the Conflict Minerals Rule to Our Company

We are one of the leading providers of worldwide electronic manufacturing services and solutions. We provide comprehensive electronics design, production and product management services to companies in the aerospace, automotive, computing, consumer, defense, healthcare, industrial, instrumentation, medical, networking, packaging, peripherals, solar, storage and telecommunications industries. Based on net revenue, during the six months ended February 28, 2014, our largest customers currently include Apple, Inc., BlackBerry Limited, Cisco Systems, Inc., Ericsson, Hewlett-Packard Company, Ingenico S.A., International Business Machines Corporation, NetApp, Inc., Valeo and Zebra.

Our products that were in-scope for purposes of the Conflict Minerals Rule in 2013 consisted of (1) assemblies that we manufactured or contracted to manufacture, (2) stamped metal parts, (3) mechanical enclosures, (4) plastic extrusion components and injection molding parts and (5) industrial tooling and equipment. We are in most cases many levels removed from mines, smelters and refiners. In addition, many of the components and parts contained in our in-scope products are sourced directly by our customers. For these reasons, we have limited influence over the mines, smelters, refiners and many of the other vendors in our supply chain. Furthermore, because of the depth, breadth and constant evolution of our supply chain and competitive factors affecting our supplier base, we often have significant difficultly identifying actors upstream from our direct suppliers. However, through the efforts described in this Form SD and the Conflict Minerals Report included as an exhibit hereto, we seek to ensure that our sourcing practices are consistent with our Conflict Minerals Policy and to encourage conflict free sourcing in our supply chain.

Reasonable Country of Origin Inquiry Information

In connection with the reasonable country of origin inquiry required by the Conflict Minerals Rule, our suppliers identified to us two processors of necessary Conflict Minerals in our supply chain of in-scope products that we determined or reasonably believed processed Conflict Minerals only from recycled or scrap sources for at least part of 2013. One of these sources processed tantalum and the other processed tin. Both were listed as compliant by the Conflict-Free Sourcing Initiative’s Conflict-Free Smelter Program.

 

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The in-scope products that contained Conflict Minerals that we determined or reasonably believed came from recycled or scrap sources also contained other Conflict Minerals for which we were not able to determine the origin. These other Conflict Minerals are, to the extent identified, described in the Conflict Minerals Report filed as an exhibit to this Form SD.

For our reasonable country of origin inquiry, to the extent applicable, we utilized the same processes and procedures that we established for our due diligence. We designed our due diligence measures relating to Conflict Minerals to conform with, in all material respects, the criteria set forth in the Organisation for Economic Co-operation and Development’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, including the Supplement on Tin, Tantalum and Tungsten and the Supplement on Gold (Second Edition 2013). For a discussion of the due diligence measures that we performed in respect of 2013, see the Conflict Minerals Report filed as an exhibit to this Form SD.

Website Disclosure

As required by the Conflict Minerals Rule, the foregoing information is available at the following Internet website: http://jbl.client.shareholder.com/. The information contained on our website is not incorporated by reference into this Form SD or our Conflict Minerals Report and should not be considered part of this Form SD or our Conflict Minerals Report.

Conflict Minerals Report

As required by the Conflict Minerals Rule, a Conflict Minerals Report is provided as an exhibit to this Form SD and is available at the following Internet website: http://jbl.client.shareholder.com/.

None of the necessary Conflict Minerals contained in our in-scope products were determined by us to directly or indirectly finance or benefit armed groups in the DRC or an adjoining country. The terms “armed group” and “adjoining country” have the meanings contained in the Conflict Minerals Rule.

 

Item 1.02 Exhibit

The Conflict Minerals Report required by Item 1.01 is filed as Exhibit 1.02 to this Form SD.

 

 

Section 2—Exhibits

 

 

Item 2.01 Exhibits

Exhibit 1.02 – Conflict Minerals Report for the calendar year ended December 31, 2013

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the duly authorized undersigned.

 

JABIL CIRCUIT, INC.

(Registrant)

   
By: /s/ Forbes I. J. Alexander                           June 2, 2014
Name: Forbes I.J. Alexander      
Title: Chief Financial Officer      

 

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EXHIBIT INDEX

 

Exhibit

  

Description

1.02    Conflict Minerals Report for the calendar year ended December 31, 2013

 

 

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EX-1.02

Exhibit 1.02

Conflict Minerals Report

Jabil Circuit, Inc. has included this Conflict Minerals Report as an exhibit to its Form SD as required by Rule 13p-1 under the Securities Exchange Act of 1934, as amended, and Form SD (collectively, the “Conflict Minerals Rule”). The date of filing of this Conflict Minerals Report is June 2, 2014.

References in this report to “Jabil,” “we,” “our,” or “us” mean Jabil Circuit, Inc. together with its subsidiaries, except where the context otherwise requires. As used herein, “Conflict Minerals” are columbite-tantalite (coltan), cassiterite, gold, wolframite and the derivatives tantalum, tin and tungsten, without regard to the location of origin.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the federal securities laws. Any statements that do not relate to historical or current facts or matters are forward-looking statements. You can identify some of the forward-looking statements by the use of forward-looking words, such as “intend” and the like, or the use of future tense. Statements concerning current conditions may also be forward-looking if they imply a continuation of current conditions. Examples of forward-looking statements include, but are not limited to, statements concerning the additional steps that we intend to take to mitigate the risk that our necessary Conflict Minerals benefit armed groups.

Forward-looking statements are subject to risks and uncertainties that could cause actual actions or performance to differ materially from those expressed in the forward-looking statements. These risks and uncertainties include, but are not limited to, (1) the implementation of satisfactory traceability and other compliance measures by our direct and indirect suppliers on a timely basis or at all, (2) whether smelters and refiners and other market participants responsibly source Conflict Minerals and (3) political and regulatory developments, whether in the Democratic Republic of the Congo (“DRC”) region, the United States or elsewhere. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of filing of this document. We do not intend, and undertake no obligation, to publish revised forward-looking statements to reflect events or circumstances after the date of filing of this document or to reflect the occurrence of unanticipated events.

Overview

For 2013, each of our in-scope products contained at least some Conflict Minerals content for which we were unable to determine the origin. Product, smelter and refiner information in respect of 2013 is described under “Product Information; Additional Risk Mitigation Efforts” below. However, for 2013, none of the necessary Conflict Minerals contained in our in-scope products were determined by us to directly or indirectly finance or benefit armed groups in the DRC or an adjoining country. The terms “armed group” and “adjoining country” have the meanings contained in the Conflict Minerals Rule.

 

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Due Diligence Program Design

We designed our due diligence measures relating to Conflict Minerals to conform with, in all material respects, the criteria set forth in the Organisation for Economic Co-operation and Development’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, including the Supplement on Tin, Tantalum and Tungsten and the Supplement on Gold (Second Edition 2013) (the “OECD Guidance”).

The OECD Guidance has established a five-step framework for due diligence as a basis for responsible global supply chain management of minerals from conflict-affected and high-risk areas. This framework consists of the following elements:

 

  1. Establish strong company management systems (“Step One”);

 

  2. Identify and assess risk in the supply chain (“Step Two”);

 

  3. Design and implement a strategy to respond to identified risks (“Step Three”);

 

  4. Carry out independent third-party audit of supply chain due diligence at identified points in the supply chain (“Step Four”); and

 

  5. Report on supply chain due diligence (“Step Five”).

The implementation of our due diligence measures in respect of 2013 and thereafter are discussed separately in the sections below.

Due Diligence Program Execution

In furtherance of our Conflict Minerals due diligence, we performed the following due diligence measures in respect of the 2013 compliance period. These are not all of the measures that we took in respect of 2013 in furtherance of our Conflict Minerals Policy and Conflict Minerals compliance program and pursuant to the Conflict Minerals Rule and the OECD Guidance. In addition, some of the due diligence measures discussed below are not expressly provided for in the OECD Guidance.

 

  1. OECD Guidance Step One: “Establish strong company management systems”

 

  a. We adopted a policy for the supply chain of Conflict Minerals (the “Conflict Minerals Policy”). We distributed the policy internally to selected personnel. In addition, the policy was communicated in writing to suppliers that we determined to potentially be in-scope for 2013. The Conflict Minerals Policy also was posted on our website. The Conflict Minerals Policy is summarized in the Form SD to which this Conflict Minerals Report is an exhibit.

 

  b. We created a team of senior staff under the Chief Procurement Officer that was charged with creating and implementing our Conflict Minerals compliance strategy. As of December 31, 2013, this team included eight dedicated employees tasked with supplier outreach, follow-up and review of Conflict Minerals-related information submitted to us by suppliers, as well as other employees who spent part of their time on these compliance activities. The following functional areas were represented on our Conflict Minerals compliance working group: Financial Reporting, Internal Audit, Legal, Operations and Supply Chain Management. We also retained outside legal and other consultants to assist us with the implementation of our compliance program.

 

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  c. Selected Jabil personnel were educated on the Conflict Minerals Rule, the OECD Guidance, our compliance plan and the procedures for reviewing and validating supplier responses to our inquiries.

 

  d. We determined to utilize the Conflict Minerals Reporting Template developed by the Electronic Industry Citizenship Coalition (“EICC”) and Global e-Sustainability Initiative (the “Conflict Minerals Reporting Template”) to identify smelters and refiners in our supply chain. We also are a founding member of the EICC and participated in its Extractives Work Group. In addition, we are a member of IPC—Association Connecting Electronics Industries and participated in the development of IPC-1755, a multi-industry standard for the exchange of information related to Conflict Minerals.

 

  e. We have a records retention policy requiring the maintenance of business records relating to Conflict Minerals due diligence, including records of due diligence processes, findings and resulting decisions, for at least five years. We maintain these records in respect of 2013 on a computerized database as recommended by the policy.

 

  f. In addition to communicating our Conflict Minerals Policy in writing to suppliers that we determined to potentially be in-scope, we furnished them with an introductory letter containing a link to third-party materials describing the Conflict Minerals Rule and various aspects of compliance relating to the rule.

 

  g. We held training sessions in Asia, Europe and the Americas, both in-person and through webcast, for some of our significant suppliers. These training sessions included both sessions for individual suppliers and group sessions.

 

  h. We amended our standard vendor Terms and Conditions to, among other things, require our suppliers to (i) source Conflict Minerals from conflict free sources, (ii) adopt and use standards, policies, protocols, standards, systems, frameworks and procedures that meet or exceed the requirements of the reasonable country of origin and due diligence inquiries contemplated by the Conflict Minerals Rule and the OECD Guidance, (iii) provide us with information, certifications and other documents concerning Conflict Minerals content and origin, (iv) adopt and communicate internally and externally a policy on Conflict Minerals usage that is consistent with the Conflict Minerals Policy and (v) include the substance of the requirements contained in the amended Terms and Conditions in all contracts, terms and conditions with their suppliers and require their suppliers to do the same with respect to their direct and indirect suppliers.

 

  i. We had in place mechanisms for employees, suppliers and other interested parties to report violations of our Conflict Minerals Policy.

 

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  2. OECD Guidance Step Two: “Identify and assess risk in the supply chain”

 

  a. Given the significant size of our supplier base, we employed a risk-based approach in implementing our supplier outreach program. In 2013, we solicited information from suppliers (“Suppliers”) which represented approximately 95% of the total materials spend that we controlled for 2013. We requested by email that the Suppliers provide us with information concerning the usage and source of Conflict Minerals in their components, parts and products that we identified as potentially being in-scope, as well as information concerning their related compliance efforts, through the submission to us of a completed Conflict Minerals Reporting Template. We followed up by email or phone with Suppliers that did not respond to the request within the specified time frame. To the extent that our contact information for Supplier personnel was no longer current, we endeavored to obtain updated contact information for appropriate personnel at the Supplier.

 

  b. We reviewed the completed responses received from Suppliers. We followed up with Suppliers that submitted an incomplete response or a response that we determined contained errors or inaccuracies or that otherwise provided a written response determined not to be suitable by us, in each case requesting them to submit a revised response. We followed up with other Suppliers where deemed appropriate by us.

 

  c. To the extent that a completed response identified a smelter or refiner, we reviewed that information against the Standard Smelter Names tab of the Conflict Minerals Reporting Template and the list of compliant smelters and refiners and country of origin information published by the CFSI.

 

  d. To the extent that a smelter or refiner identified by a Supplier was not listed as compliant by an independent third-party, we consulted publicly available information to attempt to determine whether that smelter or refiner obtained Conflict Minerals from sources that directly or indirectly financed or benefitted armed groups in the DRC or an adjoining country.

 

  3. OECD Guidance Step Three: “Design and implement a strategy to respond to identified risks”

 

  a. Our Conflict Minerals compliance team reported the findings of its supply chain risk assessment to our Chief Procurement Officer.

 

  b. We adopted and implemented a risk management plan. Risk mitigation actions under our plan include follow-up with the supplier, supplier education and putting the supplier on a “no buy” list. Our risk management plan provides for increasing levels of escalation to specified internal personnel and to the customer if we are directed to source from the supplier by the customer.

 

  c. To mitigate the risk that our necessary Conflict Minerals benefit armed groups, we also intend to engage in the additional measures discussed under “Product Information; Additional Risk Mitigation Efforts” below.

 

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  4. OECD Guidance Step Four: “Carry out independent third-party audit of supply chain due diligence at identified points in the supply chain”

 

In connection with our due diligence, we utilized information made available by the CFSI concerning independent third-party audits of smelters and refiners. We further support the CFSI through our membership in the EICC.

 

 

 

  5. OECD Guidance Step 5: “Report on supply chain due diligence”

 

We have filed a Form SD and this Conflict Minerals Report with the Securities and Exchange Commission and made available on our website the Form SD and this Conflict Minerals Report.

Product Information; Additional Risk Mitigation Efforts

For 2013, we were unable to determine the origin of at least a portion of the necessary Conflict Minerals contained in each of our in-scope products. For 2013, our in-scope categories of products were: (1) assemblies that we manufactured or contracted to manufacture, (2) stamped metal parts, (3) mechanical enclosures, (4) plastic extrusion components and injection molding parts and (5) industrial tooling and equipment. For a further discussion of our products, see our Annual Report on Form 10-K for the fiscal year ended August 31, 2013. The information contained in our Form 10-K is not incorporated by reference into this Conflict Minerals Report and should not be considered part of this Conflict Minerals Report.

For 2013, none of the necessary Conflict Minerals contained in our in-scope products were determined by us to directly or indirectly finance or benefit armed groups in the DRC or an adjoining country. An “armed group” under the Conflict Minerals Rule is an armed group that is identified as a perpetrator of serious human rights abuses in annual Country Reports on Human Rights Practices under sections 116(d) and 502B(b) of the Foreign Assistance Act of 1961 relating to the DRC or an adjoining country.

In connection with the our reasonable country of origin inquiry or due diligence, as applicable, the Suppliers identified to us certain smelters and refiners as having processed the necessary Conflict Minerals contained in our in-scope products in 2013, as reflected in the table below. Please see the notes that accompany the table for important information concerning the data contained in the table.

 

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Smelter and Refiner and Country of Origin Information(1)

 

    

Compliant

  

Active/Other

    

DRC

Region

Sourced

  

Non-

DRC

Region

Sourced

  

Not

Disclosed

  

Recycled or

Scrap

  
Tantalum    4    7       1    1
Tin    1    11       1    48
Tungsten       1          21
Gold       12    20       34

 

(1) We note the following in connection with the information contained in the foregoing table:

 

  (a) The smelters and refiners reflected in the table were identified by the Suppliers to us as part of our 2013 supply chain. However, not all of the included smelters and refiners may have processed the necessary Conflict Minerals contained in our in-scope products, since some Suppliers may have reported to us smelters and refiners that were not in our supply chain, due to over-inclusiveness in the information received from their suppliers or for other reasons. The smelters and refiners reflected above may not be all of the smelters and refiners in our supply chain, since the Suppliers were unable to identify the smelters and refiners of some of the necessary Conflict Minerals content contained in our in-scope products and not all of the Suppliers responded to our inquiries.

 

  (b) All compliance status information in the table is as of May 1, 2014.

 

  (c) “Compliant” means that a smelter or refiner was listed as compliant with the Conflict-Free Smelter Program’s (“CSFP”) assessment protocols, including through mutual recognition, or was indicated as “Re-audit in process.” Included smelters and refiners were not necessarily Compliant for all or part of 2013 and may not continue to be Compliant for any future period. We do not have information on the origin of the Conflict Minerals processed by any of the Compliant smelters and refiners prior to their respective compliance dates.

 

  (d) “Active” means that the smelter or refiner was listed as having submitted a signed Agreement for the Exchange of Confidential Information and Auditee Agreement contracts to the CFSP or, according to information published by the CFSP, the smelter has agreed to complete a CFSP validation within two years of membership issuance by the Tungsten Industry – Council Minerals Council. A smelter or refiner is listed as “Other” if it was not Compliant or Active.

 

  (e) “DRC Region” means the DRC and its adjoining countries. Origin information was derived from information made available by the CFSI to its members. According to this information, some of the Compliant smelters and refiners may have sourced from both within the DRC Region and from outside the DRC Region. For these smelters and refiners, we were not able to determine the country of origin of the Conflict Minerals specific to our products. Therefore, not all of the country of origin information reflected in the table may apply to the necessary Conflict Minerals contained in our in-scope products.

 

  (f) A smelter or refiner is indicated as “Compliant/Not Disclosed” if the country of origin of the Conflict Minerals processed by the smelter or refiner was not disclosed by the certifying party.

 

  (g) The compliance status and origin reflected in the table is based solely on information made available by the CFSI to its members, without independent verification by us.

 

  (h) For 2013, we were not able to determine the country of origin of the Conflict Minerals processed by any of the smelters and refiners listed as “Active/Other.”

Conflict Minerals from recycled or scrap sources are discussed further in the Form SD to which this Conflict Minerals Report is an exhibit.

 

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We endeavored to determine the mine or location of origin of the necessary Conflict Minerals contained in our in-scope products by requesting that the Suppliers provide us with a completed Conflict Minerals Reporting Template, through the supplier expectations contained in the Conflict Minerals Policy and through the flow-down provisions contained in the Conflict Minerals Policy and our supplier Terms and Conditions. Where a smelter or refiner was identified and was listed as compliant, we also reviewed information made available by the CFSI. If the smelter or refiner was identified but was not listed as compliant, we reviewed publicly available information, to the extent available, to try to determine the mine or location of origin.

Risk Mitigation Efforts After December 31, 2013

We intend to take the following additional steps to mitigate the risk that the necessary Conflict Minerals contained in our in-scope products benefit armed groups. These steps are in addition to the steps that we took in respect of 2013, which we intend to continue to take in respect of 2014 to the extent applicable.

 

  1. Encourage Suppliers that provided company, division or product category level information for 2013 to provide product level information for 2014 through ongoing outreach with these Suppliers.

 

  2 Engage with Suppliers that provided incomplete responses or that did not provide responses for 2013 to help ensure that they provide requested information for 2014.

 

  3. Monitor and encourage the continuing development and progress of traceability measures at Suppliers that indicated for 2013 that the source of Conflict Minerals was unknown or undeterminable.

 

  4. For 2014, increase our supplier outreach to those suppliers accounting for 99% of the total materials spend that we control. For 2015, we intend to include all of our suppliers in our outreach.

 

  5. Communicate to new in-scope suppliers our sourcing expectations, including through the dissemination of the Conflict Minerals Policy to them and required adherence to contractual sourcing requirements. In addition, as new suppliers are added, work with these suppliers to ensure that they understand the requirements of the Conflict Minerals Rule and the OECD Guidance.

 

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