Issue ... Supply Chain
Responsible Sourcing and Conflict Minerals

Novelis Code of Conduct for Responsible Sourcing and Conflict Minerals

Burgess COMMENTARY

Peter Burgess

Alongside our efforts to shift our sourcing model, we are also taking steps to minimize risk across our supply chain broadly by encouraging transparency, responsibility and sustainable business practices among our suppliers.

In FY13, Novelis launched a new Supplier Code of Conduct that provides guidelines for how we expect our suppliers to conduct business in an ethical and responsible manner. While many of our suppliers already have robust policies and practices in place consistent with the expectations in our Code, we nonetheless wanted to ensure all of our suppliers are aware of, and adhering to, Novelis’ standards.

The Code, available on our website, is based on externally accepted principles, including the United Nations Global Compact, of which Novelis is a signatory. The Code outlines expectations for our suppliers in the areas of legal compliance, labor and human rights, abolition of child labor, health and safety, environmental protection, and promotion of the Code within their own supply chains. All Novelis suppliers will be expected to agree to the terms of the Code and uphold the Code in all their operations.

Suppliers will be required to provide Novelis with an affirmation that they have read and understand the Novelis Supplier Code of Conduct and agree to adhere to its provisions. We will monitor compliance through supplier self-assessments, conducted via questionnaires and surveys. In addition, in instances where we have reason to believe a supplier may not be in compliance with our Code, we will conduct supplier audits and inspections. In addition, we are building the Code into our procurement processes, such that the Code will be part of the contract agreements for all new suppliers.

In FY14, we began roll-out of the Code by distributing it to our key global suppliers. By the end of the year, we had received signed affirmations from 60% of those suppliers. In FY15, we will distribute the Code to our remaining global and regional suppliers.

Conflict Minerals Update

In 2012, the United States Securities and Exchange Commission issued a rule as part of the Dodd-Frank Act that requires public companies to disclose whether they use conflict minerals, and whether the minerals originated in the Democratic Republic of the Congo or adjoining countries. The concern is that mining for certain minerals – particularly tantalum, tin, tungsten and gold – often takes place in environments where armed conflict and human rights abuses are present, and that proceeds from the sale of the minerals help to finance the conflict.

Based on our internal assessment, none of the aluminum or alloys in our supply chain contain conflict minerals that are necessary to the production or functionality of Novelis products. However, certain of the products we produce for the beverage can market have a thin coating produced using a tin catalyst applied to them before shipping to our customers. These tin catalysts are used at very low levels by certain of our coatings suppliers.

Novelis has engaged with our suppliers and determined that, based on our reasonable country of origin inquiry, we have no reason to believe that any necessary conflict minerals in our supply chain originated in the Democratic Republic of the Congo or an adjoining country.