UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM SD

Specialized Disclosure Report

 

EASTMAN KODAK COMPANY

(Exact name of registrant as specified in its charter)

 

 

Julie McCann, 585-726-2976

(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, 2020 to December 31, 2020.

 

 

 

 

 

 

 

 

 

 

 

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Section 1 – Conflict Minerals Disclosure

Item 1.01 Conflict Minerals Disclosure and Report

 

Conflict Minerals Disclosure:

 

The Conflict Minerals Report for the period from January 1, 2020 to December 31, 2020 is filed herewith as Exhibit 1.01 and is publicly available through Kodak’s investor center under the “Financial Information/SEC Filings” tabs on its website at http://investor.kodak.com/financial-information/sec-filings.

 

Item 1.02 Exhibit

 

The Conflict Minerals Report for the period from January 1, 2020 to December 31, 2020 is filed herewith as Exhibit 1.01.

 

Section 2 – Exhibits

Item 2.01 Exhibits

 

Exhibit 1.01  Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form.

 

 

 

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.

 

 

 

 

 

 May 28, 2021

 

Exhibit (1.01)

 

 

Eastman Kodak Company

Conflict Minerals Report

 

This Conflict Minerals Report of Eastman Kodak Company (“Kodak” or the “Company”) covering the reporting period from January 1, 2020 to December 31, 2020, is provided in accordance with Rule 13p-1 (“Rule 13p-1”) under the Securities Exchange Act of 1934, as amended (the “1934 Act”).  Please refer to Rule 13p-1, Form SD and the 1934 Act Release No. 34-67716 for definitions of the terms used in this report, unless otherwise defined herein.

 

Rule 13p-1 imposes certain reporting obligations on United States Securities and Exchange Commission (“SEC”) registrants that manufacture or contract to manufacture products containing conflict minerals that are necessary to the functionality or production of their products. Conflict minerals are defined by the SEC as cassiterite, columbite-tantalite, gold, wolframite, or their derivatives, which are limited to tin, tantalum and tungsten (collectively, “3TG”), or any other mineral or its derivatives determined by the Secretary of State to be financing conflict in the Democratic Republic of the Congo (“DRC”) or an adjoining country (collectively, the “Covered Countries”).

 

Kodak has determined that conflict minerals as defined by the SEC were necessary to the functionality or production of certain products that Kodak manufactured or contracted to be manufactured during 2020.  Kodak conducted a good faith reasonable country of origin inquiry (“RCOI”) to determine the origin of the conflict minerals used in its products.  In accordance with Rule 13p-1, Kodak then undertook due diligence on the source and chain of custody of the conflict minerals used in its products.

 

Company Overview

 

Kodak is a global technology company focused on print and advanced materials and chemicals. Kodak provides industry-leading hardware, software, consumables and services primarily to customers in commercial print, packaging, publishing, manufacturing and entertainment. Kodak is committed to environmental stewardship and ongoing leadership in developing sustainable solutions.

 

Supply Chain Overview

 

Kodak’s global supply chain is complex, given that the Company has over 3,300 material suppliers and most of its suppliers are located far downstream from the mineral smelters and associated mines.  Kodak relies on its suppliers to assist in the RCOI and due diligence efforts for the conflict minerals contained in the materials supplied to or manufactured for Kodak.  Kodak focuses on collecting data from direct suppliers who are likely to supply Kodak with products or materials containing conflict minerals and requires its suppliers through contract terms to establish the necessary proactive due diligence programs that will enable greater long-term supply chain transparency.

 

Kodak performed an analysis of its product components and determined that conflict minerals, which are regularly used in electronics and electrical equipment, are contained in certain components used in the products manufactured for or by Kodak.  Kodak determined that conflict minerals that are contained in certain products were necessary to the functionality or production of the product manufactured or contracted to be manufactured for Kodak, while consumables such as inks, digital and flexographic print plates and chemicals do not contain these minerals.

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Kodak designed its overall conflict minerals policies and procedures to conform, in all material respects, to the five-step framework developed by the Organisation for Economic Co-operation and Development (“OECD”), OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (“OECD Guidance”), and the supplements on tin, tantalum, tungsten and gold.  

 

Kodak’s implementation of the five-step framework consists of the following activities which are discussed in further detail below.

 

 

 

 

 

 

Kodak, as a purchaser of component parts, is many steps removed from the mining of conflict minerals; Kodak does not purchase raw ore or unrefined conflict minerals and conducts no purchasing activities directly in the Covered Countries. Because Kodak does not typically have direct relationships with smelters and refiners, Kodak’s efforts utilized multi-industry initiatives with the smelters and refiners of minerals that may provide those minerals to companies in Kodak’s supply chain.

 

Step 1: Establish Strong Management Systems  

 

Internal Compliance Team

The management system includes a multidisciplinary Conflict Minerals Team consisting of representation from Kodak’s Health, Safety & Environment organization, Worldwide Procurement and Corporate Finance.  This team is responsible for the design, implementation and continued administration of Kodak’s conflict minerals program.  Kodak’s senior management is briefed about the results of the team’s due diligence efforts.  It is Kodak’s policy to refrain from purchasing, directly or indirectly from any sources, conflict minerals that may finance or benefit armed groups in the Covered Countries.  Kodak’s conflict minerals policy is publicly available on Kodak’s website at www.kodak.com/go/hsesupplier.

 

Control Systems

Kodak requires its suppliers to implement a conflict minerals due diligence management system, including a system of controls, to determine the sources of conflict minerals in all products that are supplied to, or manufactured on behalf of Kodak.  Kodak’s suppliers are required to exercise due diligence on the source and chain of custody of these minerals and to cooperate in providing Kodak its due diligence information in an effort towards sourcing only from smelters and refiners which have been certified as conflict free.

 

Kodak was a member of Electronic Industry Citizenship Coalition (“EICC”) and the Conflict Free Sourcing Initiative (“CFSI”) in 2016.  Although no longer a member, Kodak continues to follow the industry guidance through Responsible Minerals Initiative (“RMI”).

 

The RMI contributes to a range of tools and resources, including the Responsible Minerals Assurance Process, the Conflict Minerals Reporting Template, RCOI data and a range of guidance documents on responsible minerals sourcing.

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RMI also runs regular workshops on minerals supply chain issues and contributes to policy development and debates with leading civil society organizations and governments. 

Through these affiliations, Kodak collaborates with industry peers to support the development and use of tools, programs and mineral traceability methods and schemes that help enable companies to source DRC conflict free minerals.  One of the programs developed by the RMI is the Responsible Minerals Assurance Process (“RMAP”).  The RMAP is a voluntary initiative in which independent third-party audits are conducted of a smelter’s or refiner’s procurement processes to determine if the smelter or refiner can demonstrate that all the minerals they process originate from conflict-free sources.  

 

Supplier Engagement and Grievance Mechanisms

Kodak also utilizes the Conflict Minerals Reporting Template (“CMRT”) developed by the RMI to collect supplier data. Kodak continues to put a strong emphasis on supplier education and training. To accomplish this, Kodak utilized a third-party service provider, Assent Compliance (“Assent”) to provide online training and support resources to Kodak’s suppliers. Kodak believes that the Company’s support of these programs and direct engagement with suppliers for conflict minerals training and requests constitute a strong program when it comes to supplier engagement and demonstrate its commitment to conflict free sourcing for the metals used in Kodak’s products. Kodak also has a Business Conduct Guide, including a phone number and website for employees to report concerns about violations of Kodak’s Conflict Minerals Policy and other policies.   More information regarding the Company’s Business Conduct Guide and methods of reporting concerns can be found here: https://www.kodak.com/corp/company/sustainability/conduct-guide/default.htm.

 

Maintain Records

Kodak has adopted a policy to retain relevant documentation for a period of five years. Kodak implemented a document retention policy through Assent to retain conflict minerals related documents, including supplier responses to CMRTs.  Kodak stores all the information and findings from this process in a database that can be audited by internal or external parties as needed.

 

Step 2: Establish a Process to Identify and Assess Risks in Our Supply Chain

 

Kodak, through its RCOI process, determined suppliers that were in scope by starting with a complete list of first tier suppliers and removing: service providers, indirect materials suppliers, and suppliers with whom Kodak spent no money in 2020.  In some instances, second tier suppliers (e.g., distributors) were also included in the scope of this initial list.  Based on a review of Kodak’s spending data and known product compositions, suppliers providing services or products that contain no conflict minerals were excluded from Kodak’s scope.  The exclusions included suppliers providing commodities such as travel, employee benefits, facility maintenance, stationery, office supplies and chemicals with a known composition.  The remaining suppliers were identified as relevant or high priority suppliers, including suppliers with the potential to provide raw materials, components, parts, sub-assemblies and products that have the greatest likelihood of containing conflict minerals.  

 

The suppliers that were identified as relevant or high priority received an email containing a cover letter signed by Kodak’s Global Procurement Director, Corporate Services and a conflict minerals questionnaire using the CMRT. The cover letter provided an explanation for the request including the regulatory background and the expected timing for a response.  Non-responsive suppliers were contacted a minimum of three times. These communications were monitored and tracked for future reporting and transparency.  In the event Kodak determines that a supplier’s efforts to comply with this Policy have been deficient and the supplier fails to cooperate in developing and implementing reasonable remedial steps, Kodak reserves the right to take appropriate actions up to and including discontinuing purchases from the supplier.

 

Kodak received responses from the suppliers that were in scope.  Kodak’s minerals team reviewed and verified each completed questionnaire against expectations established by Company policy. Kodak also engaged with Assent to review the supplier’s responses to determine if it had a conflict minerals policy describing its due diligence program and how it was being applied to the suppliers in the chain.

 

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Further, any smelters and refiners identified in the questionnaire were compared against the list of smelters and refiners maintained by the RMI to ensure that the facilities met the RMI definition of a 3TG processing facility that was operational during the 2020 calendar year.

 

Kodak also reviewed country of origin information available from RMI for the smelters and refiners identified in the questionnaire.

 

A large number of the responses received provided data at a company or divisional level or were unable to specify the smelters or refiners used for 3TG in the components supplied to Kodak. In order to assess the risk that any of these smelters posed to Kodak’s supply chain, Assent determined whether the smelter had been audited against a standard in conformance with the OECD Guidance, such as the RMAP. Kodak does not typically have a direct relationship with 3TG smelters and refiners and does not perform or direct audits of these entities within the Company’s supply chain. Smelters that have completed an RMAP audit are considered to be DRC conflict free. In cases where the smelter’s due diligence practices have not been audited against the RMAP standard, a potential supply chain risk exists.

 

As of the 7^th of May 2021, Kodak validated 331 smelters or refiners and are working to validate the additional smelter/refiner entries from the submitted CMRTs. Due to the limitations associated with the use of supplier-level CMRTs, Kodak cannot definitively determine their connection to the Covered Products. Each facility that meets the RMI definition of a smelter or refiner of a 3TG mineral is assessed according to red flag indicators defined in the OECD Guidance. Assent uses numerous factors to determine the level of risk that each smelter poses to the supply chain by identifying red flags. These factors include:

 

 

As part of Kodak’s risk management plan under the OECD Guidance, when facilities with red flags are reported on a CMRT by one of the suppliers surveyed, risk mitigation activities are initiated. Through Assent, submissions that include any red flag facilities immediately produce a receipt instructing the supplier to take their own risk mitigation actions up to removal of these red flag smelters from their supply chain.

As per the OECD Guidance, risk mitigation will depend on the supplier’s specific context. Suppliers are given clear performance objectives within reasonable timeframes with the ultimate goal of progressive elimination of these red flags from the supply chain.  In addition, suppliers are guided to the Assent University learning platform to engage in educational materials on mitigating the risk of smelters or refiners in the supply chain.

Additionally, suppliers are evaluated on program strength (further assisting in identifying risk in the supply chain). Evaluating and tracking the strength of the program meets the OECD Guidance and can assist in making key risk mitigation decisions as the program progresses. The criteria used to evaluate the strength of the program are based on these four questions in the CMRT:

 

A. Have you established a conflict minerals sourcing policy?

E. Have you implemented due diligence measures for conflict-free sourcing?

G. Do you review due diligence information received from your suppliers against your company’s expectations?

H. Does your review process include corrective action management?

 

 

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When suppliers meet or exceed these criteria (meaning “Yes” responses to at least A, E, G, and H), they are deemed to have a strong program. When suppliers do not meet these criteria, they are deemed to have a weak program.

At this time, 6out of 146 of Kodak’s responsive suppliers have been identified as having a weak program.

 

Step 3: Strategy Designed and Implemented to Respond to Identified Risks:

 

Kodak, together with Assent, compared smelters and refiners identified by suppliers in the questionnaire against the list of facilities that have received a “conflict free” designation from the RMI. In addition, Kodak reviewed the responses against criteria developed to determine which responses required follow-up and further engagement.  These criteria included categories for untimely or incomplete responses as well as inconsistencies within the data reported in the template.  Kodak worked directly with these suppliers to provide revised responses.  Specifically, Kodak followed up with suppliers who provided any of the following negative or incomplete responses to the questionnaire:

 

 

 

 

 

Suppliers that identified specific smelters of concern on their CMRT were contacted in accordance with the OECD Guidance to inform them of the potential for risk, and to evaluate whether or not these smelters could be connected to Kodak’s products. The suppliers were asked to complete a user-defined or product-level CMRT specific to the materials, products or piece parts purchased by Kodak, rather than a company-level CMRT, to better identify the connection to products that they supply.  If a supplier’s efforts to address concerns were determined to be deficient, it was flagged for further action, ranging from education to discontinuing purchases.  The project team reports annually on its progress to relevant senior executives of the company. 

 

Step 4: Auditing of Smelters/Refiners Sourcing

 

Due to the complexity of Kodak’s products, and the depth, breadth and constant evolution of its supply chain, it is difficult to identify actors upstream from Kodak’s direct suppliers.  Kodak does not typically have a direct relationship with 3TG smelters and refiners and does not perform or direct audits of these entities within its supply chain. Kodak has supported the execution of the RMAP and has relied on the RMAP to perform audits of smelters and to develop information on the country and mine or location of origin of conflict minerals in Kodak’s products. In order to assess the risk that any of these smelters posed to Kodak’s supply chain, Assent determined if the smelter had been audited against a standard in conformance with the OECD Guidance, such as the RMAP.  Smelters that have completed an RMAP audit are considered to be DRC conflict free.

Step 5:  Annual Reports on Supply Chain Due Diligence:  

 

Kodak annually reports on its conflict minerals supply chain due diligence to the SEC through the Company’s Form SD and Conflict Minerals Report and publishes the same information on its public website at the link referenced above.    

 

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Results of Supply Chain Due Diligence

 

Reviewing information about 3TG smelters and refiners in Kodak’s supply chain represents the most reasonable effort Kodak can make to determine the mines or locations of origin of the 3TG in its supply chain. 

Kodak received responses from approximately 55% of the suppliers surveyed.  Based on these responses, Kodak identified 331 smelters or refiners of 3TG that are known smelters or refiners based on the RMI’s standard smelter reference list and may have processed the conflict minerals contained in Kodak’s products.  These smelters are listed in the Appendix.  The Appendix also includes an aggregated list of the countries of origin from which the listed smelters and refiners are believed to have sourced conflict minerals, in addition to recycled and scrap sources.  

A majority of Kodak’s suppliers provided information at the company level, rather than information specific to the materials purchased by Kodak.  Kodak is unable to validate whether the smelters and refiners listed in the Appendix in fact contributed conflict minerals to its products.  

Of the 331 smelters and refiners listed in the Appendix, 239 have been certified as compliant with the RMI’s RMAP, and an additional 34 are active in the RMAP third-party audit process.  Kodak was unable to determine the conflict status of the remaining smelters and refiners.

Smelters and refiners that are compliant with the relevant RMAP assessment protocols or currently in the audit process:

 

Overall, 273 of 331, or 82% of the smelters and refiners are compliant with the RMI’s RMAP or are currently in the audit process.

 

The number of smelters and refiners in Kodak’s supply chain as of December 31, 2020 that were compliant with the RMAP’s CFSP has more than quadrupled since Kodak began the evaluation process in 2013.

RMAP Compliant smelters and refiners in Kodak’s supply chain:

Given the fact that not all smelters and refiners identified by Kodak’s suppliers have been audited by the RMI’s RMAP list and many suppliers are still collecting information from their supply chain, Kodak’s products containing or using conflict minerals are considered DRC conflict undeterminable.

 

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The Kodak products determined to be DRC conflict undeterminable are as follows:

 

 

 

Kodak will continue to communicate its expectations and information requirements to its direct suppliers.   Over time, Kodak anticipates that the amount of information globally on the traceability and sourcing of these ores will only increase and improve Kodak’s knowledge thereby facilitating the Company’s efforts to eliminate (or at least reduce) the potential for Conflict Minerals in its products.  When Kodak identifies an upstream supplier that is sourcing from or linked to any party providing direct or indirect support to non-state armed groups, the Company will work with its supply chain to suspend or discontinue engagement with that upstream supplier.  Kodak expects its suppliers to take similar measures with their suppliers to ensure alignment throughout the supply chain.

 

Since 2018, Kodak’s partnership with Assent, a SaaS company, has assisted in a data management solution to track regulatory compliance across Kodak’s supply chain. A solution such as this is needed to further strengthen Kodak’s due diligence process to ensure legal compliance across the product portfolio and to meet customer expectations. In addition to those steps described above, Kodak will continue to take the following measures during the next compliance period to improve the due diligence conducted to further mitigate the risk that its necessary conflict minerals do not benefit armed groups in the Covered Countries, including:  

 

 

 

 

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APPENDIX

 

The table below lists the smelters and refiners as reported to Kodak by its suppliers that are known smelters or refiners based on the RMI’s standard smelter reference list as of May 2020 and may have processed the conflict minerals contained in Kodak’s products.  This information is as reported by the RMI as of May 1, 2020.

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Country of Origin Information

This list of potential countries of origin is populated based on publicly available information, our RCOI and due diligence efforts. It is important to note that this information is also based on company level responses; therefore, it is not certain which of these countries of origin can be linked to our products.

 

Afghanistan, Albania, Angola, Argentina, Armenia, Australia, Austria, Belarus, Belgium, Bermuda, Bolivia, Brazil, Bulgaria, Burundi, Cambodia, Canada, Central African Republic, Chile, China, Colombia, Czech Republic, Djibouti, Dominican Republic, Ecuador, Egypt, England, Estonia, Ethiopia, Finland, France, Germany, Ghana, Guinea, Guyana, Hungary, India, Indonesia, Ireland, Israel, Italy, Ivory Coast, Japan, Kazakhstan, Kenya, Kyrgyzstan, Laos, Liberia,

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Lithuania, Luxembourg, Madagascar, Malaysia, Mali, Mauritania, Mexico, Mongolia, Morocco, Mozambique, Myanmar, Namibia, Netherlands, New Zealand, Niger, Nigeria, Papua New Guinea, Peru, Philippines, Poland, Portugal, Republic Of Korea, Russia, Rwanda, Saudi Arabia, Sierra Leone, Singapore, Slovakia, Slovenia, South Africa, Spain, Sudan, Suri, Suriname, Sweden, Switzerland, Tanzania, Thailand, Turkey, Uganda, United Arab Emirates, United Kingdom of Great Britain and Northern Ireland, United States of America, Uzbekistan, Vietnam, Zambia, Zimbabwe.

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