Conflict Minerals Report
Dillard’s, Inc. has included this Conflict Minerals Report as an exhibit to its Form SD for
2021 as provided for in 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 1, 2022.
Unless the context indicates otherwise, the terms “Dillard’s,” “we,” “its,” “us” and “our” refer
to Dillard’s, Inc. and its consolidated subsidiaries. As used herein and consistent with the
Conflict Minerals Rule, “Conflict Minerals” or “3TG” are columbite-tantalite (coltan),
cassiterite, gold, wolframite and the derivatives tantalum, tin and tungsten, without regard
to the location of origin of the minerals or derivative metals.
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 the 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 3TG 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 continued
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 3TG and (3) political, regulatory and
economic 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.
Applicability of the Conflict Minerals Rule to Our Company
Dillard’s ranks among the nation’s largest fashion apparel, cosmetics and home furnishing
retailers. As of January 29, 2022, we operated 280 Dillard's stores, including 30 clearance
centers, and an Internet store offering a wide selection of merchandise including fashion apparel
for women, men and children, accessories, cosmetics, home furnishings and other consumer
goods.
A significant portion of the products that we sell are third-party branded products that are
available from many retailers, including our company. A portion of our products are
exclusive brand and private label products. We are subject to the Conflict Minerals Rule
because of the degree of influence that we exercise over the materials, parts, ingredients or
components of some of our exclusive brand and private label products that contain tin
and/or gold that are necessary to the products’ functionality or production. While tin and
gold are contained in our in-scope products, not each of our in-scope products contains
both of these minerals. Our in-scope products do not contain tungsten or tantalum. We do
not manufacture any products.
For 2021, we were unable to determine the origin of a portion of the 3TG that were
necessary to the functionality or production of the products that we contracted to be
manufactured. None of the necessary 3TG 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 (each, a “Covered Country” and collectively, the “Covered Countries”).
However, we did not conclude that any of our products were “DRC conflict free.” The terms
“adjoining country,” “armed group” and “DRC conflict free” have the meanings contained in
the Conflict Minerals Rule. Further information concerning our in-scope products and
smelter, refiner and country of origin information provided to us by our suppliers for 2021
is provided under “Product Information” and “Identified Smelters and Refiners.”
We do not directly source 3TG from mines, smelters or refiners, and we believe that we are
in most cases many levels removed from these market participants. However, through the
efforts described in this Conflict Minerals Report, we seek to ensure that our sourcing
practices are consistent with our Conflict Minerals Policy, which is discussed below.
Conflict Minerals Policy
Dillard’s is committed to ensuring that 3TG contained in our exclusive brand and private
label products are obtained from environmentally and socially responsible sources. In
particular, we strive to source in ways that do not contribute to human rights abuses,
including those that are occurring in some of the Covered Countries. In furtherance of the
foregoing, we also have adopted and communicated to our agents, direct suppliers and the
public, a company policy (the “Conflict Minerals Policy”) for the supply chain of 3TG. The
Conflict Minerals policy is available on our website at
https://investor.dillards.com/corporate-governance/governance-documents/default.aspx.
The Conflict Minerals Policy includes, but is not limited to, our expectations that our agents
and suppliers of exclusive brand and private label products:
- Source 3TG from sources that do not support conflict and, whenever possible, that have
been certified as “conflict-free” or the equivalent by an independent third party.
- Cooperate fully with our inquiries, including providing complete and timely responses to
surveys and other inquiries submitted by us.
- Implement and communicate to their relevant personnel and suppliers policies that are
consistent with the Conflict Minerals Policy.
- Put in place procedures for the traceability of 3TG, working with suppliers as applicable.
- Maintain a risk management strategy with respect to identified risks in the supply chain
that is consistent with the Conflict Minerals Policy.
- Otherwise establish policies, due diligence frameworks and management systems that are
consistent with the OECD Guidance (as defined below).
- Recommend their direct and indirect suppliers adopt policies and procedures that are
consistent with those contained in our Conflict Minerals Policy.
The Conflict Minerals Policy also indicates that noncompliance with the policy could result in
penalties, including termination of our business with an agent or supplier.
We do not support the embargoing of 3TG from the Covered Countries, but rather encourage our
suppliers to continue to source responsibly from the region.
Reasonable Country of Origin Inquiry Information
As provided for in the Conflict Minerals Rule, for 2021, we conducted a “reasonable country
of origin inquiry” (“RCOI”). For our RCOI, to the extent applicable, we utilized the same
processes and procedures as for our due diligence, in particular Steps 1 and 2 of 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
(Third Edition) (the “OECD Guidance”), which are described below in this Conflict Minerals
Report.
Our outreach included communicating requests to those suppliers (the “Suppliers”) that we
identified as having provided us or that we believe may have provided us with products
that we contracted to be manufactured that contain necessary 3TG. We determined which
of our products were potentially in-scope for purposes of the Conflict Minerals Rule
through our degree of influence over the products’ manufacture and product specifications,
visual inspection, supplier inquiries, information from by trade associations, consultations
with our third-party testing and factory inspection firms, discussions with other retailers
and other information known to us. Our 3TG outreach included 231 Suppliers, 100% of
which responded to our request for information.
For 2021, the Suppliers identified to us 30 smelters and refiners as having processed the
necessary 3TG contained in our in-scope products, as further discussed under “Identified
Smelters and Refiners.” These smelters and refiners were listed in “product level”
declarations on the Conflict Minerals Reporting Template (the “Template”) developed by
the Responsible Minerals Initiative (the “RMI”). A product level declaration purports to list
only those smelters and refiners that processed the 3TG in our products. Based on our
RCOI, we concluded that 24 out of these 30 smelters and refiners sourced entirely from
outside of the Covered Countries. Our conclusions concerning mineral origin are based on
information provided by a third-party information management service provider (the
“Service Provider”) that we used to complement our internal management processes.
An additional 75 smelters and refiners were listed in “company level” declarations on the
Template. A company level declaration purports to list known smelters and refiners that
processed 3TG in any of the disclosing supplier’s products, not just the smelters and
refiners in our supply chain. Accordingly, these smelters and refiners are not included in
“Identified Smelters and Refiners” below. However, 70, or approximately 93%, of the
smelters and refiners listed in company level declarations were listed as Conformant (as
defined later). Based on our RCOI, we concluded that 68 of these smelters and refiners
sourced entirely from outside of the Covered Countries, including from recycled or scrap
sources.
Pursuant to the Conflict Minerals Rule, based on the results of our RCOI, we exercised due
diligence for 2021. These due diligence efforts are discussed below.
Due Diligence Program Design
Design Framework
Dillard’s designed its due diligence measures relating to 3TG to conform with, in all material
respects, the criteria set forth in the OECD Guidance.
Selected Elements of Design Framework
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 highrisk areas. Selected elements of our program design are discussed below. However, these
are not all of the elements of the program that we have put in place to help ensure that the
3TG contained in our products are responsibly sourced. The headings below conform to the
headings used in the OECD Guidance for each of the five steps of the framework. Selected
due diligence measures that we took in respect of 2021 are discussed under “Due Diligence
Program Execution.”
OECD Guidance Step 1: Establish Strong Company Management Systems
- We maintain a Conflict Minerals Policy. The policy is communicated internally by email. It also is communicated by email to suppliers that we determine to potentially be inscope. In addition, the Conflict Minerals Policy is posted on our website.
- We have a grievance mechanism for employees, suppliers and other interested parties to
report violations of our Conflict Minerals Policy by email. The email address is
legal@dillards.com.
- Dillard’s has a Conflict Minerals Team under the supervision of the General Counsel.
The Conflict Minerals Team includes personnel from Legal, Operations and Trade
Compliance. The Conflict Minerals Team also involves other departments and functions
within Dillard’s from time to time as it deems appropriate, including Compliance,
Merchandising, Product Development and Sourcing.
- Dillard’s uses the Service Provider to complement its internal management processes.
The Service Provider assists with supplier outreach and due diligence and stores data and
supporting documentation for us. We also utilize specialized outside counsel to advise us
in connection with selected aspects of our compliance with the Conflict Minerals Rule.
- We use the Template developed by the RMI to obtain information from our suppliers
concerning the usage and source of 3TG in their products that we identify as potentially
being in-scope, as well as information concerning their related compliance efforts.
- We have a policy requiring the maintenance of business records relating to 3TG due
diligence, including records of due diligence processes, findings and resulting decisions,
for at least five years. The Service Provider has been requested to follow this policy for
records in its possession. The Service Provider maintains the records on a computerized
database.
- Our purchase orders contain terms in order to further ensure vendor compliance with our
Conflict Minerals Policy.
OECD Guidance Step 2: Identify and Assess Risks in the Supply Chain
- The Service Provider requests by email that suppliers provide us with a completed
Template. The Service Provider follows up by email or phone with all suppliers that do
not respond to the request within a specified time frame. If a supplier does not respond to
the survey request, Dillard’s is provided with the supplier’s name and contact information
to determine an escalation strategy.
- The Service Provider reviews the responses received from suppliers for plausibility,
consistency and gaps. It follows up by email with suppliers that submit a response that
triggers any of seven specified quality control flags.
- Smelter and refiner information provided by suppliers is reviewed against the Service
Provider’s internal database. To the extent not in that database, it requests that the
supplier confirm that the listed entity is a smelter or refiner.
- Smelter and refiner information also is reviewed against the lists of Conformant and
Active (as defined below), or the equivalent, smelters and refiners published by the RMI,
the London Bullion Market Association (“LBMA”) and the Responsible Jewelry Council
(“RJC”).
- To the extent that a smelter or refiner identified by a supplier is not listed as Conformant
or the equivalent by an independent third-party, the Service Provider attempts to contact
the smelter or refiner to gain more information about its sourcing practices, including countries of origin and transfer and whether there are internal due diligence procedures in
place or other processes that the smelter or refiner takes to track the chain of custody on
the source of its 3TG. Up to three contact attempts are made by the Service Provider to
smelters and refiners to gather information on country of origin and sourcing practices.
Internet research is also performed to determine whether there are any outside sources of
information regarding the smelter’s or refiner’s sourcing practices.
- Based on the information furnished by suppliers, the Service Provider and other
information known to us, we assess the risks of adverse impacts.
OECD Guidance Step 3: Design and Implement a Strategy to Respond to Identified Risks
- Our Conflict Minerals Compliance Team reports the findings of its supply chain risk
assessment to our General Counsel, who is a member of our senior management.
- We address identified risks on a case-by-case basis. This flexible approach enables us to
tailor the response to the risks identified.
OECD Guidance Step 4: Carry out Independent Third-Party Audit of Supply Chain Due
Diligence at Identified Points in the Supply Chain
In connection with our due diligence, if a smelter or refiner is identified, the Service Provider on
our behalf consults information concerning independent third-party audits of smelters and
refiners made available by the RMI, the LBMA and the RJC, and engages in its own analysis, to
assess smelter and refiner due diligence and to determine whether the smelter or refiner is
Conformant or the equivalent
OECD Guidance Step 5: Report on Supply Chain Due Diligence
We file a Form SD and a Conflict Minerals Report with the Securities and Exchange
Commission and make these filings available on our website.
Due Diligence Program Execution
We performed the following due diligence measures in respect of 2021, but these were not
all of the measures that we took in furtherance of our 3TG compliance program or pursuant
to the Conflict Minerals Rule and the OECD Guidance. For a discussion of the design of our
due diligence measures, see “Due Diligence Program Design.”
- The Service Provider sent the Suppliers an introductory email describing our compliance
program. The email also included a link to the Service Provider’s on-line supplier
education portal and contact email addresses and telephone numbers for obtaining
answers to questions and/or guidance on completing our survey request.
- In the introductory email, the Service Provider also requested that the Suppliers provide
us with a completed Template. Requests were sent to 231 Suppliers. The Service
Provider followed up by email or phone with all Suppliers that did not respond to the
request within a specified time frame. To the extent that, after the foregoing efforts, the
Supplier did not provide the information requested, an escalation process was initiated.
The escalation process consisted of direct outreach by Dillard’s to the Supplier. By the
end of the process, responses were received from 100% of the Suppliers.
- The Service Provider reviewed the responses received from the Suppliers based on its
internally-developed written review criteria for plausibility, consistency and gaps. The
Service Provider followed up by email with the Suppliers that submitted a response that
triggered any of seven specified quality control flags.
- The Service Provider reviewed the smelters and refiners identified by the Suppliers
against those contained in its internal database. To the extent not in that database, it
requested that the Supplier confirm that the listed entity is a smelter or refiner.
- With respect to those completed responses that identified a smelter or refiner, the Service
Provider also reviewed that information against the lists of Conformant and Active, or the
equivalent, smelters and refiners published by the RMI, the LBMA and the RJC. Ninety-seven percent% of the smelters and refiners identified on product level declarations were
listed as Conformant or the equivalent by an independent third-party as of May 18, 2022.
See “Reasonable Country of Origin Inquiry Information” for further information
concerning smelters and refiners identified in company level responses to the Template
- With respect to those smelters and refiners identified by a Supplier that were not listed as
Conformant or the equivalent by an independent third-party, the Service Provider
attempted to contact the smelter or refiner and/or consulted publicly available
information to attempt to determine whether that smelter or refiner obtained 3TG from
sources that directly or indirectly financed or benefitted armed groups in a Covered
Country.
- Our Conflict Minerals Compliance Team reported the findings of its supply chain risk
assessment to our General Counsel.
- In addition, to mitigate the risk that the necessary 3TG contained in our in-scope products
directly or indirectly finance or benefit armed groups in a Covered Country, we:
- made available to the Suppliers the Service Provider’s online training and
informational resources in both English and other languages, in order to help
ensure the accuracy and completeness of responses;
- facilitated a 24/7 support network for Suppliers, through which Suppliers could
call a hotline connected to the Service Provider and obtain real-time information
on 3TG reporting requirements and how to complete the Template; and
- included a Conflict Minerals Policy sign-off for suppliers, which requires all new
suppliers to acknowledge that they have read and understood our Conflict
Minerals Policy.
Product Information
The following categories of exclusive brand and private label products were in-scope for purposes of our compliance with the Conflict Minerals Rule:
- Footwear
- Apparel
- Jewelry
- Handbags
- Cosmetics
- Women’s Accessories
- Men’s Accessories
- Lingerie
- Home
Not all of our products in these categories contained necessary 3TG or were contracted to be
manufactured. Accordingly, only a portion of the products in these categories were in-scope for
purposes of our 3TG compliance.
Due to the challenges of tracing a multi-tier supply chain, for 2021, we were able to
determine the smelters or refiners and countries of origin of only a portion of the necessary
3TG contained in our in-scope products. However, for 2021, none of our in-scope products
were determined by us to support conflict (i.e., to contain necessary 3TG that directly or
indirectly financed or benefitted an armed group in a Covered 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 a Covered Country. We are not expressing the conclusion in this Conflict Minerals Report that any of
our products are “DRC conflict free.”
Identified Smelters and Refiners
In connection with our RCOI or due diligence, as applicable, the Suppliers identified to us in
product level responses to the Template the facilities described in the table below as
having processed the necessary 3TG contained in our in-scope products for 2021. The table
below presents a summary of the smelter and refiner information contained on Appendix
A. Please see the note following the table for additional information concerning the
information in the table. See “Reasonable Country of Origin Inquiry Information” for
further information concerning smelters and refiners identified in company level
responses to the Template.
Smelter and Refiner and Country of Origin Information(1)
|
|
|
|
|
|
|
|
Conformant
|
|
|
DRC Region Sourced
|
Non-DRC Region Sourced
|
Not Disclosed
|
Recycled or Scrap
|
Active
|
On Smelter Look-up Tab List Only
|
Tantalum
|
-
|
-
|
-
|
-
|
-
|
-
|
Tin
|
0
|
24
|
5
|
0
|
0
|
1
|
Tungsten
|
-
|
-
|
-
|
-
|
-
|
-
|
Gold
|
-
|
-
|
-
|
-
|
-
|
-
|
__________
(1) “DRC Region” means the DRC and its adjoining countries. Origin information was derived from information obtained or otherwise provided by the Service Provider
Due to our position in the supply chain, which is discussed earlier in this Conflict Minerals
Report, we rely on our suppliers for accurate smelter and refiner information and our due
diligence measures do not provide absolute certainty regarding the source and chain of
custody of the necessary 3TG contained in our in-scope products.
Dillard’s endeavored to determine the mine or location of origin of the necessary 3TG
contained in its in-scope products by requesting that the Suppliers provide us with a
completed Template and through other procedures followed by us and the Service
Provider that are described in this Conflict Minerals Report.
Future Risk Mitigation Efforts
Dillard’s intends to take the following additional steps in respect of 2022, either directly or
through the Service Provider, to mitigate the risk that the necessary 3TG in its in-scope products
benefit armed groups:
- Continue to encourage suppliers to adopt their own 3TG sourcing policies.
- Encourage Suppliers that provided company level information for 2021 to provide
product level information for 2022 through ongoing outreach with these Suppliers.
- Engage with Suppliers that provided incomplete responses for 2021 to help ensure that
they provide requested information for 2022.
- Encourage the continuing development and progress of traceability measures of Suppliers
that indicated for 2021 that the source of 3TG was unknown or undeterminable.
- Communicate to new potentially in-scope suppliers our sourcing expectations, including
through the dissemination of the Conflict Minerals Policy to them. In addition, as new inscope suppliers are added, work with these suppliers to ensure that they understand the
requirements of the Conflict Minerals Policy, the Conflict Minerals Rule and the OECD
Guidance.
All of the foregoing steps are in addition to the other steps that we took in respect of 202, which
we intend to continue to take in respect of 2021 to the extent applicable.
Appendix A
Capitalized terms used and not otherwise defined in this Appendix have the meanings set forth in
the Conflict Minerals Report of which this Appendix is a part.
Smelters and Refiners
In connection with our RCOI or due diligence, as applicable, our Suppliers identified to us in
product level responses to the Template the smelters and refiners listed below as having
processed the necessary 3TG contained in our in-scope products in 2021. Please see the notes
that accompany the table for additional information concerning the data in the table.
Smelter and Refiner Information (1)
|
|
|
|
|
Metal
|
Smelter Name
|
Country Location
|
Status
|
Tin
|
Alpha
|
UNITED STATES
|
Conformant
|
Tin
|
China Tin Group Co., Ltd.
|
CHINA
|
Conformant
|
Tin
|
Dowa
|
JAPAN
|
Conformant
|
Tin
|
EM Vinto
|
BOLIVIA
|
Conformant
|
Tin
|
Fenix Metals
|
POLAND
|
Conformant
|
Tin
|
Gejiu Kai Meng Industry and Trade LLC
|
CHINA
|
On Smelter
Look-up Tab
List Only
|
Tin
|
Gejiu Non-Ferrous Metal Processing Co., Ltd.
|
CHINA
|
Conformant
|
Tin
|
Guangdong Hanhe Non-Ferrous Metal Co., Ltd.
|
CHINA
|
Conformant
|
Tin
|
Jiangxi New Nanshan Technology Ltd.
|
CHINA
|
Conformant
|
Tin
|
Ma’anshan Weitai Tin Co., Ltd.
|
CHINA
|
Conformant
|
Tin
|
Malaysia Smelting Corporation (MSC)
|
MALAYSIA
|
Conformant
|
Tin
|
Metallic Resources, Inc.
|
UNITED STATES
|
Conformant
|
Tin
|
Metallo Belgium N.V.
|
BELGIUM
|
Conformant
|
Tin
|
Mineracao Taboca S.A.
|
BRAZIL
|
Conformant
|
Tin
|
Minsur
|
PERU
|
Conformant
|
Tin
|
Mitsubishi Materials Corporation
|
JAPAN
|
Conformant
|
Tin
|
Operaciones Metalurgicas S.A.
|
BOLIVIA
|
Conformant
|
Tin
|
PT Artha Cipta Langgeng
|
INDONESIA
|
Conformant
|
Tin
|
PT ATD Makmur Mandiri Jaya
|
INDONESIA
|
Conformant
|
Tin
|
PT Mitra Stania Prima
|
INDONESIA
|
Conformant
|
Tin
|
PT Refined Bangka Tin
|
INDONESIA
|
Conformant
|
Tin
|
PT Timah Tbk Kundur
|
INDONESIA
|
Conformant
|
Tin
|
PT Timah Tbk Mentok
|
INDONESIA
|
Conformant
|
Tin
|
Rui Da Hung
|
TAIWAN
|
Conformant
|
Tin
|
Thai Nguyen Mining and Metallurgy Co.,
Ltd.
|
VIETNAM
|
Conformant
|
Tin
|
Thaisarco
|
THAILAND
|
Conformant
|
Tin
|
Tin Technology & Refining
|
UNITED STATES
|
Conformant
|
Tin
|
White Solder Metalurgia e Mineracao
Ltda.
|
CHINA
|
Conformant
|
Tin
|
Yunnan Chengfeng Non-ferrous Metals Co.,
Ltd.
|
CHINA
|
Conformant
|
Tin
|
Yunnan Tin Company Limited
|
CHINA
|
Conformant
|
(1) We note the following in connection with the information contained in the foregoing table:
(a) The smelters and refiners listed in the table were identified by the Suppliers as being part of our 2021
supply chain. The smelters and refiners listed above may not be all of the smelters and refiners in our
2021 supply chain, since many of our Suppliers indicated that they were unable to identify all of the
smelters and refiners used to process the necessary 3TG content contained in our in-scope products.
(b) All compliance status information in the table is as of May 18, 2022.
(c) “Conformant” means that a smelter or refiner has successfully completed an assessment against the
applicable Responsible Minerals Assurance Process (“RMAP”) standard or an equivalent cross-recognized
assessment. Included smelters and refiners were not necessarily Conformant for all or part of 2021 and may not
continue to be Conformant for any future period.
(d) While none of the identified smelters or refiners is listed as such for 2021, “Active” means that a
smelter or refiner is currently engaged in the RMAP but a conformance determination has yet to be made.
(e) A smelter or refiner is listed as “On Smelter Look-up Tab List Only” if it is listed on the Smelter Look-up
tab of the Template, but is not listed as “Conformant” or “Active.” The RMI notes on its website that the
operational impacts of COVID-19 have led to postponements of some RMAP assessments. The RMI
website also notes that, due to the eligibility criteria for an RMAP assessment, smelters and refiners are
sometimes removed from the Conformant list because they are no longer operational and not because
they are non-conformant to the standard.
(f) The compliance status indicated in the table is based solely on information made publicly available by
the RMI, without independent verification by us
(g) “Country Location” is the location of the smelter or refiner and is based solely on information made
publicly available by the RMI, without independent verification by us.
Country of Origin
The identified potential countries of origin of the 3TG processed by the smelters and refiners
listed in the table above may have included the countries listed below, in addition to other
countries.
* Covered Country
Some of the identified smelters and refiners also may have sourced in whole or in part from
recycled or scrap sources.