Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act directed the SEC to adopt rules mandating issuers that are required to file reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to make specialized disclosures and conduct related diligence concerning specified minerals and their derivative metals determined by the U.S. government to be financing conflict in the Democratic Republic of Congo or adjoining countries. Under the SEC’s implementation of Section 1502, through the adoption of Section 13(p) of the Exchange Act and the promulgation of Rule 13p-1 thereunder, companies that manufacture or contract to manufacture products that contain “Conflict Minerals” (defined below) that are necessary to the product’s functionality or production must file a Form SD Specialized Disclosure Report on an annual basis. “Conflict Minerals” include columbite-tantalite (coltan), casserite, gold, wolframite, or their derivatives, which are limited to tin, tantalum and tungsten, or any other minerals or derivatives that the U.S. Secretary of State may designate in the future.
For the purposes of complying with this requirement, Northwest Pipe Company (“NWP”) has determined, based on the reasonable country of origin inquiry described below, that with respect to its necessary Conflict Minerals, it either (i) has no reason to believe that such necessary conflict minerals may have originated in the Democratic Republic of the Congo or an adjoining country, or (ii) reasonably believes that such necessary conflict minerals came from recycled or scrap sources.
NWP does not directly purchase any Conflict Minerals. NWP relies on its direct suppliers to provide information on the origin of the Conflict Minerals contained in components and materials supplied to it. NWP, through its purchasing operations, conducted an inquiry in which it asked certain suppliers to state (a) whether any of the materials they supplied to NWP contained a Conflict Mineral and (b) if so, to provide a complete country of origin narrative stating the national origin of the Conflict Minerals used, including whether or not they were gathered from scrap or recycled origins. All inquiries were made in writing and accompanied by information regarding the reason for such inquiry. All suppliers were requested to respond in writing on company letterhead. Certain other due diligence procedures were performed in regards to suppliers that did not respond to the initial inquiry or repeated follow up requests.
The results of this inquiry established that only two Conflict Mineral derivatives—niobium (a form of columbite-tantalite) and tin—are present in the materials used by NWP in its products. Certain of NWP’s suppliers indicated that such Conflict Minerals were included in the alloys purchased by NWP to fabricate its pipe products. Therefore the Conflict Minerals may be deemed necessary to the functionality or production of a product manufactured by NWP under the applicable regulations.
The suppliers that indicated that they were supplying NWP with materials that may contain Conflict Minerals also represented to NWP that the niobium or tin supplied to NWP either (i) came from recycled or scrap sources, or (ii) originated in North or South America and did not originate in the Democratic Republic of the Congo or an adjoining country. NWP has no reason to believe these representations are untrue given the facts and circumstances surrounding these representations.