Sierra Wireless (SWIR) SDConflict minerals disclosure

Pursuant to Rule 13p-1 of the Securities Exchange Act of 1934, as amended (the “Rule”), Sierra Wireless, Inc. (“Sierra Wireless,” the “Company,” “we,” “us” and “our”) conducted a reasonable country of origin inquiry (“RCOI”) on its supply chain and undertook due diligence measures to determine whether the “conflict minerals” contained in and necessary to the functionality or production of its products originated from the Democratic Republic of the Congo or an adjoining country (collectively, the “Covered Countries”). As used in this report, the term “conflict minerals” includes gold, cassiterite, columbite-tantalite, wolframite and their derivatives tin, tantalum, and tungsten (along with gold, “3TG”).

A copy of this Conflict Minerals Report is publicly available on our website at

Sierra Wireless (NASDAQ: SWIR) (TSX: SW) is a leading Internet of Things ("IoT") solutions provider. Founded in 1993, the company is headquartered in Richmond, British Columbia, Canada and services a global market for its products. By combining edge devices, connectivity services and cloud software into simple, integrated IoT solutions, we enable organizations to unlock value in the connected economy.

We provide a full suite of IoT connectivity services to support our range of connected devices, including: 

Our IoT Solutions segment includes our cellular wireless IoT module solutions, Octave edge-to-cloud solution, IoT connectivity services and embedded broadband solutions.

Sierra Wireless’ world-class and market leading portfolio of cellular wireless IoT modules provide Original Equipment Manufacturers (OEMs) with 4G LTE, 3G/2G, LPWA, Wi-Fi, Bluetooth and GNSS connectivity with simple, scalable and secure solutions that accelerate product development and deployment. This portfolio of secure IoT modules feature built-in edge-to-cloud connectivity and both cloud and industrial APIs.

We offer Smart Connectivity and Enhanced Carrier Connectivity options to simplify how our customers connect and manage their deployments. Both services leverage Sierra Wireless’ 24/7/365 Global Network Operation Center (“GNOC”) and our partnerships with more than 600 networks in more than 190 countries.

Our Embedded Broadband segment is comprised of industrial-grade modules that provide unprecedented speed, bandwidth and network performance for connecting to the world’s 5G and 4G networks. These high-speed modules are typically used in mobile computing and enterprise networking markets. 

Our Enterprise Solutions include our range of Sierra Wireless AirLink® routers, IoT gateways, IoT applications and advanced network management, managed connectivity services, and mobility applications. Public safety, transportation, energy, industrial, retail and financial customers trust our networking equipment for reliability and performance. We have a broad range of cellular gateways and routers complemented by our cloud-based services and software for secure management.

Our gateway solutions address a broad range of market applications within the mobility, industrial, and enterprise market segments. Our products are known for their technical capability and high reliability in mission-critical applications. These gateways leverage our expertise in wireless technologies and offer the latest capabilities in long-term evolution (“LTE”) networking, including wireless fidelity (“Wi-Fi”), Bluetooth, Global Navigation Satellite System ("GNSS") and FirstNet.

Within our IoT Applications division, we offer market ready IoT solutions including asset and fleet tracking, offender and remote monitoring and alarm communications. These solutions and services also benefit from our IoT cloud platform services, which customers can use to help connect devices to mobile networks, manage their devices and build new IoT applications.

Our managed connectivity solutions provide customers with reliable and secure wireless broadband connectivity when and where they need it, by combining our industry-leading hardware portfolio with multi-network connectivity access.

While we perform certain supply chain related functions in-house, we outsource our manufacturing, including procurement of certain parts, kitting, logistics, assembly, testing and repair. We use several contract manufacturers and logistics partners to provide an end-to-end supply chain solution that covers procurement, manufacturing, repair and logistics services. We also use manufacturing partners to support regional manufacturing requirements and certain select products including more complex, lower volume devices. By using the fully integrated supply chain services provided by these manufacturing partners, we optimize product costs, improve alignment with our international customer base and achieve increased operating efficiencies and scalability.

After conducting an internal assessment of our hardware products and the components within our products, we determined that most of our embedded wireless modules, intelligent gateways and modems contain 3TG. We therefore considered those products as part of our conflict minerals assessment. Although many of our hardware products contain 3TG, as a "downstream" company, we are many steps removed from the mining and processing of the 3TG in the supply chain. The materials used in our products come from a large network of suppliers and thus we rely on our suppliers to assist us with our RCOI and due diligence efforts. Our suppliers are also downstream in the supply chain and may have challenges like those that we face in undertaking supply chain due diligence.

In 2020, we engaged Assent Compliance ("Assent") to assist us with data collection and aggregation. Together we worked with our suppliers and other manufacturing partners to collect information about 3TG in our supply chain. Using the Responsible Minerals Initiative (“RMI”) Conflict Minerals Reporting Template (CMRT), a globally-recognized, industry-wide 3TG reporting standard for purposes of complying with Rule 13p-1 of the Exchange Act (the Rule), we received responses from approximately 85% of our suppliers who were identified as being "in scope" for the purposes of our RCOI. Based on the results of our RCOI, we had reason to believe that certain of the 3TG contained in our products may have originated in the Covered Countries and may not have come from recycled or scrap sources. We therefore exercised due diligence to determine the source and chain of custody of those conflict minerals.

Sierra Wireless has determined that we are subject to the Rule because certain products that we contract to manufacture contain 3TG. As a result, we have adopted a Conflict Minerals Policy (available on our website at www.sierrawireless.com/company/corporate-social-responsibility/) and implemented a due diligence program to conform, in all material respects, with the internationally recognized Organisation for Economic Co-operation and Development (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (the “OECD Guidance”).

This report provides information on the due diligence measures undertaken for 2020 and has not been subject to an independent private sector audit.

Sierra Wireless does not own manufacturing facilities and, as a result, contracts external manufacturers to produce its products. To determine which products are in scope for our RCOI and due diligence, the Company conducted a review of its products manufactured during 2020.

Our contract manufacturers were asked to provide an updated list of the suppliers of components used in our products which contain 3TG. Upon receipt of this list, our Conflict Minerals Working Group (the "Working Group") engaged in the following activities to determine the appropriate scope of suppliers that are subject to our due diligence efforts:

Sierra Wireless has adopted and clearly communicated a company policy for the conflict minerals compliance program, which notes that it uses the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas as its foundation. A public copy is available on our website at the following link: https://www.sierrawireless.com/company/corporate-sustainability. This policy is communicated to suppliers when annual conflict minerals data is requested from them. It is also provided to customers whenever Sierra Wireless smelter data is communicated to customers.

Sierra Wireless has structured internal management systems to support supply chain due diligence. The Sierra Wireless conflict minerals compliance program is managed by the Working Group, a cross-functional team whose members represent the Company's Purchasing, Customer Experience and Corporate Quality, and Finance functions. The Working Group is assisted in its efforts by third-party consultants. The Working Group is led by a Project Manager, a member of senior staff with the necessary competence, knowledge, and experience to oversee supply chain due diligence, who coordinates conflict minerals program activities and reports to senior management and the program’s Steering Committee. All of these resources ensure the successful operation and monitoring of the processes that comprise the Sierra Wireless conflict minerals compliance program.

Our conflict minerals compliance program is integrated into the Company’s existing policy framework and operational processes and procedures to ensure effective management, oversight and implementation. Relevant aspects of conflict minerals compliance are documented in the following:

Sierra Wireless has established a system of control and transparency over the mineral supply chain. This system was designed to identify the smelters and refiners in our minerals supply chain. The specific details are found below when discussing OECD Step 2. All records are maintained for a minimum of five years. The system was also designed to strengthen company engagement with suppliers. Sierra Wireless has implemented a reasonable country of origin (“RCOI”) process to collect conflict minerals data on an annual basis. Additionally, conflict minerals compliance is included in all supplier agreements as well as our quality and corporate sustainability management frameworks. There is also a program in place to improve the number and quality of supplier responses year over year.

As recommended in the OECD Guidance, Sierra Wireless supports RMI, an industry initiative that audits due diligence activities of smelters and refiners. The RMI is a joint initiative of the Responsible Business Alliance ("RBA") and the Global e-Sustainability Initiative ("GeSI") and has become one of the most utilized and respected resources for companies from a range of industries addressing conflict minerals issues in their supply chains and therefore, as part of our due diligence, we rely on data obtained through our membership in the RMI.

We designed our RCOI process in accordance with the OECD Guidance. Our RCOI process involves two stages:

For the 2020 reporting period, our RCOI process was executed by Assent with assistance from the Company’s Working Group.

We have designed our Supplier RCOI around collecting the data provided in the CMRT in order to reasonably identify all of the smelters and refiners in the supply chain. All suppliers subject to our due diligence efforts are requested to submit the most recently available version of the CMRT. Given our downstream position in the 3TG supply chain, we rely on our suppliers to identify smelters and refineries through the CMRT. To gather the smelter and refiner information, we engage suppliers either directly or indirectly through our contract manufacturers. For 2020, we surveyed 224 of our suppliers and received 192 responses.

We review supplier responses for accuracy and completeness. The supplier-provided smelter data is aggregated into a single list of smelters. We subsequently review the final smelter list and compare it against industry peers to determine if we have reasonably identified all of the smelters and refiners in our supply chain. Through this process, we determined that our suppliers identified 306 3TG smelters and refiners in their supply chains.

The Smelter RCOI was designed to identify the scope of the risk assessment of the 3TG supply chain. We engaged by attempting to contact each smelter that our suppliers identified in our supply chain to determine whether they sourced from the Covered Countries. For smelters that confirmed or responded, either directly or through industry associations, that they did not source from the Covered Countries but who were not recognized as conformant to the Responsible Minerals Assurance Process (“RMAP”), we reviewed publicly available information to determine whether there was any contrary evidence that contradicted the smelter’s declaration. In doing so we reviewed sources such as NGO publications, including the Enough Project, Global Witness, Southern Africa Resource Watch and Radio Okapi. We also consulted the most recent United Nations Group of Experts’ reports on the DRC and performed public internet searches. If smelters did not respond to our inquiry, we reviewed the same publicly available sources to determine whether there was reason to believe the smelter may have sourced from the Covered Countries during the reporting period.

The findings of our RCOI process were reported to our Senior Vice President, Customer Experience, the designated member of senior management, to outline the potential risks identified in the supply chain.

We then devised and adopted a risk management plan. Since the majority of our suppliers reported their smelter data at the company level, we first determined if gold was in the products we bought from the suppliers that listed high-risk smelters. If gold was contained in the products we bought from those suppliers, we then leveraged our position in the supply chain to encourage these suppliers to provide smelter data more specific to the products we bought from them.

There were two suppliers that listed high-risk smelters in their supply chain. We are proactively working with them to confirm that the gold they process comes from responsible sources and to find alternative solutions to remove high-risk smelters from their supply chain. If we are unsuccessful in these efforts, we plan to take other appropriate steps, as necessary, including sourcing from alternate suppliers if possible.

The OECD Guidance recommends an independent third-party audit of smelters and refiners in 3TG supply chains. We support a recognized and industry-wide program of third-party audits through our RMI membership. Other industry-wide efforts include those of the London Bullion Market Association (“LBMA”) and the Responsible Jewelry Council (“RJC”).

Based on the Working Group’s analysis of the information provided by our suppliers, we identified 306 smelters that may have been used to process the 3TG in our products. Those smelters are listed in Annex 1 hereto.

Publicly available version of our 2020 and prior year reports can be found on our website at the following link: https://www.sierrawireless.com/company/corporate-social-responsibility. We conducted due diligence and risk mitigation activities as outlined above in OECD Steps 2 and 3 with the result that there are eight non-conformant smelters and refiners on the list of legitimate smelters and refiners. As noted below, we will continue to engage with our suppliers regarding any high-risk smelters identified during our risk analysis process.

For the reporting year 2021, we will continue our due diligence and risk mitigation efforts through the following: