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Section 1: SD (FORM SD)

ottr20190529_sd.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM SD

 

SPECIALIZED DISCLOSURE REPORT 

 

 

 

 

 

OTTER TAIL CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Minnesota 0-53713 27-0383995
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)

 

 

215 South Cascade Street, P.O. Box 496, Fergus Falls, MN 56538-0496
(Address of principal executive offices) (Zip Code)

 

 

Jennifer Smestad,

Vice President, General Counsel and Corporate Secretary

(866) 410-8780 

(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:

 

Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2018.

 

 

 

 

Section 1.01 and 1.02 – Conflicts Minerals Disclosure

 

Items 1.01 and 1.02 – Conflicts Minerals Disclosure and Report Exhibit

 

This Form SD and the Conflict Minerals Report, filed as Exhibit 1.01 hereto, are publicly available on our website under Investors, SEC Filings, Form SD at the website http://www.ottertail.com as well as the SEC’s EDGAR database at www.sec.gov. The content of any website referred to in this Form SD is included for general information only and is not incorporated by reference in this Form SD.

 

Section 2 - Exhibits

 

Item 2.01 Exhibits
     
 

1.01

Conflict Minerals Report for the reporting period January 1, 2018 to December 31, 2018 as required by Items 1.01 and 1.02 of this Form SD.

 

 

Signature

 

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 undersigned, thereunto duly authorized.

 

 

 

OTTER TAIL CORPORATION

 

Date: May 31, 2019

 

 

 

 

 

 

 

 

By:

/s/ Jennifer Smestad

 

 

 

Jennifer Smestad

 

 

 

Vice President, General Counsel and Corporate Secretary

 

 

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Section 2: EX-1.01 (EXHIBIT 1.01)

ex_146038.htm

Exhibit 1.01

 

Conflict Minerals Report

 

Otter Tail Corporation

 

For the Year Ended December 31, 2018

 

 

Introduction

 

This report for the year ended December 31, 2018 is made by Otter Tail Corporation (the Company) in compliance with Rule 13p-1 under the Securities Exchange Act of 1934 (the Rule). The Rule was adopted by the Securities and Exchange Commission (SEC) to implement reporting and disclosure requirements related to conflict minerals as directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The Rule imposes certain reporting obligations on SEC registrants whose manufactured products contain conflict minerals that are necessary to the functionality or production of their products. Conflict minerals are defined as cassiterite, columbite-tantalite, gold, wolframite and their derivatives, which are limited to tin, tantalum, tungsten and gold (3TG). These requirements apply to registrants regardless of the geographic origin of the conflict minerals and whether or not the trading in those minerals benefits armed groups.

 

If a registrant has reason to believe that any of the conflict minerals in its supply chain may have originated in the Democratic Republic of the Congo (DRC) or an adjoining country (the Covered Countries), or a registrant is unable to determine the country of origin of those conflict minerals, then the registrant must exercise due diligence on the source and chain of custody of those conflict minerals. The registrant must annually submit a specialized disclosure (Form SD) and Conflict Minerals Report (CMR) to the SEC that includes a description of those due diligence measures.

 

The Company has subsidiary companies operating on two platforms, electric and manufacturing. The Company’s electric utility subsidiary operates in three states serving over 400 communities. The Company’s subsidiary companies in its manufacturing platform provide metal fabrication services, thermoformed and extruded plastic products as well as polyvinyl chloride (PVC) pipe manufacturing. Of the products produced by the Company, conflict minerals, particularly tin, is necessary to the functionality or production of PVC pipe. The Company’s two PVC pipe companies have one supplier which supplies them with the product containing tin. The compound containing tin used in the manufacture of PVC pipes may well not be subject to the reporting rule because the compounds are chemically distinct from metals.

 

Management Systems

 

The Company is in the process of developing a supply chain policy and procedure which will establish and communicate among other things conflict minerals goals that are reasonable and achievable. The goal is to form the expectation that the Company will hold itself and its supply chain accountable. Based on the Company’s limited use of conflict minerals and the prior Reasonable Country of Origin Inquiries, the Company has relied on its guiding principles - particularly its commitment to integrity, people and our community.

 

 

 

 

The Company’s internal team consists of relevant subject matter experts from the functional areas including legal, accounting, engineering and procurement within its various companies. The Company’s supply chain consortium has been important in implementing the Company’s conflict minerals program. Senior leadership is periodically briefed on the program status and effectiveness.

 

The Company has established a system to engage relevant first-tier suppliers, who provide materials containing conflict minerals. With the limited number of suppliers, the transparency of the supply chain allows the identification of smelters in the supply chain in most instances. Additionally, the Company’s subsidiary companies which do not use conflict minerals but are involved in metal fabrication, monitor their supply chain to ensure no conflict minerals are included in any of the metal products.

 

The Company has enlisted the assistance of its relevant suppliers to execute its conflict minerals program. The Company has set expectations with regard to its suppliers through its disclosure requirements to ensure compliance with obtaining the required information necessary to support the Company’s compliance with the Rule. The Company has made efforts to work with its supplier in regard to the requirements of the Rule in order to help each other improve their own performance and assist the Company in complying with the requirements under the OECD guidance.

 

Reasonable Country of Origin Inquiry

 

Otter Tail is many steps removed from the mining of conflict minerals. Otter Tail has conducted an analysis of our products and found that, although we do not directly purchase conflict minerals from our suppliers, we do purchase materials that contain conflict minerals, particularly identified as tin. We rely on our Tier 1 suppliers to provide information on the origin of the conflict minerals contained in components that are necessary to the functionality or production of our products by utilizing CFSI Conflict Minerals Reporting Template (CMRT), which allows us to perform our Reasonable Country of Origin Inquiry (RCOI).

 

Due Diligence

 

The Company’s due diligence is designed to conform to the framework in the OECD 2013. The Company’s due diligence process includes requesting its supplier of products containing tin to complete the CMRT survey in order to obtain information about the smelters or refiners in the Company’s supply chain. The Company has determined that these actions represent the most reasonable effort the Company can make to determine the mines or locations of origin of the 3TG minerals in our supply chain.

 

The Company’s one supplier supplied it with a list of all the smelters used in the supplier’s supply chain. This supplier represented that all of the smelters on the smelter list are on the list of smelters conformant with the relevant RMAP assessment protocol. The Company used public sources to confirm that the smelters listed are compliant with the relevant RMAP assessment protocol.

 

 

 

 

Determination

 

Based on the information provided by the Company’s suppliers, the Company believes the facilities that have been used to process the tin used in the production of its PVC pipe products include RMAP assessment protocol smelters listed in Appendix I below. The Company has found no reasonable basis for concluding that these smelters sourced conflict minerals that directly or indirectly finance or benefit armed groups of the conflict region of the Covered Countries.

 

Steps for Risk Mitigation

 

The Company plans to undertake the following steps during 2019 to improve its due diligence in order to further mitigate the risk that the material containing conflict minerals necessary to the functionality or production of its products does not benefit armed groups in the Covered Countries:

 

 

1.

Continue dialogue with relevant suppliers to gain a common understanding of the importance of compliance in satisfying the Company’s requirements under the Rule.

 

2.

Continue using current processes within the Company’s supply chain organization in working with suppliers to obtain required information.

 

3.

Review third party programs as necessary to further improve the Company’s conflict mineral process in obtaining accurate and complete information.

 

 

 

 

APPENDIX I

 

Mineral

Smelter Name

Country Location of Smelter

Tin

Malaysia Smelting Corporation (MSC)

MALAYSIA

Tin

PT Stanindo Inti Perkasa

INDONESIA

Tin

PT DS Jaya Abadi

INDONESIA

Tin

PT Karimun Mining

INDONESIA

Tin

PT Refined Bangka Tin

INDONESIA

Tin

PT Tommy Utama

INDONESIA

Tin

Operaciones Metalurgical S.A.

BOLIVIA (PLURINATIONAL STATE OF)

Tin

PT Bangka Prima Tin

INDONESIA

Tin

Minsur

PERU

Tin

PT Prima Timah Utama

INDONESIA

Tin

Mineração Taboca S.A.

BRAZIL

Tin

PT Timah (Persero) Tbk Kundur

INDONESIA

Tin

PT Timah (Persero) Tbk Mentok

INDONESIA

Tin

Rui Da Hung

TAIWAN, PROVINCE OF CHINA

Tin

White Solider Metalurgia e Mineracao Ltda.

BRAZIL

Tin

Empressa Nacional de Fundiciones (ENAF)

BOLIVIA (PLURINATIONAL STATE OF)

 

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