Draft OECD Alignment Assessment methodology published

The draft methodology for assessing the alignment of industry programmes with the OECD Due Diligence Guidance for Responsible Mineral Supply Chains has now been published on the OECD’s website.

The Alignment Assessment project, that Kumi is delivering for the OECD, is evaluating the design and implementation of five large-scale programmes covering the supply chains for conflict minerals. More background on the Alignment Assessment project is provided in an earlier blog post.

The objective of the Alignment Assessment methodology is to establish a standardised process for evaluating the extent to which an industry programme puts into practice the key overarching due diligence principles and specific recommendations contained in the OECD Guidance Due Diligence Guidance for Responsible Mineral Supply Chains (the Guidance). Whilst the Alignment Assessment project is focused on five industry programmes, the methodology has been designed for much wider applicability beyond this initial pilot.

There are two key factors driving the need for an OECD-approved, broadly applicable assessment methodology:

  1. The increasing importance of the Guidance to regulation. The Guidance is already central to the US SEC’s Conflict Minerals Rule and underpins, even more prominently, the proposed EU Conflict Minerals Regulation. With regards to the EU regulation, the ability to demonstrate alignment with the Guidance could potentially make the difference between compliance and non-compliance for those companies impacted by the regulation.
  2. Growing demand to extend the application of the Guidance into other mineral supply chains. Whilst the Guidance is already applicable to all minerals, specific recommendations are provided for four minerals (tin, tantalum, tungsten and gold). However, there is much interest in increasing the adoption of the Guidance within the supply chains of other minerals that also have significant risks of contributing to conflict or human rights abuses. Therefore, it is all the more important that the universally applicable principles and recommendations from the Guidance can be easily identified and applied to the specific contexts of different mineral supply chains across the world.

The methodology is therefore intended to be relevant to a wide range of potential users. The definition of ‘industry programmes’ is broad and encompasses initiatives established by industry bodies, independent or multi-stakeholder certification mechanisms, government schemes or any other organisations established to provide responsible sourcing standards for mineral supply chains.

The draft methodology consists of a spreadsheet-based Alignment Assessment Tool, which is accompanied by explanatory Methodology document. The Alignment Assessment Tool facilitates the two main components of an Alignment Assessment:

  • A structured assessment of a programme against the principles and detailed recommendations of the Guidance. This aspect of the assessment will result in a conclusion on the extent to which an industry programme is aligned to the Guidance.
  • An assessment of a programme against a range of good practice criteria for programme governance.

Whilst programme governance issues are not addressed in the negotiated text of the Guidance they are, nonetheless, very important to the diverse stakeholder groups involved in conflict minerals and so remain an important part of the Alignment Assessment methodology.

The main Alignment Assessment component of the Assessment Tool provides the specific criteria from the Guidance. Each criterion is referenced to the relevant section of the Guidance and, where applicable, restrictions to the applicability of the criterion are stated. Examples of such restrictions would be the applicability of a particular criterion to only gold or ‘3T’ (tin, tantalum or tungsten) supply chains, or its applicability only to actors at a specific stage of the supply chain (e.g. downstream companies). The Assessment Tool also provides a scoring section which provides charts and data illustrating how the assessed programme scored across the different sections of the assessment.

The Alignment Assessment project is overseen by an external advisory group which includes the European Commission, Global Witness and the five industry programmes participating in the pilot project. The advisory group have provided extensive comments and input into the development of the draft methodology. The draft methodology will be updated following the completion of the pilot assessment and published, alongside the assessment report, in the first half of 2017.

The draft Alignment Assessment methodology is being made public at this stage partly for transparency given the significant interest in this project but also, and more importantly, to encourage organisations working on responsible mineral supply chains to start thinking about how their activities align to the standards of the Guidance. Feedback on the draft methodology would, of course, be welcome, so please feel free to contact me directly.

Moreover, at Kumi we believe the process of Alignment Assessment has broader applicability beyond industry programmes. We believe the unique insights gained from delivering this Alignment Assessment project for the OECD can also be used for a structured evaluation and strengthening of due diligence processes at an individual company level. More information on this will be provided publicly in due course but, in the meantime, if this is of interest please do not hesitate to get in touch.