Conflict Minerals: industry programmes under the spotlight

Earlier this year Kumi was commissioned by the OECD to undertake the first ever evaluation of industry programmes that implement the OECD’s Due Diligence Guidance on responsible mineral supply chains.

This project – referred to as an Alignment Assessment – has two primary goals:

1. The development of a structured methodology that can be used to assess the extent to which industry programmes are aligned to the recommendations that are set out in the OECD’s Due Diligence Guidance, both in terms of the programmes’ design and implementation.
2. An assessment, using this methodology and resulting in a public report, of the alignment of five established industry programmes with the OECD Due Diligence Guidance.

Five industry programmes covering 3TG supply chains

The five industry programmes participating in this project represent the majority of the large-scale programmes covering the supply chains for ‘conflict minerals’ – tin, tantalum, tungsten and gold:

• CFSI: The Conflict-Free Smelter Initiative, which provides a responsible sourcing and reporting programme covering the majority of the world’s smelters for tin, tantalum and tungsten.
• DMCC: The Dubai Multi Commodity Centre’s Responsible Gold programme, which sets the responsible sourcing standards for Dubai’s gold industry.
• LBMA: The London Bullion Market Association’s Responsible Gold programme, which sets the responsible sourcing standards for all gold refiners on the LBMA’s Good Delivery list, the leading global benchmark standard for gold refining.
• iTSCI: A joint industry programme from ITRI (the tin industry body) and the Tantalum-Niobium International Study Centre (TIC) that is currently the only active upstream programme focused on tin, tantalum and tungsten production on-the-ground in the Great Lakes region in central Africa.
• RJC: The Responsible Jewellery Council, a standards setting and certification organisation with over 700 member companies across all aspects of the jewellery supply chain.

In addition to the Secretariat for the OECD’s Responsible Mineral Supply Chains programme, there is a multi-stakeholder Advisory Group supporting the project which includes the European Commission, Global Witness and representatives of each of the industry programmes that are being assessed. The public report from the Alignment Assessment will be released in the first half of 2017; the assessment methodology will be made publicly available in draft form in the coming weeks.

Importance of the Alignment Assessment to conflict mineral risks

There are three factors which make this Alignment Assessment project an important contribution to the ongoing efforts by companies, governments and civil society to responsible mineral supply chains and break the links between mineral production and conflict or human rights abuses:

1. After extensive multi-year, multi-stakeholder negotiations and consultations, the OECD Due Diligence Guidance was launched in 2011 with a global scope and a supplement containing mineral-specific recommendations for the tin, tantalum and tungsten supply chains. A supplement providing recommendations for the gold supply chain was added to the Guidance in 2012. Undoubtedly substantial progress has been made since then but, as the UN Group of Experts on the Democratic Republic of Congo, civil society and the media have continuously highlighted, areas of risk and opportunities for improvement remain. There is, therefore, a need to take stock of progress and identify how the coherence, effectiveness and credibility of industry programmes that implement the OECD Due Diligence Guidance can be improved.

2. The forthcoming EU regulation on conflict minerals is likely to substantially increase pressure on businesses in the tin, tantalum, tungsten and gold supply chains to demonstrate that effective due diligence and risk mitigation measures are in place. The recent political agreement on the conflict minerals regulation made it clear that the OECD Due Diligence Guidance will be the basis for the regulation and therefore the standard that provides the basis for assessments of compliance. An OECD-approved methodology for assessing alignment against the Due Diligence Guidance is therefore likely to be an important contributor to EU conflict minerals compliance efforts.

3. Increasing efforts are being made to promote both the global scope of the OECD Due Diligence Guidance and its applicability to any mineral supply chain – not just the tin, tantalum, tungsten and gold supply chains. There has been growing scrutiny on the potential for conflict and human rights abuses within the gemstone, coal and cobalt supply chains, for example. There is growing interest from stakeholders in understanding the extent to which the principles and standards of the OECD Due Diligence Guidance are being addressed by companies or industry programmes operating in these supply chains. The Alignment Assessment methodology will be an important tool to help integrate the Due Diligence Guidance into these other supply chains.

At Kumi we are privileged to have the responsibility of delivering the Alignment Assessment project for the OECD. Fieldwork is currently ongoing and takes us across central Africa, North America, Europe, the Middle East, South East Asia and Australia. We look forward to sharing more details about this work in due course.

More details about the OECD’s work on responsible mineral supply chains can be found here.