Issue 77
Responsible Players in a Responsible Industry
In recent years, the precious metals sector has seen a considerable increase in standards and regulations aimed at creating and reinforcing conditions to ensure greater social responsibility by companies throughout the chain. National and supranational organisations have devoted major resources to guarantee the traceability of metals, the respect of human rights and the environment, and the prevention of practices such as money laundering and other violations.
Production process of cast bars
The LBMA has developed the Responsible Gold Guidance (RGG), which is based on the Due Diligence Guidance for Responsible Supply Chain of Minerals published by the OECD in 2011. This is mandatory for Good Delivery refiners that want to be accredited by the London Bullion Market. Other key bodies operating in the precious metals chain, such as the World Gold Council and the Responsible Jewellery Council, are taking similar steps.
This has created a growing number of rules and requirements for large, well-organised companies as well as for small-scale operators. The industry initiatives referred to above support both large and small players with tools and instruments to help them achieve compliance (see the boxes below for details).
Thanks to this collective effort, also sustained by a commitment to harmonise standards, today’s precious metals industry is even more responsible than it was just a few years ago.
This important development would have been impossible without the contribution of industry operators. For several years, Argor-Heraeus has been co-operating with the organisations that set standards in the precious metals field. On a regular basis, our directors and compliance team take part in international meetings, conferences, visits and workshops. The contribution of our expertise helps improve the definition of guidelines, requisites and inspection protocols that form the building blocks of a precious metals industry that is more sustainable along the entire chain. Such effort must refer to all operators, including especially those that present greater potential risk due to their size or the geopolitical context in which they operate. Our commitment to working in a more responsible industry involves a significant allocation of resources: we have calculated that Argor-Heraeus invests almost 600 man days per year just checking the reliability of our partners. Although this demands a major effort, we are convinced that as a major player with a long tradition in the industry, it is our duty to offer know-how and resources that assist the industry to move towards a model that merges cost-effectiveness with responsibility.
Measuring gold thickness during the production process
The Company as a Citizen
Our commitment to responsibility does not end with our contribution to the industry or chain. For many years, Argor-Heraeus has firmly believed that a company must be aware of its role as a ‘citizen’ in the socio-economic context in which it operates. We strongly believe that being a ‘good citizen’ is a fundamental condition for long-term success. Our management devotes considerable resources to imposing strict internal procedures that monitor and reduce the overall impact of our activities, often going beyond legal and regulatory requirements. We also make similar efforts to ensure that all of our employees develop an approach based on sustainability and ethical behaviour. This is guaranteed by a Code of Conduct, internal compliance policies, numerous certifications, as well as many hours of employee training courses.
Well aware of our Company’s role in society, many of our initiatives are not linked exclusively to our core business. For example, we have installed one of the region’s largest photovoltaic plants on the roof of our Swiss headquarters, as well as creating a mobility programme (which received the ‘2013 Mobility’ award from the City of Mendrisio) to encourage our employees to use public transportation or to car-share, and last but not least, we co-operate with the University of Applied Sciences and Arts of Southern Switzerland (SUPSI) by awarding a prize to the student with the year’s best diploma.
For the past five years, we have published our Sustainability Report (on www.argor.com), providing a tool for internal control and a stimulus for continuous improvement of our environmental, social and economic commitment.
Dr Wilfried H. Hörner completed his doctoral thesis in Chemistry in 1979 at the Julius Echter University of Würzburg in Chemistry, specialising in the sector of environmental protection (waste gas desulfurisation). Subsequently he was appointed as Head of Research and Development Precious Metal Refining and Products of W. C. Heraeus GmbH, Germany, until 1983. He then became Vice President & Technical Director to Heraeus Ltd. Hong Kong until 1987, before being appointed as Sales Manager World (Chemicals & Refining) of W. C. Heraeus GmbH, Germany. In 1988 he moved to Argor-Heraeus SA, Switzerland as Technical Director a position held until 1999, before becoming Associate & Director of Argor- Heraeus SA with responsibility for marketing and technical management. Since 2013 he has held the position of co–CEO of Argor- Heraeus SA.
He has actively cooperated for many years in a number of internal and external responsible sourcing initiatives and forums and is a member of the Standard Committee and Member of the Board of Directors of the Responsible Jewellery Council.
The roof of Argor-Heraeus’s headquarters in Mendrisio, one of the region’s largest photovoltaic plants
LBMA Best Practice Toolkit – Co-operating for better traceability
The LBMA has recently issued the ‘LBMA Best Practice Toolkit’, designed to make it easier for refiners to manage due diligence procedures for their value chain, in conformity with the standards required by the LBMA Responsible Gold Guidance (RGG), for gold coming from mines as well as from scrap and other sources.
The toolkit, comprising a set of questionnaires, checklists and evaluation sheets, was conceived to help not only refiners, but other industry players as well, with the clear goal of creating greater security and consistency in due diligence procedures. For example, a mine or bank that wants to process its gold at an LBMA Good Delivery refiner can use the questionnaire to prepare all of the documentation required for the internal evaluation of the customer and/or the transaction. Likewise, other operators in the value chain that want to carry out a due diligence procedure – regardless of their size and experience – can also use the toolkit. The toolkit can also help auditors interpret the LBMA RGG and evaluate the refiner’s proper application of diligence obligations with respect to these standards.
The toolkit, created in collaboration with the LBMA by Argor-Heraeus, PAMP and Metalor, Switzerland’s three largest refiners, is a good example of how co-operation among specialists can serve as a stimulus for developing a more responsible precious metals industry. Starting in August 2013, these three companies worked together for more than a year, providing their extensive know-how in due diligence to develop a unique toolkit that helps provide guidance and assistance to the entire industry.
The toolkit is available on the LMBA website: http://www.lbma.org.uk/respons...
A tangible effort to help artisanal and small-scale mines enter international markets
Artisanal and small-scale mines are one of the most delicate links in the precious metals value chain, because they are small mines that sometimes operate without authorisation and/or without adequate machinery and technology. They are found primarily in developing nations, where a great number of people depend on them directly or indirectly. The most critical aspect of their operation is the protection of workers and the environment.
Moreover, these mines are often excluded from the official precious metals market, which for years has been imposing increasingly strict standards, rules and procedures. Mines that are unable to comply with these standards are barred from the official market, with all of the potential consequences that may result.
Therefore, in recent years, a series of initiatives have been launched to help artisanal and small-scale mines comply with standards for the traceability of materials and for work/environmental conditions, so that they may satisfy requirements for selling mined metals on official markets. These initiatives include the Swiss Better Gold Initiative, the Max Havelaar ‘Fair Trade Gold’ initiative and the ‘Fair mined Standard v. 2.0’ initiative of the Association for Responsible Mining (recently recognised as a valid standard for the RJC Chain-of-Custody certification).
Argor-Heraeus actively promotes these initiatives: for example, it is one of the main supporters of the Swiss Better Gold Initiative, a founding member of the Swiss Better Gold Association, and participates in the launch of analogous projects both in Switzerland and internationally. Recently, such initiatives have started to deliver the first results. For instance, the Peruvian mine Sotrami is now producing certified gold and is able to sell it internationally with the support of these initiatives, with another mine from the same country, Macdesa, about to become certified.