LBMA, the independent authority for precious metals, is committed to advancing standards and ensuring that responsible supply chains are established and maintained. To further this objective, LBMA has developed recommendations for International Bullion Centres (IBCs) to adopt, to support the OECD Due Diligence Guidance framework and recognise the key findings from the Financial Action Task Force. These recommendations focus on the following strategic priorities: (a) responsible sourcing of recycled gold, (b) eliminating cash transactions and (c) support for artisanal and small-scale mining (ASM).
Ruth also participated in a panel discussion, "AML, Corporate Governance and Responsible Sourcing", at the IPMI 44th Annual Conference, 16-17 November 2020.
Watch the video of Ruth's speech
International Bullion Centres (IBCs) IBCs have been identified initially as the cornerstones of the recycled gold market: China; Hong Kong SAR; India; Japan; Russia; Singapore; South Africa; Switzerland; Turkey; UAE; UK; and USA.
These Centres operate important market infrastructure for bullion trading activities, including trading exchanges; storage facilities; processing, recycling and refining facilities; international and domestic logistics facilities; domestic consumption; and regulatory oversight. The breadth of the activities undertaken within these IBCs and the involvement of international counterparties mean these Centres can be vulnerable to responsible sourcing risks. Responsible sourcing vulnerabilities in IBCs can and will cause a negative impact for the financial institutions, refiners, investors, mints, jewellery and electronic companies who rely on the integrity of the bullion market.
Although LBMA administers
the Good Delivery system, ultimately the responsibility to ensure
bullion is ethically sourced is shared across the industry. This means
the Responsible Sourcing Programme is part of a wider ecosystem which
together ensures coverage in parts of the supply chain that other
components simply cannot reach. This means collaboration,
intelligence-sharing and consultation are important to ensure the
highest standards of responsible sourcing across the industry.
LBMA believes that to address these strategic priorities, IBCs should implement (or demonstrate consistency with) the following five key recommendations and their requirements if it is to be part of a globally responsible supply chain:
- Effective scrutiny and verification of local and regional supply chains;
- Effective regulation of local and regional supply chains;
- Effective enforcement powers;
- Effective co-operation with local, regional and international organisations;
- Develop ASM specific guidance to support and further legitimise responsible ASM supply.
Call to Action
calls on all IBCs to review the Recommendations and develop and adopt
an Action Plan that addresses any identified shortcomings and ensures
its implementation. Currently, not all IBCs operate to the same
responsible sourcing standards. These inconsistencies in standards could
have a significant impact on the international market should they
Webinar - International Bullion Centre Recommendations
In this webinar, we discussed the International Bullion Centres recommendations in greater depth and, most importantly, how the industry can provide support to ensure the integrity and transparency of the global market. Guest speakers include:
- Sakhila Mirza, Executive Board Director & General Counsel, LBMA
- Tyler Gillard, Head of Due Diligence Centre for Responsible Business Conduct, Unit of the OECD's Investment Division
- Joanne Lebert, Executive Director at IMPACT
- Sasha Lezhnev, Deputy Director of Policy, The Sentry
- Philip Olden, Independent Consultant