Paris in Spring? Who doesn’t wish they could be in Paris for the annual OECD Forum on Responsible Mineral Supply Chains? However, following its cancellation last year due to the pandemic, the virtual event was a welcome opportunity to have some overdue dialogue.
The virtual agenda was full of rich discussion about the latest global trends and lessons learned in the implementation of the OECD’s due diligence guidance.
The two-day event wrapped up on Wednesday 28 April, although partner sessions filled out the week. In her capacity as co-chair of the OECD Multistakeholder Governance Group, LBMA’s own Ruth Crowell spoke in the opening session to officially launch the event. Ruth highlighted the need to improve communication between downstream and upstream to ensure that downstream demand can become a force for good on the ground. You can watch Ruth’s remarks in the Forum Opening session.
EU Conflict Minerals Regulation – Implementation Update
Another session covered industry, government and civil society perspectives of the nascent EU Conflict Minerals Regulation that came into force on Friday 1 January 2021. While many companies already have systems in place that allow data collection to inform risk management practices, it is a matter of adapting those existing systems to conform with the fine print of the regulation. According to the French government, Small and Medium Sized Enterprises (SMEs) are expected to have greater difficulty in developing their systems to meet EU requirements.
Several speakers also highlighted their concern with the 100kg threshold for gold as being vulnerable to abuse by criminals. For example, the threshold would do little to identify — never mind interrupt — possible flows of illicit artisanal and small-scale mining (ASM) gold, especially if broken in several separate transactions.
Speakers mostly agreed that the success of the system will depend on the political, diplomatic and financial leverage used by the EU with producer countries — and that sanctions alone will not change the current situation.
Looking forward, participants also raised the need for a rebranding of the law to the Responsible Minerals Regulation. Proponents of the idea argued that words matter, and such a change would make an affirmative statement that speaks to market demand, rather than something to avoid.
Support for ASM - Risk Mitigation Approach & Capacity Building
One session focussed on the need for a paradigm shift away from de-risking to risk mitigation, particularly with respect to Artisanal and Small-Scale Mining (ASM) supply chains. Speakers emphasised the need for actors to work with local counterparties and partners in order to understand each local context properly — a critical ingredient to all stakeholders’ risk mitigation processes.
Too often de-risking as a risk management approach for actors along the supply chain can be an ineffective approach when applied to conflict-affected or high-risk areas, as it can lead to disengagement with the ASM sector and the communities engaged in problematic activity. This, in turn, can exacerbate conflict, human rights abuses, and environmental degradation. Risk mitigation should also be a continuous exercise, and not just a one-off event, such as when first signing a contract with a new supplier.
LBMA’s Responsible Sourcing Manager, Alan Martin, participated in a panel discussion hosted by the World Gold Council that looked at alternative funding and sourcing methods that could increase sourcing from the ASM sector. The panel included representatives from the Mongolian Central Bank and Argor-Heraeus, who has partnered with IMPACT, a Canadian NGO, and a mining cooperative in Côte d’Ivoire. Currently ASM material only makes up 1% of throughput for Good Delivery List (GDL) refiners. Alan highlighted the innovative approach of PX Précinox — a Swiss-based GDL refiner — who set up an ore processing facility close to ASM mines in Peru. The result is a traceable ASM supply chain that incentivises miners to work within the formalised sector, while simultaneously de-risking their production. You can find out more and watch the session here.
Looking Beyond Central Africa & the Importance of ESG
A noticeable trend in the partner sessions was a focus on sourcing challenges in geographic areas other than Central Africa, where the calls for industry due diligence first began. The growing importance of Environment and Social Governance (ESG) weaved through a number of presentations. Several sessions shone a light on mining and trading vulnerabilities in Latin America — particularly in environmentally protected areas of the Amazon and sanctioned countries like Venezuela. In the latter instance, there was a lot of buzz around the key findings of a forthcoming report investigating illicit gold flows out of the region and their implication for the gold industry. In keeping with this focus on Latin America, our suggested responsible news clippings this month have been tailored to highlight that region.
Make Your Voice Heard
Responsible Gold Guidance Version 9 consultation is launching in Summer 2021. Email email@example.com to hear more about the latest developments and to take part.
Latest Responsible Sourcing News
- Brazil investigates reports of vaccines being exchanged for illegal gold, Reuters
- Brazilian Cerrado Savanna: Wildcat miners descend on Indigenous reserve, Mongabay
- Brazil's indigenous groups protest bill that would allow commercial mining on their land, Kake
- Ecologista Freire Beda muere intoxicado por mercurio en Brasil, TeleSurTV
- Chile environment court questions Norte Abierto mine impact on indigenous neighbors, Reuters
- Movement Against Mining Gains Ground in Ecuador, Nacla
- Ecuador’s New President Ushers in Mining-Friendly Roadmap, Mining Feeds
- British App Traps Peru’s Illegal Goldminers, The Good Men Project
- Peru Candidate Seeks Bigger Cut From Mining, Not State Control, Bloomberg
- Thousands Flee as Venezuela Launches Rare Attack on Rebel Groups, Vice
- Amazon deforestation rose 17% in 'dire' 2020, data shows, Reuters
- Talking about a revolution: What ‘clean’ gold mining would mean for the Amazon, Landscape News
- Mitigating Illicit Convergence in Transnational Financial Crime, Regulation Asia
LBMA's disclaimer on third party content is here.
Webinars & Events
- Deepening Consumer Confidence in the Decade of Action, RJC
- Unlocking the Link Between Responsible Artisanal and Small-scale Gold Mining (ASGM) and Ethical Gold Jewelry, planetGOLD
- Mobile Social Congress: Post COVID-19 Impacts on the Electronics Industry, SETEM Catalunya
- Digital Gold: Part 05, LBMA
- Indian Gold Demand, LBMA
- ESG Week: Energy and Mining Forum, Natural Resources Forum
- Responsible Business & Responsible Minerals Conferences, RBA/RMI