Responsible Sourcing Newsletter: December 2024

The Benefits of Peer Learning

Last month, I had the privilege of attending the Responsible Business Alliance (RBA) and Responsible Minerals Initiative (RMI) conference in San Jose, California.

It was my inaugural RMI conference and a welcomed chance for peer learning and exposure to the concerns and preoccupations of a different, more downstream section of the supply chain.

While RMI shares many of the same concerns and preoccupations as LBMA, they occupy a different piece of real estate in the responsible sourcing world we inhabit. Their larger and more diverse membership (over 600 companies, with combined annual revenues of over $8 trillion) provides a familiar but distinctive perspective through which to view commonly shared challenges.

And while like many conferences the RMI event served as an important networking opportunity, there was a heavy emphasis on sessions and side seminars to talk through the finer points of both practical and theoretical debates and challenges facing their members.

Navigating Geopolitical Turbulence

Coming weeks after Donald Trump’s presidential win, the issue of tariffs, geopolitics and their impact on supply chains, particularly those of computer chips, was an inescapable topic of conversation.

A keynote by Chris Miller, author of Chip War: The Fight for the World’s Most Critical Technology, set the scene, arguing that the current “worrisome moment” in favour of tariffs is driven by a confluence of factors that include a reaction to globalisation and changing regulatory frameworks that have the potential to impede, and possibly fracture, supply chains and thwart technological progress and cooperation. Miller’s assessment proved prescient, with China announcing a ban on the export of rare minerals needed for chips a week later.

While the tariff debate between America and its key trade partners is almost certain to dominate the next Administration, many hallway discussions touched on another fear: what will be the impact and implications of an increasing polarised relationship between the two superpowers on responsible sourcing efforts? The concern raised privately by several participants was that the polarisation and deterioration of relations between the two biggest economies could also result in a withdrawal and disengagement from that space by China. Let’s hope this does not come to pass and that lines of communication and cooperation can continue to be nurtured through whatever geopolitical turbulence may lie ahead.

Another key plank of the RMI conference was a series of plenary sessions and “bootcamps” to explore various issues facing their members, covering the gamut from how to comply with emerging ESG requirements, recent forced labour laws introduced in several western markets, or the practicalities of undertaking appropriate and credible supply chain mapping and due diligence.

The Secret to Good Due Diligence? Show, Don't Tell

On the latter issue, a common refrain was an echo of John Ruggie, the late Harvard professor and author of the UN Guiding Principles on Business and Human Rights, who often said that words and commitments to ethical and sustainable practices are meaningless unless companies can demonstrate how they are implementing those promises. That often means being more transparent and honest about how sourcing requirements or risk mitigation strategies were implemented, particularly when considering the multitude of risks associated with mining and the critical and precious minerals sectors.

As one speaker said: “Those companies that disclose risk are more credible that those that don’t, or who declare everything is great.”

A representative of a tech company also gave sage advice to both assurance providers and downstream actors by encouraging them to “gut check” statements when validating claims made by suppliers or auditees.

“If they have cobalt in their supply chain, for example, but don’t list DRC in their supplier smelter list, then how do you explain that when two-thirds of the global cobalt production comes from there?”

Statements like these track with the approach taken by the Responsible Sourcing team while assessing Refiner’s annual assurance reports. While version 9 of the Responsible Gold Guidance (RGG9) expanded significantly both the due diligence and reporting requirements placed on GDL Refiners, LBMA knows that continually evolving public expectations, especially with respect to increased disclosure - and evidence of - the enhanced due diligence or risk mitigation measures taken in response to potential reputational damaging issues, will ensure that that this area remains a constant and incremental focus of improvement.

With most RMI members needing to conform with the Uighur Forced Labour Prevention Act (UFLPA) and the EU Corporate Sustainability Due Diligence Directive (EU CSDDD), there was a significant focus as well on forced labour and human rights. In one session, I was asked to share with RMI members efforts LBMA has taken to date to address forced labour allegations in the gold sector. This includes, for example, requiring certain at-risk Refiners to undertake a special forced labour assurance in addition to their annual assurances.

Overall, attending the RMI conference was much more than just a chance to catch up with friends and colleagues I’ve met along the way. With LBMA set to embark on drafting version 10 of the RGG in early 2025, I left with an abundance of food for thought for how best to respond to current and emerging sourcing challenges requiring our collective consideration and response. A big thank you to the whole RMI team for their hospitality and for all the hard work organising such a thought-provoking event.

A lot has been achieved this year, a feat that would have been impossible without your cooperation and collegiality. Wherever you may sit in our ecosystem - be it as a Refiner, assurance provider, industry colleague or civil society partner - thanks are due to you as well.

As we close out the year, please accept warm seasonal greetings on behalf of the entire Responsible Sourcing team. We hope you have a restful break and prosperous year ahead.

Until then!