Responsible Sourcing Newsletter: July 2021

Consultation Feedback to Shape RGG9

We would like to convey our thanks to the many partners and stakeholders for their robust and constructive feedback on the first draft of the Responsible Gold Guidance (RGG). There has been strong engagement from several stakeholders who are keen to support the industry and we are confident that the feedback will not only keep the RGG fit for purpose but maintain its place as a gold standard in responsible sourcing. We are currently collating and assessing the responses and look forward to sharing the second draft later in September.

If you missed your chance to comment on the first draft, we encourage you to reach out to us during the second round of consultations.

Neil Harby (Chief Technical Officer, LBMA) and Nirali Shah (Chief Operating Officer, Responsible Gold Supply Chain LLC) featured on a webinar in June to discuss the latest iteration of the Responsible Gold Guidance -RGGv9. Watch the webinar here.

Spotlight Mali: Identifying CAHRAs, ESG risks and undertaking credible risk mitigation

Readers may have noticed our habit of shining a light on emerging issues or under-reported geographic locations to tell the ever-broadening story of responsible sourcing.

One piece of feedback we have received from multiple RGG submissions is a request that LBMA maintains a definitive list of conflict-affected and high-risk areas (CAHRAs) against which refiners can assess the risks in their supply chains—or be evaluated by auditors or NGOs for their conformance with responsible sourcing standards. One such example would be the CAHRA list that supplements the European Union’s Conflict Minerals Regulation.

The RGG’s greater emphasis on environmental, social, and governance issues (ESG) has similarly elicited calls for specificity on how to identify and manage potential ESG risks.

This month we are turning our attention to the gold-rich region of West Africa to illustrate the limitations of this approach.

Mali, for example, is on the EU CAHRA list, mostly due to the proximity of its artisanal mining sector to a range of risks. The most recent report by the UN Group of Experts to Mali raised concerns about the trafficking of children for labour in gold mines; while the Pretoria-based Institute of Security Studies (ISS) warned that gold mining in the Eastern part of the country offers violent extremists groups an opportunity to expand their membership and reach. Yet another ISS report examined how the gold sector was damaging the environment and fuelling local conflicts.

Taken together, stories like these and a defined CAHRA list may lead some refiners to disengage entirely, rather than fully assess whether their particular supply chain is even impacted by the above-mentioned risks. Such a list may also have the unintended consequence of black-listing one country to the detriment of other equally risky (and often related) pockets of concern in other countries.

If one consults the map that accompanies the EU list, one will notice that neighbouring gold-producing countries—such as Ghana, Burkina Faso, and Côte d’Ivoire—all have established illicit trades and other high risks indicators, but are not on the list. Neither are other countries known to be key illicit trading hubs such as Uganda and Kenya. We don’t raise these oversights to single out or disparage the EU CAHRA list, but rather highlight how a list, in and of itself, does not advance due diligence.

According to the OECD guidance, it is the refiner — not LBMA – that determines their risk levels, and appropriate KYC or mitigation responses. Requests that LBMA provides refiners with definitive lists of CAHRAs, or ESG risks, diminishes the responsibility refiners have to continuously identify and mitigate risks in their supply chain — a condition LBMA refiners have been expected to meet since the inception of responsible sourcing.

Responsible Sourcing News

Africa:

• Africa: With Groups Fueled by Drones and Gold, Terror in Africa Tops Concerns in UN Report. Homeland Security Today
• Central Africa: Criminals are cashing in on COVID-19 surge in gold prices. Interpol
• Burkina Faso: Jihadist terrorism takes hold in Burkina Faso. Market Research Telecast
• Burkina Faso: Instability in the Sahel: how a jihadi gold rush is fuelling violence in Africa. FT
• Burkina Faso/Ghana: Joint Committee to be formed to address Ghana-Burkina Faso boundary challenges. MyJoy
• Ghana: Ghanaians living without water because of galamsey make up 28% of population. GhanaWeb
• Zimbabwe: Gender Commission calls for mining reforms. 263Chat
• Zimbabwe: Mining Threatens Wildlife, Sacred Sites — and People. Global Press Journal

Americas:

• Brazil: ‘Stampede’ of legislation threatens accelerated destruction of the Amazon. Mongabay
• Colombia: Illegal gold mining on Colombia's rivers on the rise. France24
• Guyana: Venezuela's Indigenous Warao Press-Ganged into Guyana's Illegal Gold Mines. InSight Crime
• Peru: Technology boosts efforts to curb tree loss in Amazon. BBC
• Peru: Toxic metals studies add to frustrations surrounding Swiss-owned mine in Peru. Swissinfo.ch
• Peru: Peruvian environmental defenders take their fight to the U.S. Supreme Court. Earthrights International

Asia:

• Indonesia: Activists take Indonesia’s mining law to court, but don’t expect much. Mongabay
• Indonesia: The battle for Indonesia's Gold Island. BBC

Europe:

• Romania: UNESCO names Romanian ancient gold mine settlement a world heritage site. Reuters

Worldwide:

• Report: Mercury exposure of women in four Latin American gold mining countries. June 2021. International Pollutant Elimination Network (IPEN)
• Report: Progress and gaps in implementation of UN Guiding Principles on Business & Human Rights and Indigenous Peoples by companies and multi-stakeholders initiatives. June 2021. Indigenous People’s Rights International
• Projects: Project Peek Kenya and Uganda: Making Sourcing from ASM a Reality. EPRM

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