Responsible Sourcing Newsletter: November 2023

Supporting the Integrity of LBMA's Assurance Programme

It is no exaggeration to say that maintaining public trust is critical to the credibility of LBMA’s Responsible Sourcing Programme.

As the global precious metals authority, our commitment to the continuous improvement of our policies and practices is measured by our responsiveness and adaptability to emerging trends and challenges, as well as public feedback on our performance.

In recognition of the critical role the assurance programme plays in assessing and validating Refiners’ conformance with the Responsible Gold Guidance (RGG), significant time and resources were invested over the course of 2023 in strengthening the training and oversight of assurance providers recognised by LBMA.

Earlier this month, LBMA released a suite of guidance documents to support assurance providers before, during and after their annual engagements with GDL Refiners, such as:

• An Assurance Providers Toolkit that delivers additional support in instances when there is a disagreement or need to push for greater clarity and comfort about a Refiners policies and practices.
• A Pre-Assurance Assessment form that providers should submit to LBMA outlining such things as their findings from open-source research conducted on the auditee Refiner prior to their site visit, their proposed sample size of records they plan to test, and a list of documents they will review during the assurance.
• A Guide to Completing Refiner Data and an amended Refiner Data Collection Form, designed to enhance the analysis of Country of Origin data submitted by Refiners to LBMA as part of their annual assurance reporting.
• A Non-Conformances Template to ensure consistency by Refiners in their submission of Corrective Action Plan (CAP) if a high-risk or medium-risk non-conformance has been identified during the assurance and/or if the Refiner fails to satisfy one or more requirements set out in Steps 1-5 of the Responsible Gold Guidance (RGG) or Responsible Silver Guidance (RSG).

These documents are intended to complement - not replace - the Third Party Audit Guidance (TPAG) published last December, with a view to strengthening the overall implementation of the RGG, RSG and assurance requirements. The pre-assurance checklist, for example, will serve as the basis for a check-in call between LBMA and assurance providers prior to the site visit portion of the assurance engagement, particularly for high-risk Refiners or those that may have experienced sourcing challenges over the previous year. The checklist will provide LBMA with greater line of sight over the preparedness and understanding by assurance providers of issues and risks they should raise with Refiners during the actual engagement.

In addition to supporting the policy architecture of assurance providers, LBMA also overhauled the annual, mandatory training programme by creating our own in-house e-learning platform, rather than rely on third party service providers as in the past. This training familiarises assurance providers with the requirements outlined in the RGG and the TPAG, but also incorporates case studies based on sourcing vulnerabilities that arose during or outside of this year’s assurance process. The training also tests the competency and performance of assurance providers - increasing the previous minimum pass rate to 80% (up from 70% in previous years) and allowing for their removal should they score below that threshold.

This year, LBMA further improved the oversight of the assurance process by shadowing six GDL refiners during their annual engagements. These shadows not only provide the Responsible Sourcing Team with first-hand insights into how assurances are conducted but highlight possible areas of improvement to be incorporated in future trainings.

This comprehensive improvement to the audit programme all speaks to a wider effort to strengthen the implementation of the Responsible Sourcing Programme and the knowledge base of assurance providers. We also hope it serves as a best practice example to other industry audit schemes looking to do the same.

With the holiday season almost upon us, this newsletter is the last one for 2023. With that in mind, I want to take the opportunity, on behalf of the entire Responsible Sourcing team, to wish you and your families a restful and celebratory festive holiday season. We look forward to continuing our work together in 2024!