Responsible Sourcing Newsletter: October 2021

Wayne Gretzky is an ice hockey legend. Many of his records—including all-time leading goal scorer in the National Hockey League—remain unbroken more than 20 years after his retirement from professional play with the Los Angeles Kings.

When once asked the secret of his success, he replied: “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

Gretzky’s motto sums up many of our thoughts as we conclude our second round of public consultations on version 9 of the Responsible Gold Guidance (RGG).

While the consultations offered no shortage of constructive suggestions on how to improve the RGG, it was impossible to include all ideas. With our focus on making amendments that supported our strategic objectives—particularly those found in our recommendations to International Bullion Centres (IBCs)— we were forced to park some ideas for future iterations of the RGG.

This is not to punt them into the long grass. As the independent precious metals authority, LBMA has an obligation and responsibility to advance standards for the common good of the global industry. We recognise that the ethical landscape is continually shifting and that as, a market leader, LBMA must not only be attuned to these shifts, but be agile enough to adapt to meet the challenge brought on by emerging issues or vulnerabilities. To paraphrase Gretzky, we need to be where the challenges are today, but also thinking ahead for where the proverbial puck is going.

In recent months, and through the RGG consultations, we recognise several issues that require additional attention by LBMA and Good Delivery List (GDL) refiners:

• Environmental, Social and Governance (ESG): There is no doubting that ESG is a growing concern, and that those that dismiss it do so at their own peril. It’s at the heart of several UN Sustainable Development Goals (SDGs), as well as debates about whether it could help or hinder global efforts to meet our climate change goals. RGG Version 9 will require refiners to consider ESG impacts as part of their due diligence of suppliers. And LBMA has begun the process of agreeing a 'handshake' with the World Gold Council’s Responsible Gold Mining Principles (RGMPs), affording a seamless ESG assurance framework covering the supply chain from miner to refiner. This is positive news; however, much work still needs to be done. Future iterations of the RGG will certainly add further ESG requirements, but it will also involve working with refiners (and auditors) as they identify, manage and grow their awareness of new ESG risks.

• Artisanal and Small-Scale Mining (ASM): Artisanal mining accounts for 20% of annual mined production, but less than 1% of the throughput of GDL refiners. The takeaway from that statistic is that ten years after the advent of the OECD Due Diligence Guidance for Conflict-affected and High-risk areas, ASM production continues to be unnecessarily stigmatized and avoided by GDL refiners and other downstream actors. Looking ahead to 2022, LBMA intends to open a series of public dialogues on ways GDL refiners can directly source more from ASM suppliers. This will include launching a feasibility study that explores solutions to common impediments to sourcing, and innovative ways and means by which the status quo can change. A recent LBMA webinar explored one possibility -- how industrial miners could help the ASM sector — and we are excited to open a conversation with all stakeholders on how to stickhandle this ‘puck’ into the net.