September 24, 2021

Responsible Gold Guidance Version 9: Second Consultation

Following a first round of extensive consultations with stakeholders, LBMA is pleased to launch a second public consultation of the Responsible Gold Guidance (RGG), the document that underpins our Responsible Sourcing Programme.

You can read the full RGG draft here:

Call for Engagement

Once again, we welcome your constructive feedback on this document. Please share your comments to in bullet point form, identifying the relevant page and section to which your comments pertain, or you may complete this online survey.

Deadline for the submission of comments is Tuesday, 12 October 2021.

LBMA would like to thank all stakeholders who have already contributed their ideas and recommendations to the initial draft. While LBMA has endeavoured to include as many suggestions as possible, we regret that not all were able to make it into the second iteration of the draft.

If you notice your feedback is not reflected in this draft, LBMA would like to assure you this is not a rejection of your ideas. Rather it is a case of LBMA aligning the RGG with strategic priorities such as our recommendations for International Bullion Centres, and to allow for a phased-in implementation of key changes.

However, given that the Responsible Sourcing Programme is about ongoing and continuous development, where relevant feedback has not been addressed now, it has been saved for consideration in version 10. We believe this meets the spirit and practicalities of continuous improvement and allows refiners time to fully implement all additional requirements that support our responsible sourcing objectives.

Refiner’s Toolkit – clarifying ESG Responsibilities

We also want to draw your attention to how most of the proposed ESG requirements have moved from the draft RGG to the Refiners Toolkit to better allow for internal assessment of these new obligations. Annex 1, which lists aligned responsible sourcing programmes that are cross-recognized by LBMA, has been dropped and will form a stand-alone document. See the new Refiners Toolkit for more information, below:

Enhancing Refiner Disclosure

RGG 9 also reaffirms our commitment to ongoing improvements to the public disclosure of information by LBMA. This is particularly relevant as LBMA meets the challenge of complying with OECD reporting requirements relating to high-risk supply chains and any discontinuance of relationships due to concerns about a supplier’s sourcing practices. After consultation with the OECD, refiners will disseminate high-level information to LBMA on a phased-in basis, so to allow refiners the opportunity to update their processes for public disclosure. Starting in 2022, refiners will disclose to LBMA the location and number of high-risk suppliers. In 2023, refiners will complete all relevant contractual changes with suppliers to allow for greater disclosure, while continuing to provide information to LBMA. In 2024, the disclosure requirements will be further strengthened following further consultation with the OECD and relevant stakeholders. Future versions of the RGG will focus on fuller public disclosure, with the ultimate intention to provide the full list of information as provided under the gold supplement of the OECD Due Diligence Guidance.

LBMA would like to highlight several other notable changes to the RGG:

Recycled material

Refiners will be required to disclose disaggregated data in their confidential country of origin filings, broken down by the types of recycled material they receive. This will provide LBMA with more accurate data with which monitor and analyse market trends.

Ultimate Beneficial Owners (UBOs)

The UBO threshold has been lowered to 5% or more ownership for mined material and 25% for recycled. This brings the RGG in line with other industry standards LBMA cross-recognizes such as the Responsible Minerals Assurance Process (RMAP) administered by the Responsible Mineral Initiative (RMI). The change provides LBMA with greater awareness of politically exposed persons (PEPs) whose ownership may fall under the previous 25% threshold, but who could still have a reputational impact on a refiner.

Cash transactions

For transactions over $10,000 in value, refiners must make and receive payments for gold through official banking channels and should not undertake any cash-based transactions. Refiners may only make cash transactions with suppliers who have successfully passed a police check and are issued with an official income tax receipt. Such suppliers are limited to a maximum of two such transactions in a calendar year. Cash purchases of legitimate ASM gold may be permissible exceptions to this requirement as long as all transactions involving legitimate ASM gold are made through formal channels from the point of export in the country of production to any onward counterparty. This ASM practice and/or cash transaction below the stipulated threshold should be supported by verifiable information and approved by the Compliance Officer.

Environmental Social Governance (ESG)

As part of their due diligence process, refiners will have to consider and report on adverse ESG factors in their gold supply chain.