Disclosure Guidance Version 3

Ongoing Disclosure

Supply chain due diligence is an ongoing process and Refiners should adopt disclosure practices that enable them to reflect the ongoing nature of due diligence, beyond annual reporting.

The following recommendations and principles are provided to guide Refiners on enhancing their due diligence disclosure:

  • A wider meaning to due diligence: communicating on due diligence outside the annual cycle of reporting is an opportunity for Refiners to demonstrate their efforts on environmental, social and governance issues, beyond strict application of due diligence. Refiners can, for instance, report on their greenhouse gas emissions and efforts to reduce these, or on leverage exerted with counterparties to reduce mercury use in the supply chain, to demonstrate due diligence considerations and progress towards their environmental impacts throughout the supply chain.
  • Transparency: mention the nature of the risks that are being dealt with and give information as to the context in which they might occur. For instance, provide the location in the supply chain and broader geographical area.
  • Proactive engagement: opt for proactive disclosure, rather than reactive communication with regards to potential risks in the supply chain.
  • Acknowledge the complexity of risks: welcome and publicly acknowledge any (new) source of material information with regards to possible risks in the company supply chain and provide external stakeholders with an understanding of the challenges related to the management of these risks.
  • Ongoing communication: show the company efforts in raising awareness about the complexity of the issues.
  • Accountability: assure external stakeholders of the responsibility of the company in managing the potential risks in its supply chain.
  • Predictability: regularly communicate to external stakeholders on the issues that were identified and on the due diligence steps to be implemented, as per the company due diligence and risk management strategy.

Example: Ongoing Communication

This example from a Valcambi – 2019 Press Release explains the sourcing of Colombian ASM gold and related engagement with upstream suppliers on risk mitigation, and also provides some insights in terms of related mitigation efforts.

"To date, five hundred Barequeros have received support from the on-the-ground BGI implementation team to attain the SBGA criteria of socially and environmentally responsible mining practices. As part of the scheme, the miners are subject to strict due diligence before they can sell their gold to Anexpo. The metal is then shipped to Switzerland where Valcambi refines it and Chopard finally uses it in the production of its precious watch and jewellery creations. The programme ensures that the Barequeros receive not only a competitive price but also a special SBGA Better Gold Incentive of 0.70 per gram for them to reinvest into improving their living and working conditions. In addition, this value chain allows them to know the exact destination of their gold.

In El Chocó, Colombia’s second-largest gold producing region and also one of the country’s poorest, artisanal gold mining is an ancestral livelihood for the population of predominantly Afro-Colombians. The Barequeros, comprising 46 percent women, use local traditional alluvial mining techniques with hand equipment such as sluices and panning. No mercury is used, protecting the region’s biodiversity which is among the most unique in the word. To be legally registered, the Barequeros need to obtain a special permit that allows them to produce manually and sell up [to] 420 grams of gold per year."

Example: Transparent Communication

In this example, Argor Heraeus explains its approach for continuing to source from CAHRAs

“Mining is an important industry for the local population. Argor-Heraeus has therefore made it a priority to support better environmental standards and improve labour and living conditions of workers in legal local mining operations. As an example, the “Better Gold Initiative” rewards small mining entities in Peru that implement exemplary environmental, labour and social standards.”

Key Insight

Refiners should follow as much as possible a proactive approach to disclosure (i.e. disclosing information in a timely manner and according to stakeholders’ expectations). However, when facing allegations related to their responsible sourcing practices, there are a few, basic questions that Refiners can address to disclose key, relevant information to external stakeholders and maintain transparency.

At a minimum, Refiners’ communication when responding to an incident should seek to answer the following questions:

  • What is the incident about? What are the underlying issues and risks?
  • Why is the issue important?
  • Who are we talking about? Who are the stakeholders affected by the incident?
  • Where is the incident located? Where in the supply chain was the problem identified?
  • When was the problem occurring and when was it identified? When is the problem going to be addressed?
  • How will it be addressed, by whom and over what period? Will other parties be involved?

When addressing the above questions in a response to an incident, it is important to keep the following key principles in mind:

  • Control the narrative: be factual and accurate.
  • Remain accountable: be engaged and empathetic.
  • Communicate next steps: be progressive and forward-looking.