The objective of Step 1 is to establish appropriate gold supply chain due diligence policies and governance structures to oversee the prevention and mitigation of threat finance risks and to consider ESG factors, as defined below, in the Refiner’s gold supply chain.

1.1. Adopt and commit to a policy for gold supply chain due diligence

Refiners must adopt a gold supply chain policy that incorporates the risks and risk management measures outlined in Annex II of the OECD Due Diligence Guidance (OECD Annex II) and extends to addressing adverse ESG factors in the Refiner’s primary gold supply chain.

Threat financing (includes conflict risks as per the OECD Annex II)

Systematic or widespread human rights abuses associated with the extraction, transport or trade of gold, including:

  • Any forms of torture, or inhuman and degrading treatment
  • Forced or compulsory labour
  • Worst forms of child labour
  • Widespread sexual violence or other gross human rights violations
  • War crimes, crimes against humanity or genocide.

Direct or indirect support to illegitimate non-state armed groups, or public or private security forces (“illegitimate non-state armed groups, public or private security forces”)7 which:

  • Illegally control mines, sites, traders or other intermediaries, and transport routes through the
    supply chains; or
  • Illegally tax or extort money or minerals through the supply chains.

Bribery and fraudulent misrepresentation of the origin of gold.

Non-compliance with taxes, fees and royalties due to governments related to mineral extraction, trade and export from Conflict-Affected and High-Risk Areas (CAHRAs).

Money laundering or terrorism financing.

Contribution to conflict.

Refiners are expected to address the ESG factors in their primary gold supply chain by making enquiries on policies and practices for the ESG factors noted below, and by using the Refiners Toolkit. ESG considerations are risk based to reflect the nature, size and complexity of the counterparty.

ESG Factors

Compliance with environmental, health, safety and labour regulation in country of operation and/or company policy.

Environmental management, including:

  • Air, water, land pollution and incident management plans
  • Water stewardship, especially in water scarce and stressed areas
  • Unauthorised sourcing from World Heritage Sites and Protected Areas.

Storage, handling, and disposal of hazardous chemicals, including mercury and cyanide.

Note: LBMA recognises that mercury is used mainly in Artisanal and Small-Scale Mining (ASM) sources and therefore does not ban such supply chains. Instead, LBMA requires Refiners working with such artisanal supply chains to assist them in establishing processes to use mercury in a safe manner and to limit negative impacts on the environment and health and safety, and to find alternative solutions to mercury.

Refiners should engage with upstream producers to encourage them to comply with the International Cyanide Management Code.

Management of labour issues, including remuneration, working hours, collective bargaining, discrimination, diversity, disputes and safeguarding of workers.

Community engagement and management programmes (land acquisition and community resettlement, cultural heritage sites and indigenous people, closure planning and safeguarding of vulnerable populations).

Management of business integrity and ethical conduct, and supporting the implementation of relevant initiatives such as the Extractive Industry Transparency Initiative (EITI).

The policy (or supporting process documentation) should include sufficient details on the gold supply chain due diligence. Refiners may, however, choose to publish a concise policy commitment document.

Minimum criteria for internal (or external) supply chain policy document:

  • Scope
  • Organisation and responsibilities
  • Identification and assessment of threat finance risks and consideration of ESG factors, including all those defined above
  • Detailed and meaningful Know Your Counterparty (KYC) and supply chain due diligence processes that, at a minimum, meet RGG Step 2.1 requirements
  • Transaction monitoring processes that, at a minimum, meet RGG Step 2.1 requirements
  • Criteria for high-risk supply chains that, at a minimum, meet RGG Step 2.2 requirements
  • KYC and supply chain due diligence record maintenance requirements
  • Employee training programme.

1.2.Establish management structures to support supply chain due diligence

Refiners must establish internal governance structures to provide effective oversight of the implementation and continuous improvement of the supply chain due diligence programme.

Board level oversight

As a minimum, the Refiner must assign authority and accountability to the Board, or a committee appointed by the Board (and for the purposes of this Guidance, both the Board, and/or Board Committee are referred to as the Board Committee).

Board accountability should include, but is not limited to:

  • Having the necessary competence, knowledge and experience, or utilising external expert advisors to provide oversight of the supply chain due diligence framework and outcomes.
  • Ensuring internal accountability for the effectiveness of the supply chain due diligence policies and processes.
  • Assessing whether effective structures and communication processes are in place for critical information, including the company policy, to reach relevant employees and gold-supplying counterparties.
  • Regularly, and at a minimum annually, assessing the effectiveness of supply chain due diligence policies and processes to drive continuous improvement.
  • Assessing whether an appropriate Compliance Officer has been appointed to take responsibility for all matters regarding the gold supply chain.
  • Assessing whether the Compliance Officer has sufficient support in terms of the availability of resources necessary to support the operation and monitoring of the supply chain due diligence processes and systems.

Compliance Officer

The Refiner must appoint a Compliance Officer, who must be a senior person in the organisation, reporting directly to the CEO (or equivalent) and/or the Board.

Compliance Officer’s responsibilities should include, but are not limited to:

  • Reviewing the gold supply chain due diligence processes and systems to meet the objectives of the RGG and the Refiner’s risk management appetite.
  • Ensuring effective structures and communication processes are in place for critical information, including the company policy, to reach relevant employees and gold-supplying counterparties.
  • Ensuring the availability of sufficient resources (including capacity and experience) necessary to support the operation and monitoring of the supply chain due diligence processes and systems.
  • Training employees with respect to supply chain risks (including threat finance and ESG) and preparing and updating of the Refiner’s gold Supply Chain Policy and procedures.
  • Reviewing Know Your Customer (KYC) files and risk classifications, and requesting additional documentation or information, as necessary.
  • Ensuring that appropriate measures are executed in the case of high-risk supply chains or transactions.
  • Providing proper and timely information for the Board to perform its duties.


Refiners must develop an ongoing gold supply chain training programme for all staff involved in the gold supply chain. Details of this activity should be recorded, with appropriate monitoring of attendance and understanding of the supply chain risks and due diligence processes.

Payment through official banking channels

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. The only permissible exceptions to this rule include:

  • Cash purchases above the threshold with suppliers with records of government-issued identification and a purchase receipt which can be used for income tax purposes, where applicable.
  • Cash purchases of legitimate ASM gold, 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.

These ASM practices and/or cash transactions below the stipulated threshold should be supported by verifiable information and approved by the Compliance Officer.

Cooperation with government authorities

Refiners must cooperate fully and transparently with government authorities and provide full access to records and information, as appropriate. Authorities include national or international law enforcement agencies and customs officials.

Maintaining records

Refiners must maintain adequate records to demonstrate appropriate and ongoing risk identification, due diligence and traceability. Records are required to be maintained for at least five years, or the minimum timeframe stipulated by local regulatory requirements, following the end of the Refiner’s reporting year.

1.3 Establish a gold traceability system

The Refiner must establish a system of controls for visibility and transparency over the supply chain. This includes a chain of custody or traceability system that identifies the origin of the gold and the upstream partners involved in the supply chain, and a mechanism to trace the input of each lot refined and the first destination of each product shipment. Material segregation is not required.

Supply chain traceability system

The traceability system should collect and maintain supply chain information for each lot of Mined Gold, Recycled Gold or other feedstock refined.

The traceability information should include, but is not limited to:

  • Proof of mining origin for primary product (e.g., official government-issued certificate of origin, audited chain of custody documentation, blockchain traceability records, formal packing list).
  • Proof of origin for Recycled Gold and Grandfathered Stocks (e.g., audited chain of custody information, blockchain traceability records, formal invoices or packing lists).
  • A unique reference number assigned to each input and output in order for any tampering to be evident.
  • Type of gold received (including source):
    o Mined Gold: LSM, ASM, Mining By-product or gold sourced from owned mines.
    o Recycled Gold: unprocessed, melted, Industrial By-product.
    o Grandfathered Stocks.
  • Weight and assay: declared and processed.
  • Export and import form for high-risk transactions, if applicable.
  • Shipping/transportation documents (waybill/airway bill, pro forma invoice, if applicable) to establish chain of custody from origin to refinery.
  • Date of arrival at the refinery and date of assay finalisation.

LBMA encourages Refiners to consider technology solutions (e.g., blockchain, machine learning or artificial intelligence), where feasible, to enhance transparency and efficiency in supply chain traceability.

1.4 Strengthen company engagement with gold-supplying counterparties

Refiners should build long-term relationships based on trust and mutual recognition with suppliers.

Refiner’s responsibilities include, but are not limited to:

Refiners should require the gold-supplying counterparty to commit to either:

  • the Refiner’s gold Supply Chain Policy; or
  • the counterparty’s own gold supply chain policy, which at a minimum should be consistent with the OECD Annex II.

The Refiner’s gold Supply Chain Policy or its requirements, or the counterparties’ own OECD Annex II aligned gold supply chain policies or requirements, must be incorporated into contracts and/or agreements between the Refiner and its gold-supplying counterparties.

Capacity building

Where appropriate, Refiners should assist in establishing processes to promote responsible mining and sourcing practices throughout the supply chain and assist gold-supplying counterparties or prospective suppliers, including legitimate ASM and local traders, in improving their supply chain practices. For example, Refiners should communicate their expectation and provide guidance or share good practices during on-site visits. Refiners may also consult and work together with national and industry authorities, local NGOs, human rights institutions, donor agencies and large-scale mining, etc., to support gold supplying counterparties.

1.5 Establish a confidential grievance mechanism

Refiners must develop a mechanism that allows any employee or external stakeholder (intended user) to voice concerns over the gold supply chain or any newly identified risk. Such mechanisms may be provided directly or through collaborative arrangements with other companies or organisations such as an Industry Programme or Institutionalised Mechanism.8

The grievance mechanism should be based on, but not limited to, the following principles:

  • Accessible: The mechanism should be known and usable by all intended users without fear of reprisal, and should include considerations for language, literacy, costs, physical location and technology.
  • Independent: The mechanism should have a formal and independent oversight structure (e.g., the Refiner’s Compliance Department) that ensures parties cannot interfere with fair conduct.
  • Respectful: All complaints should be treated seriously and with respect.
  • Transparent: The mechanism should have procedures to keep parties informed about the progress of their grievances through each stage and should provide sufficient information to build confidence in its effectiveness and meet any public interest reporting requirements.
  • Contribute to continuous learning: The mechanism should provide a source for identifying lessons for improving both the mechanism and preventing future grievance and harm.

7 UN Office of the High Commissioner on Human Rights:

8 LBMA, the RMI and the RJC have collaborated to develop an online cross-industry platform to screen and address grievances linked to smelters and refiners present in global supply chains. It can be accessed at