Delivering on an agenda as ambitious as the Responsible Sourcing Programme would be impossible without the collaboration of a broad and diverse group of like-minded organisations and individuals.

Throughout this report, we have highlighted how Refiners, Assurance Providers and the members of the ASM Taskforce have supported our efforts to strengthen and nurture the expansion of the Programme and develop more responsible supply chains.

This kind of engagement is a long-standing practice at LBMA. Over the years, we have participated in numerous multi-stakeholder forums and partnerships, working across perspectives and a diverse spectrum of actors - government, industry partners and civil society groups - to champion mutually beneficial outcomes.

Over the course of the last year, however, LBMA paid special attention to rebuilding relationships with civil society groups that had suffered as a consequence of the Covid pandemic. While LBMA maintained virtual connections with a core group of civil society organisations (CSOs), our engagement with the broader community was hampered as in-person meetings and impromptu, yet invaluable, hallway discussions at events such as the annual OECD Responsible Minerals Forum dropped off completely. We also took note of the changing composition of CSOs participating in discussions and forums related to responsible sourcing.

Some organisations had pivoted to new areas of focus, while among those that remained there was a raft of new and unfamiliar faces. As one expects of an evolving sustainability landscape,
we also saw entirely new organisations enter the fray, raising new concerns that required LBMA’s attention.

As a result, 2024 served to reset our engagement with our civil society colleagues and consider ways to re-establish old relationships, solidify new ones and improve upon the past.

At the same time, the expansion of the Responsible Sourcing Programme and the activities, objectives and deliverables that emerged from that work compelled LBMA to also reconsider how better to communicate with key stakeholders.

While the monthly newsletter and this report serve as the main channels through which LBMA shares responsible sourcing related information, we introduced several new communication products to support the implementation of the Programme and share the progress of our work.

Civil Society Engagement

Meaningful engagement with civil society organisations (CSOs) has been a cornerstone of LBMA’s Responsible Sourcing Programme since the very beginning.

CSOs often bring to light legitimate concerns about the governance of precious metals supply chains. Sometimes their field presence or analysis can give us better appreciation or line of sight of certain issues. While the relationship can at times be conflictual, more often than not their concerns inform our understanding of emerging issues and changing public norms, and they act as harbingers that guides the improvement of our sourcing standards and policies.

IN-PERSON MEETINGS

In rekindling dialogue and engagement, LBMA held two in-person meetings with civil society partners during the first half of 2024 - first during the Sustainability and Responsible Sourcing Summit in London in March, and shortly thereafter at the OECD Responsible Minerals Forum in Paris in May. During the first meeting, LBMA highlighted the progress made on the ASM Initiative and improvements made to the Programme, particularly with respect to auditor engagement, training and performance, and on data collection and transparency.

Both meetings allowed for constructive conversations on CSOs’ calls for improvements related to traceability in the recycled market, sourcing from environmentally protected areas in the Brazilian Amazon and meeting the disclosure requirements of Footnote 59 of the OECD Guidance. LBMA also clarified the circumstances that instigate an Incident Review Process and an incident’s progression through the 11-step process.

In addition, illegal mining in the Amazon was raised directly with all Refiners sourcing from non-industrial mines in 2023 and repeatedly highlighted in the monthly Responsible Sourcing Newsletter to draw Refiners’ attention to a potential threat to their supply chains. As explained below, it was also highlighted in a Sourcing Advisory issued in January.

LBMA similarly raised Footnote 59 with the OECD and asked it to lead a moderated discussion to clarify its implementation. A meeting is tentatively set for later this year.

DETAILED RESPONSES

In addition to the in-person meetings, LBMA provided a lengthy written response to a letter that several organisations - many of whom attended both meetings - had sent in March raising similar concerns. While, as a practice, LBMA always responds to CSO letters, this response was more fulsome than usual as their letter contained several unfounded allegations and misunderstandings of LBMA policies and practices, including the due diligence undertaken by our Refiners and a perceived lack of transparency regarding the disclosure of industrial mines from which they receive material.

In the latter instance, we explained that while LBMA remained open to such disclosure in future editions of the RGG, Refiners were often bound by commercial confidentiality agreements with their customers that precluded the sharing of such information. This said, the 2023 decision by all 31 member companies of the World Gold Council to disclose the refiners that process their material was a welcome commitment.

Both the meetings and our correspondence with CSOs provided an opportunity for LBMA to showcase our continuous improvement to sourcing practices, and our responsiveness to acting on practical and applicable suggestions for improvement, and to extend an invitation for CSOs to contribute further recommendations regarding enhancements to RGG v10, which LBMA will begin to scope during the latter half of 2024.

Communication to Support Awareness and Understanding

LBMA has continued to increase focus on stronger communications with Refiners and Assurance Providers, which has improved awareness of supply chain risks and to clarify our expectations with respect to the faithful implementation of sourcing and disclosure requirements. LBMA does not generate an official list of conflict-affected and high-risk areas (CAHRAs) for Refiners to follow. We have always believed that the Refiners, not LBMA, should manage the responsibility of appropriately assessing any risks in their supply chains. The RGG supports this process by recommending several tools against which Refiners can measure risks, such as sanctions regimes, the European Union’s CAHRA list or the Heidelberg Barometer.

However, LBMA realised there was a public interest in sharing any credible market intelligence brought to our attention, if it supported the greater good of raising awareness of supply chain risks and the proactive due diligence monitoring and risk mitigation by Refiners. With this in mind, LBMA released the inaugural edition of the Sourcing Advisory in January. The issue highlighted emerging trends and sourcing threats in Brazil, the Democratic Republic of Congo, Sudan, the United Arab Emirates and Zimbabwe.

In issuing the Sourcing Advisory, we encouraged Refiners to apply the appropriate enhanced due diligence measures on potentially affected supply chains and report any adverse findings to LBMA.

Following the overwhelmingly positive feedback, LBMA intends to make the Sourcing Advisory a more regular communication product, with a view to issuing 2 to 3 per year as information allows.

LBMA also increased the amount of internal-facing communication with Refiners and Assurance Providers as part of earlier mentioned efforts to improve the implementation of the Assurance
Programme.

The release of the Assurance Providers Toolkit, and other associated guidance documents mentioned earlier in this report, was done with the express purpose of better explaining and streamlining the processes to both parties, reducing errors or omissions, and improving consistency in reporting across assurance reports. As with the Sourcing Advisory, LBMA has previously preferred not to offer prescriptive direction to APs for fear of it being perceived as interfering in the assurance process; however, following feedback raised during the first EU alignment assessment regarding inconsistency of approaches by Assurance Providers, we felt the guidance documents were appropriate and would be beneficial. This has further supported our focus on continuous improvement.

INCREASED ENGAGEMENT

We also sought to increase engagement by initiating the ‘Ask RS’ online form, whereby stakeholders could pose any responsible sourcing related questions. The questions are collated and answered in the monthly Responsible Sourcing Newsletter. This kind of interaction is useful to the Responsible Sourcing team as it gives us further insights into areas where Assurance Providers and Refiners may require additional support and training.

While there are always heightened interactions between the Responsible Sourcing team and Assurance Providers and Refiners during the audit season, the levels of constructive feedback - via email and in-person calls - increased substantially during the pre- and post-assessment phase.

The increased focus on engagement and communication with key stakeholders - Refiners, Assurance Providers and civil society groups - all serve a broader purpose of informing LBMA’s thinking as we look toward drafting version 10 of the RGG in 2025.