The Responsible Sourcing and Compliance Department

In response to the ever-broadening regulatory and sustainability landscape, significant investments were made over the last year to reinforce the operational effectiveness of the team that implements LBMA’s Responsible Sourcing Programme (RSP).

The changes principally sought to grow the size and professional capacity of the team to respond to the expanding workstreams, while also clarifying members’ roles and responsibilities.

Three new positions - project manager, compliance analyst and an additional responsible sourcing coordinator - were created to support the day-to-day work of the department.

Reporting to the Deputy CEO and General Counsel, the department is comprises of two distinct but mutually reinforcing teams tasked with applying necessary support and appropriate oversight to Refiners, LBMA Members and approved Assurance Providers in meeting obligations governing their source practices or business conduct.

The Responsible Sourcing team continues to have the primary duty in respect of the consistent application of the RSP by Refiners and Assurance Providers, as well as acting as the first point of contact for all responsible sourcing queries. The Compliance team complements this work with its focus on due diligence assessments on applicant and accredited Refiners and Members, and leading the Incident Review Process in instances where credible sourcing concerns about a Refiner are brought to LBMA’s attention. The team is also charged with monitoring shifts in the global regulatory landscape, evaluating their possible implications on the precious metals sector, and informing impacted stakeholders accordingly.

The growth of the team reflects the importance and commitment by LBMA to more holistically engage and respond to public expectations of improved business conduct and any emerging regulatory and sustainability demands. It equally enhances LBMA’s ability to more effectively represent the interests of the Refiners and LBMA Members with whom we work. Collectively, members of the Responsible Sourcing team play leadership or support roles in several committees with governance and oversight responsibilities over the adherence to Programme requirements or GDL Rules.

In summary these principally include the:

Compliance Panel (‘ComPan’)

The ComPan supports the assurance review process and monitors the adherence and performance of Refiners and Assurance Providers to the Programme. This includes the immediate review of zero-tolerance non-compliance, approval of the assurance reports of high-risk Refiners, addressing risks and incidents emanating from Refiners’ annual assurances, and responding to concerns related to the performance of Assurance Providers or a Refiner’s sourcing practices. The latter includes leading an investigation to determine whether a particular set of facts warrants the invocation of the Incident Review Process (IRP), and managing and escalating the Process thereafter.

Physical Committee

The Committee has the primary responsibility to ensure that the integrity, quality and standards set by the GDL are maintained; provides scrutiny and risk management of both LBMA and the wider market; and develops and agrees new rules. It advises the LBMA Executive on all matters relating to the Programme and Refiners’ compliance.

Membership Committee

The Committee ensures that the quality of the Association’s Membership is maintained by relying upon the rigorous and through due diligence assessment of prospective GDL Refiners and Members undertaken by the Compliance team. This includes a review of criteria such as an applicant’s ownership structure, its financial stability and any adverse news or profile risks that may result in reputational damage or challenges in fulfilling LBMA rules and requirements.