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12 responsible supply chain learnings from the OECD forum

12 responsible supply chain learnings from the OECD forum

April 29, 2019, by Dr Fabiana Di Lorenzo and Adam Rolfe


The 13th OECD Forum on Responsible Supply Chains has come to an end, and was filled with important industry takeaways.

A few takeaways which relate to ASM:

ASM was explicitly recognised an important contributor to global development. The World Bank estimates that there are 40,179,125 people around the world engaged in ASM.

Standard setters clearly stated their commitment to enabling sourcing from responsible ASMs. This is an important statement, because for years companies have been conservative and avoiding engagement with this sector. Downstream buyers of minerals further made public commitments to improving sourcing practice from ASM, both in response to commodity specific requirements (cobalt) and the tightening international normative and legal framework.

Caution: we have witnessed significant developments in market and downstream regulatory expectations over the last couple of years. In order to ensure continued and strengthened legitimacy in producer countries, it is essential to keep the dialogue open with national governments and regional initiatives.

Photos: The 13th forum on responsible mineral supply chains 2019 from OECD Directorate for Financial and Enterprise Affairs

The growing interest in the environmental impacts of mineral extraction through ASM is welcome and likely to be a long-term trend in the context of greater awareness of climate change risks. Producers and consumers of products and technologies that aim to reduce global carbon emissions will want to make sure that materials they source are not causing harm to miners, communities, and the environment.

The community will need to consider innovative ways to engage with and provide assurances to these financial providers going forwards.

Mongolia remains a beacon of good practice in ASM formalisation. You can read about our work in Mongolia here. For ASM formalisation to be successful, sustained commitment to projects, such as SDC’s Sustainable Artisanal Mining project, and an enabling policy environment are essential ingredients.

The International Peace Information Service (IPIS) and Ulula published an impact assessment report of due diligence programmes on mining communities in the eastern provinces of the Democratic Republic of Congo (DRC). Their research set a baseline for future assessments.

Data upstream remains of central importance. The DELVE platform, which aims at gathering ASM data worldwide to address the current gaps, was presented. The platform will help inform decision making, policies, and interventions.

The World Bank launched the first annual report on the State of ASM: 2019 State of the Artisanal and Small-Scale Mining Sector. The report will be published yearly and collect key data to analyse and share the status of the sector. ASM is being given a place at the table.

Many barriers remain to sourcing gold from artisanal miners. Representatives from refiners highlighted the higher costs of both ASM due diligence and transporting smaller volumes of gold. Artisanal miners’ lack of access to formal financial services and limited cash flow also present challenges to establishing direct trading relationships with refiners. Governments have a role to play in the broader formalisation efforts.

CRAFT is growing in importance as a tool to assist miners to better formalise operations and in turn deliver on industry expectations.

A number of civil society-backed initiatives are already underway to assist miners to move through carefully designed modules. For the initiative to achieve the intended scalability, it will need to engage with and demonstrate value to private sector actors, who are key players in supporting the progressive and continuous improvement of upstream actors. In this regard there was no shortage of interest.

Further, it is essential that the link be made between downstream risk mitigation and upstream impact so that the two mutually reinforce one another.

Takeaways on Due Diligence:

The OECD reasserted that due diligence is about how business is done, not where. Every business engaged in the mineral sector has a responsibility to identify and address the risks along their supply chains.

Due diligence costs are often pushed upstream, which results in unfair distribution considering the poverty and challenging environments in which most upstream actors (particularly ASM) are based. Downstream actors must have accessible data along the value chain. There is a risk that data collection becomes a burden which does not provide added value to miners and their communities. Increased competition amongst due diligence and traceability providers is a development that should be welcomed.

Due diligence must be designed, implemented, and evaluated through a gender lens. Men and women are affected and interact differently with due diligence initiatives. Companies sourcing minerals were encouraged to actively promote gender equality, going beyond the mindset of ‘doing no harm’. Consulting with local women’s organisations should always be the starting point.

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