Vittoria Franchini - OECD Due Diligence Guidance for the Responsible Sourcing of Minerals...
Updated: May 31, 2020
OECD Due Diligence Guidance for the Responsible Sourcing of Minerals: Implications for large-scale mining companies
The OECD’s Due Diligence Guidance has been the cornerstone standard for responsible sourcing efforts in the metals and minerals sector since its publication in 2011. However, many industry stakeholders have long assumed that the Guidance was only applicable to supply chains of tin, tantalum, tungsten and gold, or that it was mainly relevant to supply chains from central Africa where there was an active presence of artisanal and small-scale (ASM) mining. Such assumptions are misplaced.
The responsible sourcing requirements recently introduced by the London Metal Exchange (LME) mean that producers of industrial metals such as aluminium, copper, cobalt, lead, nickel and zinc need to understand what the implications of the standards set out in the OECD Guidance are for their operations and be prepared to demonstrate that they operate in accordance with these standards.
This is likely to have implications even for those producers that do not trade on the LME. Based on experience from other markets, we expect that growing awareness will lead to both downstream customers and trade financiers increasingly seeing the LME’s requirements as a ‘hygiene factor’; a minimum compliance standard for mitigating potential exposure to responsible sourcing risks. Due diligence that is aligned with the OECD Guidance is already a performance expectation within the ICMM’s Mining Principles, which the 27 large-scale mining companies that are ICMM members are committed to uphold. Growing numbers of mining industry initiatives or certification schemes are seeking to align their requirements with the OECD’s recommendations or have stated their intention to do so. These cover metals including aluminium, cobalt, copper, lead, nickel, and zinc.
So, what does this mean in practice? What are the implications for large-scale mining producers and for companies that purchase minerals and metals from large-scale miners?
This presentation will provide an overview of the key risks that require companies sourcing from large-scale producers to conduct enhanced due diligence on their supply chains, and how large scale mining companies can prepare to comply with industry requirements, including the EU ‘conflict minerals’ legislation and the new LME responsible sourcing requirements.
Vittoria is a Manager at Kumi, a specialist sustainability consultancy focused on the responsible sourcing of raw materials in the minerals, agriculture and fashion supply chains. Vittoria’s work in the minerals sector involves advising businesses on the design, assessment and implementation of responsible sourcing strategies. Vittoria also works with policymakers and international institutions, such as the OECD and the EU, to advance responsible business practices in the private sector.
Prior to joining Kumi, Vittoria worked for the International Finance Corporation, where she carried out appraisals and audits of the environmental and social compliance of investments consistent with IFC’s Sustainability Policy and Performance Standards. Her experience includes conducting reviews and on-the-ground investigations of IFC’s environmental and social performance in Latin America and Africa, particularly in the mining, agribusiness, infrastructure and renewable energy sectors.
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