OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Third Edition

122 Pages·2016·1.6 MB·English

by  Oecd Organisation For Economic Co-Operation And Development

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20 2016 02 1 P

OECD Due Diligence
Guidance for Responsible
Supply Chains of Minerals
from Conflict-Affected
and High-Risk Areas
This document and any map included herein are without prejudice to the status of
or sovereignty over any territory, to the delimitation of international frontiers and
boundaries and to the name of any territory, city or area.
Please cite this publication as:
OECD (2016), OECD Due Diligence Guidance for Responsible Supply Chains of Minerals
from Conflict-Affected and High-Risk Areas: Third Edition, OECD Publishing, Paris.
http://dx.doi.org/10.1787/9789264252479-en
ISBN 978-92-64-25238-7 (print)
ISBN 978-92-64-25247-9 (PDF)
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FOREWORD
Foreword
T
he OECD Due Diligence Guidance for Responsible Supply Chains of Minerals
from Conflict-Affected and High-Risk Areas (“the Guidance”) is the first example
of a collaborative government-backed multi-stakeholder initiative on responsible
supply chain management of minerals from conflict-affected areas. Its objective is to
help companies respect human rights and avoid contributing to conflict through their
mineral sourcing practices. The Guidance is also intended to cultivate transparent
mineral supply chains and sustainable corporate engagement in the mineral sector
with a view to enabling countries to benefit from their mineral resources and
preventing the extraction and trade of minerals from becoming a source of conflict,
human rights abuses, and insecurity. With its Supplements on Tin, Tantalum,
Tungsten and Gold, the OECD Guidance provides companies with a complete package
to source minerals responsibly in order for trade in those minerals to support peace and
development and not conflict.
The Guidance was developed through a multi-stakeholder process with in-depth
engagement from OECD and eleven countries of the International Conference on the
Great Lakes Region (Angola, Burundi, Central African Republic, Republic of Congo,
Democratic Republic of Congo, Kenya, Rwanda, Sudan, Tanzania, Uganda and
Zambia), industry, civil society, as well as the United Nations Group of Experts on the
DRC. Five multi-stakeholder consultations were held to develop the Guidance and its
two Supplements, with four in Paris in December 2009 and April 2010 as well as May
and November 2011. A joint ICGLR-OECD consultation was held in Nairobi in
September 2010 where Brazil, Malaysia and South Africa were also represented. As a
result, the Guidance is practically-oriented, with emphasis on collaborative constructive
approaches to complex challenges.
The United Nations Security Council resolution1952 (2010) [S/RES/1952(2010)]
supported taking forward the due diligence recommendations contained in the final
report of the United Nations Group of Experts on the Democratic Republic of the Congo,
designed to be consistent with the OECD Due Diligence Guidance.
The Guidance has been approved by the OECD Investment Committee and the
OECD Development Assistance Committee, and has been endorsed by the eleven
member states of the International Conference on the Great Lakes Region (ICGLR) in
the Lusaka Declaration, adopted on 15December2010.
OECD DUE DILIGENCE GUIDANCE FOR RESPONSIBLE SUPPLY CHAINS OF MINERALS FROM CONFLICT-AFFECTED… © OECD 2016 3
FOREWORD
An OECD Recommendation on the Due Diligence Guidance was adopted by
Council at Ministerial level on 25May2011, amended on 17 July 2012 to include a
reference to the Supplement on Gold and again amended on 25 September 2015
following approval by the Investment Committee and the Development Assistance
Committee of changes to the Introduction to the Guidance. While not legally binding,
the Recommendation reflects the common position and political commitment of OECD
members and non-member adherents.
This third edition of the OECD Due Diligence Guidance for Responsible Supply
Chains of Minerals from Conflict-Affected and High-Risk Areas provides
clarification on the scope of the Guidance by removing language in the Introduction that
was perceived to limit its application only to the supply chains of tin, tantalum, tungsten
and gold. The updated edition now clarifies that the Guidance provides a framework for
detailed due diligence as a basis for responsible supply chain management of all
minerals.
4 OECD DUE DILIGENCE GUIDANCE FOR RESPONSIBLE SUPPLY CHAINS OF MINERALS FROM CONFLICT-AFFECTED… © OECD 2016
TABLE OF CONTENTS
Table of Contents
Recommendation of the Council on Due Diligence Guidance
for Responsible Supply Chains of Minerals from Conflict-Affected
and High-Risk Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
OECD Due Diligence Guidance for Responsible Supply Chains
of Minerals from Conflict-Affected and High-Risk Areas. . . . . . . . . . . . . . 11
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
What is due diligence in the mineral supply chain
and why is it necessary?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Who should carry out due diligence? . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Structure of the Guidance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Nature of the Guidance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Annex I. Five-Step Framework for Risk-Based Due Diligence
in the Mineral Supply Chain. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Annex II. Model Supply Chain Policy for a Responsible Global
Supply Chain of Minerals from Conflict-Affected
and High-Risk Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Annex III. Suggested Measures for Risk Mitigation and
Indicators for Measuring Improvement . . . . . . . . . . . . . . . . 25
Supplement on Tin, Tantalum and Tungsten . . . . . . . . . . . . . . . . . . . . . . . 31
Scope and definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Red flags triggering the application of this supplement . . . . . . . . . . . 33
STEP 1: Establish strong company management systems. . . . . . . . . . 36
STEP 2: Identify and assess risks in the supply chain. . . . . . . . . . . . . . 41
STEP 3: Design and implement a strategy to respond
to identified risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
STEP 4: Carry out independent third-party audit
of smelter/refiner’s due diligence practices. . . . . . . . . . . . . . . . . . . . . . 47
STEP 5: Report annually on supply chain due diligence. . . . . . . . . . . . 52
Appendix. Guiding Note for Upstream Company Risk Assessment . . . 54
Supplement on Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Introduction and scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
OECD DUE DILIGENCE GUIDANCE FOR RESPONSIBLE SUPPLY CHAINS OF MINERALS FROM CONFLICT-AFFECTED… © OECD 2016 5
TABLE OF CONTENTS
STEP 1: Establish strong company management systems. . . . . . . . . . 72
STEP 2: Identify and assess risks in the supply chain. . . . . . . . . . . . . . 78
STEP 3: Design and implement a strategy to respond to identified risks 99
STEP 4: Carry out independent third-party audit of refiner’s due
diligence practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
STEP 5: Report annually on supply chain due diligence. . . . . . . . . . . . 111
Appendix Suggested measures to create economic anddevelopment
opportunities for artisanal and small-scale miners . . . . . . 114
Figure
1. Risks in the supply chain of tin, tantalum and tungsten
from conflict-affected and high-risk areas . . . . . . . . . . . . . . . . . . . 35
2. Risks in the supply chain of gold from conflict-affected and
high-risk areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6 OECD DUE DILIGENCE GUIDANCE FOR RESPONSIBLE SUPPLY CHAINS OF MINERALS FROM CONFLICT-AFFECTED… © OECD 2016
RECOMMENDATION OF THE COUNCIL ON DUE DILIGENCE GUIDANCE FOR RESPONSIBLE SUPPLY…
Recommendation of the Council on Due Diligence
Guidance for Responsible Supply…
Recommendation of the Council on Due
Diligence Guidance for Responsible Supply
Chains of Minerals from Conflict-Affected and
1
High-Risk Areas
As amended on 17July2012
THE COUNCIL,
Having regard to Article 5(b) of the Convention on the Organisation for
Economic Co-operation and Development of 14December1960;
Having regard to the Guidelines for Multinational Enterprises which form
part of the Declaration on International Investment and Multinational
Enterprises;
Recalling that the common aim of governments recommending the
observance of the Guidelines for Multinational Enterprises and the
development community is to promote principles and standards for
responsible business conduct;
Observing that responsible sourcing of minerals has developmental and
business dimensions;
Having regard to the Policy Framework for Investment adopted in2006
which aims to mobilise private investment in a way which supports steady
economic growth and sustainable development;
Recalling the work of the Development Assistance Committee in the field
of international engagement in fragile states, aimed at avoiding harm when
engaging in fragile and conflict-affected environments, including the
1. At the time of adoption, Brazil made the following statement: “In adhering to the
present Recommendation Brazil understands that the Due Diligence Guidance has
been developed on the basis of the experience in the Great Lakes Region in Africa.
Brazil is of the view that companies should take due account of relevant decisions
by the United Nations, including resolutions of the UN Security Council, in
determining if other zones of operation can be considered to be conflict-affected or
high-risk areas.”
OECD DUE DILIGENCE GUIDANCE FOR RESPONSIBLE SUPPLY CHAINS OF MINERALS FROM CONFLICT-AFFECTED… © OECD 2016 7
RECOMMENDATION OF THE COUNCIL ON DUE DILIGENCE GUIDANCE FOR RESPONSIBLE SUPPLY…
Principles for Good International Engagement in Fragile States and Situations
endorsed at its High Level Meeting on 3-4April2007;
Recalling the efforts of the international community to cooperate in the
fight against corruption, including through the OECD Convention on
Combating Bribery of Foreign Public Officials in International Business
Transactions and the United Nations Convention Against Corruption;
Recognising that governments, international organisations and
companies can each draw on their respective competences and roles to
contribute to ensuring that trade and investment in natural resources is
beneficial to society at large;
Considering the efforts of the international community, in particular the
International Conference on the Great Lakes Region, to combat illegal
exploitation of natural resources in conflict-affected and high-risk areas;
Recognising that there is significant exploitation of natural mineral
resources in conflict-affected and high-risk areas and that companies
sourcing from or directly operating in those areas may face higher risk of
contributing to conflict;
Noting that due diligence for responsible supply chains of minerals from
conflict-affected and high-risk areas is an on-going, proactive and reactive
process through which companies can ensure that they respect human rights
and do not contribute to conflict;
Having regard to the OECD Due Diligence Guidance for Responsible
Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
(hereafter “the Guidance”), developed in cooperation with the International
Conference on the Great Lakes Region and approved by the Investment
Committee and the Development Assistance Committee;
Having regard to the Supplement on Tin, Tantalum and Tungsten and the
Supplement on Gold, which are an integral part of the Guidance, and noting
that supplements on other minerals may be added to the Guidance in the
future;
Noting that this Guidance sets out the steps companies should take to
identify and address actual or potential risks in order to prevent or mitigate
adverse impacts associated with their activities or relationships, while
recognising that flexibility is needed in its application depending on
individual circumstances and factors such as the size of the enterprise, the
location of the activities, the situation in a particular country, the sector and
nature of the products or services involved;
Recognising that the serious abuses associated with the extraction,
transport or trade in minerals listed in Annex II to this Recommendation,
8 OECD DUE DILIGENCE GUIDANCE FOR RESPONSIBLE SUPPLY CHAINS OF MINERALS FROM CONFLICT-AFFECTED… © OECD 2016