Advancing responsible sourcing
in mineral value chains
Existing approaches to Responsible Sourcing in mineral value chains include regulations, standards, guidance & initiatives and reporting templates. These are listed in alphabetical order here. Relevant approaches are listed, but does not claim to be complete.
For more information on Sector Roadmaps and Flagship Cases, please see The State-of-play: The International Responsible Sourcing Agenda.
Based on ten principles, the code applies to various areas of the tin supply chain, with some being relevant to mine operators and others to smelters or secondary recycling companies and vice-versa. Each standard can be considered against a range of indicators designed to guide self-reporting by companies
The Assessment Criteria for Tin Smelting Companies allows for tin smelters to improve due diligence across the tin supply chain and encourages transparency to help to streamline information requests through the supply chain.
The Mining Local Procurement Reporting Mechanism (LPRM) is a set of disclosures on local procurement that are to be reported by organisations who report on mine sites. The LPRM addresses the gaps in current reporting frameworks and sustainability systems, and to help standardise the way the sector and host countries talk about these issues.
RBA has developed the Validated Assessment Program (VAP), which is a standard for onsite compliance verification and effective, shareable audits. The RBA itself does not conduct the audits but rather sets the standards and relies on approved audit firms. Since 2009, RBA members have completed more than 4,000 VAP onsite compliance audits conducted by independent third-party audit firms that have been approved by the RBA to execute the VAP protocol.
“In 2016 the RMI launched its Downstream Assessment Program to meet the growing demand for validation of sourcing practices of companies in the mineral and metal industries that are not eligible for the Responsible Minerals Assurance Process (RMAP) because they do not meet the definition of a smelter or refiner. The Downstream Assessment Program is minerals-agnostic and therefore inclusive of any metal/mineral within a company’s operations.”
The Cobalt Industry Responsible Assessment Framework (CIRAF) is a management tool designed for all companies, whether or not they are producing and/or sourcing from high-risk countries.
The Responsible Gold Mining Principles sets out a framework of principles addressing key environmental, social and governance issues specific to the gold sector. Companies are required to obtain third party assurance to indicate compliance with the principles.
The World Bank has set up the Climate-Smart Mining Initiative to address issues such as high energy consumption as well as social and environmental impacts coming from the mining sector. The Initiative focuses on four areas: 1) climate mitigation, 2) climate adaptation, 3) reducing material impacts, and 4) creating marketing opportunities. Part of the Climate-Smart Mining Initiative is also Forest-smart Mining, which aims to prevent ‘deforestation and supporting sustainable land-use practices; repurposing mine sites’ and includes ASM.
Signatories to the UN Principles for Responsible Investment (PRI) must incorporate environmental and social considerations within their investment and ownership decisions. The PRI has 6 sustainability principles and offers advice and reporting guidance based on the type of investment tools that signatories use.
As the United Nations defines its 17 goals, ‘the Sustainable Development Goals are the blueprint to achieve a better and more sustainable future for all.’ These 17 goals, which all UN member states agreed to achieve by year 2030, address a variety of issues, among them human rights, responsible consumption and production practices, poverty and global warming.
Forming the basis of many other standards, the human rights principles laid out by the United Nations (UN) in the UN Guiding Principles on Business & Human Rights provide guidelines on ‘the duties of countries and enterprises in respecting and protecting human rights’.
TSM is a framework developed by the Mining Association of Canada (MAC) that is mandatory for all members in every country they operate. This system provides guidance for companies on how to manage their environmental and social responsibilities. Even though this is a standard developed with a focus on Canadian companies, it is gaining international recognition and has already been adopted by several other organisations, including the Finnish Mining Association (FinnMin), the Argentinean Chamber of Mining (Cámara Argentina de Empresarios Mineros), and the Botswana Chamber of Mines.
Developed by Responsible Steel, a not-for-profit organisation, the Responsible Steel Standard is an industry wide multi-stakeholder forum that has developed standards for its members to cover environmental, social, governance, management, system, stakeholder engagement, and closure principles.
The RMI offers companies different tools to improve their due diligence schemes for their supply chains and responsible sourcing of minerals. Among the RMI tools, the Conflict Minerals Reporting Template and the Cobalt Reporting Template provide downstream companies with free, standardised reporting forms to share information about supply chains.
These templates allow information about mineral origins or the refiners and smelters to be shared easily. This transparency also helps to identify smelters and refiners that have not yet been audited in the RMI Responsible Minerals Assurance Process.
The China Chamber of Commerce for Metals, Minerals and Chemical Importers launched the RCI in 2016 with support from the OECD. In 2017, the RCI had 24 members, including Apple, BMW, CATL, Dell, HP, Huawei, Sony, Samsung SDI, LG Chem, Hunan Shanshan, L & F, Tianjin B & M and Huayou Cobalt. The initiative aims at addressing environmental and social risks along the cobalt supply chain, with the elimination of child labour as one of its primary goals. It is currently developing an auditing scheme and considering local development projects in the Democratic Republic of the Congo.
The OECD maintains its Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector to include various stakeholders – e.g. local communities, ASM, and governments – in corporate planning and decision-making for oil, gas, or mineral extraction operations.
This Guidance document is the underlying standard for a significant number of mineral certification schemes and audits as well as of several corporate policies addressing mineral sourcing from Conflict-Affected and High-Risk Areas (CAHRS). It provides structured and specific risk identification actions for a business to undertake as part of its responsible sourcing (RS) practices and is considered by many to be the de facto standard for most RS due diligence templates. EU directives, including the one on EU Conflict Minerals and EU Non-Financial Reporting Directive, also refer to this document.
The OECD maintains the framework Guidelines for Multinational Enterprises. As part of its definition of ‘responsible business conduct’, the Guideline indicates the importance of identifying and managing risks in a company’s supply chain and operations, contributing to economic, social, and environmental development in a host country, and contributing overall to the UN’s Sustainable Development Goals.
The Natural Resource Charter is a guidance document published by the Natural Resource Governance Institute and built around 12 core precepts. This document is meant for governments as a decision support system for the development of a country’s natural resources to obtain the highest possible benefit for countries and their citizens.
The LME requires responsible sourcing for all of its listed brands. The LME is introducing responsible sourcing requirements for all metals (by brand) for delivery through the exchange. The first reporting period for firms is set for 2021 with audits (where required) to be carried out by the end of 2023. The LME Responsible Sourcing approach combines two principles – ethical responsibility and commercial interest – to employ a price discovery function that better reflects the value of responsibly sourced metal.
The IRMA offers voluntary certification for large-scale mines of all commodity types according to its Standard for Responsible Mining. This set of criteria certifies individual mines, not mining companies, based on requirements for: 1) business integrity, 2) planning for positive legacies, 3) social responsibility and 4) environmental responsibility. The certification audit verifies performance of all types of mining operations, including surface, underground or solution mining, by an independent third party.
Description
The ISO develops standards in diverse areas, including those addressing quality management, environmental management, health and safety or energy management. The most used standards covering these aspects include:
– ISO 14000 on environmental management standards & guidelines
– ISO 45001 (based on OHSAS 18001 from the International Labour Organisation) on occupational health & safety management systems
– ISO 50001 on corporate energy management
– ISO 26000 on social responsibility to organisations
– ISO 20400 on sustainable procurement, addressing responsible sourcing
– ISO 9001 on Quality Management Systems
Apart from general labour standards, the ILO has also developed standards specifically for the mining sector, which cover issues from child labour to social development. These standards are also detailed to address regional differences.
The ILO, an agency under the United Nations, broadly seeks to provide a system of international labour standards that support social justice. The standards, policies and programmes that it develops should promote safe and decent work. Labour standards are defined under legally binding ‘conventions’, eight of which are seen as fundamental, as well as certain associated ‘protocols’ and non-binding ‘recommendations’.
Focused on the countries Burundi, the Democratic Republic of the Congo, Rwanda and Uganda, the ITSCI monitors supply chains to ensure a common standard and audits upstream companies. Its members are required to conduct due diligence assessments and apply risk mitigation techniques, the outcomes of which are then made publicly available. The standard is in compliance with the OECD guidelines.
The 2012 edition of the IFC’s environmental and social standards, which define the responsibilities for managing the associated risks, are applicable to any project receiving funding from the IFC. An audit is required for those businesses that have received IFC funding.
The World Bank Group requires its clients to employ relevant measures that are defined under its Environmental, Health, and Safety Guidelines, or ‘EHS Guidelines’. This collection of technical reference documents developed by the International Finance Corporation (IFC) can be applied to all industry sectors in combination with the appropriate Industry Sector Guidelines, as defined by the IFC. The EHS Guidelines for Mining are applicable to all types of mining operations and mineral processing, except for the extraction of construction materials that are covered separately.
The ICMM Mining Principles provide guidance for achieving the UN Sustainable Development Goals (SDGs). These Principles provide guidance and a certification mechanism for mining corporations and associations. Achieving these Mining Principles can be certified by a third-party auditor every three years after completing a self-assessment questionnaire.
The GRI provides a voluntary standard for companies from various sectors along the entire supply chain to achieve sustainable reporting and increase transparency. The standard aims to help corporations comprehend and communicate their influence on sustainability issues, including governance, human rights, social well-being and climate change. This initiative holds as a tenet that maintaining an informed public through transparency can influence corporate decisions and promote positive change.
The Global Tailings Review was established by ICMM, the UNEP and PRI (Principles for Responsible Investment) in response to several tailing dam breaks over a short period of time. They created the Global Industry Standard on Tailings Management, a voluntary standard for safer tailings storage facilities, which is directed at the organization operating the tailings storage facility.
This project by the World Economic Forum is a global collaboration platform that aims to catalyse and accelerate action towards a socially responsible, environmentally sustainable and innovative battery value chain to power the Fourth Industrial Revolution. The Global Battery Alliance (GBA) has 10 Principles for a sustainable battery value chain, which as of 23 January 2020 had been adopted by 42 organisations.
One of the GBA’s flagships is the ‘Battery Passport’, which they state should ‘offer a digital representation of a battery, conveying information about all applicable environmental, social, governance and lifecycle requirements based on a comprehensive definition of a “sustainable” battery’. It is planned to be fully operational at the end of 2022.
The Fair Cobalt Alliance joins the key stakeholders Huayou Cobalt, Glencore, Tesla, The Impact Facility, The Responsible Cobalt Initiative (RCI) and Sono Motors in a pact to improve working conditions at artisanal and small-scale cobalt mining (ASM) sites in the Democratic Republic of the Congo. The group seeks to implement responsible mining practices by eliminating child labour and increasing household incomes.
In December 2020, the European Commission published a proposal for a new battery regulation in the EU. It is still awaiting ratification by the European Parliament and the Council. Covering several key policies of the battery value chain, once it comes into force, it will shape the future production and recycling landscape of lithium-ion batteries.
If passed, the Proposal would introduce mandatory due diligence for cobalt, natural graphite, lithium, nickel and other chemical compounds based on one or more of these raw materials. The due diligence processes would be based on the OECD Due Diligence Guidance and would include assessment of the impacts on social and environmental risk categories.
The Extractive Waste Directive 2006/21/EC on the management of waste from extractive industries, ‘promotes preventing or significantly reducing adverse environmental effects…’ The Extractive Waste Directive particularly addresses environmental risks from wastes that impact water, air, soil, plants, animals, and landscapes, as well as risks to human health. The Directive applies to how wastes are managed that were produced through prospecting, extraction including quarrying, treatment, and storage of mineral resources.
The EU has broad legislation addressing environmental health and safety issues, divided into EU Directives, guidelines, standards and additional national legislation. These standards are managed by EU-OSHA, the European Union information agency for occupational safety and health. EU-level directives guide national legislation of Member States.
Under the End-of-Life Vehicles Directive (2000/53/EC) of the European Union, which is currently under revision, vehicle manufacturers have extended responsibility for the vehicles they produced and for the vehicular components after use. This Directive thereby requires vehicle manufacturers to physically take back their products so that the items may be reused, recycled or remanufactured. Alternatively, manufacturers may delegate their responsibility to a third party.
The EU Directive 2014/95/EU requires companies with more than 500 employees to disclose information on environmental matters, social matters & treatment of employees, respect for human rights, anti-corruption & bribery and diversity on company boards.
This EU Directive requires EU importers of 3TG (tin, tungsten, tantalum and gold) to meet international responsible sourcing standards set by the OECD. The regulation is based on a due diligence approach to supply chains.
The purpose of this European Standard for Collection, Logistics, Pre-treatment, Downstream treatment of WEEE (EN 50625-1:2014) is to support institutions to:
This EU standard is focused on WEEE but also includes batteries generally.
The EBRD published a new mining strategy for 2018-2022 in conjunction with their other policies on environmental and social governance, the green economy transition, public information, etc. While mainly providing guidelines for EBRD involvement in mining projects, the strategy also offers guidance for governments on policy development and supports companies when introducing new technologies and good corporate practices.
The EICC Code of Conduct provides standards for the working conditions of employees in the supply chain for the electronics industry. Participants are also required to ask their first-tier supplier to implement the code. The code addresses labour, health & safety, environment, and business ethics.
Facilitated by CSR Europe, the automobile sector has set up the Drive Sustainability partnership to improve the sustainability of the automotive supply chain. The partnership has drawn up the Automotive Industry Guiding Principles to Enhance Sustainability Performance in the Supply Chain that is accompanied by The Global Automotive Sustainability Practical Guidance. These Principles and Guidance documents define and provide examples for efforts toward ensuring ‘fundamental principles of social and environmental responsibility’ in the areas ‘Business ethics’, ‘Environment’ and ‘Human rights and working conditions’.
The Copper Mark is a framework specifically for the copper industry to support responsible production practices. The goal is to provide independent certification for copper producers. To receive the Copper Mark, 32 criteria must be fulfilled. These criteria were developed by the Responsible Minerals Initiative and cover environmental, social, and governance areas. A company can also qualify for The Copper Mark by implementing equivalent sustainability systems and standards.
The China Responsible Mineral Supply Chain Due Diligence Management Guide was launched in 2015 by the China Chamber of Commerce for Metals, Minerals and Chemical Importers (CCCMC) in cooperation with the OECD. In following the guidelines, Chinese companies achieve international due diligence standards that can be mutually recognized around the world.
The Certified Trading Chains certification scheme was developed by the German agency Federal Institute for Geosciences and Natural Resources (BGR) in 2007 for Rwanda and, in an adapted form, for the Democratic Republic of the Congo. The scheme acknowledges the specific challenges pertaining to the artisanal and small-scale mining sector and is hence particularly concerned with feasibility and impact in an artisanal context. It emphasizes process rather than just demanding and certifying certain performance targets.
The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (‘Basel Convention’) is an international environmental agreement that has established environmentally sound waste management and regulates the control of transboundary hazardous waste shipments. Lithium-ion batteries at their end of life also fall under the Basel Convention, which makes it difficult to ship them around the world, as the process involves many necessary authorisations.
The ASI works towards building stakeholder consensus in the aluminium sector around responsible practices and performance standards. The organisation aims to create a collective impact on environmental and social issues. The ASI Standards program is applicable to all stages of the aluminium production and transformation stages. Members are certified when they have met these standards.
The ARM initiative seeks to promote ‘inclusive and sustainable development’ to legitimise the artisanal and small-scale mining (ASM) sector. ARM has set up voluntary standards and certification schemes and promotes the legitimacy of responsible ASM on commodities markets. ARM supports gender equality, diversification, and socially and environmentally responsible production through implementing good-practice techniques and certain technological advances.
