OECD Guidance & Due Diligence

OECD Due Diligence Downstream Consultancy

OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas is guidance recommended to be used to perform due diligence by the Securities and Exchange Commission (SEC) in regards to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). It is at present the only suitable due diligence guidance and is not limited to derivatives of coltan, cassiterite, gold and wolframite and can be applied to other minerals which are linked to conflict.

Extensive and robust upstream Programmes, namely the most recognised being iTSCi (ITRI Supply Chain Initiative) exist. ITSCI provide a framework, information and on-the-ground resources for companies to conduct practical and effective due diligence. Member companies are audited by an independent third-party to verify if they conduct due diligence in accordance with to OECD Guidance.

Smelter programmes, CFSP (Conflict Free Smelter Programme) provide assessment at the smelter and refiner level to establish if mineral supply is linked to a recognised upstream Programme, in addition to a lesser degree, if the company has adhered to OECD Guidance.

Downstream from the smelter, supply chains can be incredibly complicated and opaque due to lack of information. If the supply of minerals is not linked to a smelter programme and iTSCi a clear determination of the country of origin and conditions of extraction, in-region supply chain, correct and legal export is required in order to determine the risk associated with the mineral supply.

“Conflict-affected” can be interpreted differently, within US legislation “conflict minerals” means ‘covered countries’ being DRC and adjoining countries and applies to coltan, cassiterite, gold and wolframite and their derivatives. For proposed EU legislation the same derivatives apply which is relatively arbitrary considering cobalt, silver and precious stones originate from many conflict-affected and high-risk areas but is not governed by similar legislation. Either way, depending on your companies intentions, considerations or current initiatives regarding responsible sourcing, EnviroSense can assist you. We can work with your company to develop:

• Awareness and training
• Internal processes for managing responsible sourcing
• Information gathering and Reasonable Country of Origin Inquiry design (RCOI)
• Evaluation of returned information and risk assessment methodologies or conducting the risk assessments
• Risk mitigation
• Review
• Reporting of Due Diligence

OECD Guidance is not limited to the 3Ts and gold as mentioned. The principles of OECD Guidance follow the same principles of due diligence irrespective of the resource:

• Gather information; which includes transparency and traceability from origin via a secure chain of custody system or evidence to substantiate that
• Identify and assess risk; specific risk assessment criteria applicable to the resource and the social, economic and environmental risk associated with it
• Risk management and mitigation; processes and actions to reduce risks to an acceptable level
• Publicly reporting risk; transparency and demonstrating improvements made and and disclosing your companies planned improvements over time

A variety of options exist whether this is mentoring or outsourcing the majority of resources for due diligence, we can assist your company impart a practical and realistic due diligence system and report on that.

Why EnviroSense?
EnviroSense has provided support to organisations in the industry and had involvement in many forums involving mineral programmes. We have delivered several well-attended workshops and worked downstream companies to develop a practical due diligence systems for their own means and supplier assurances.