Report to OECD Council Due Diligence for responsible mineral supply chains: an analysis of five years implementing the OECD Guidance

Hannah Koep-Andrieu and Louis Maréchal

Significant uptake by all stakeholders supports global implementation

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Global implementation

Impact and challenges: International business

• Improved transparency and integrity of mineral supply chains

• But long way to go for companies to fully implement the

Guidance, in particular insufficient company reporting

• Specific challenges for SMEs remain

• Integrity and alignment of industry programmes globally

• Need for cost optimisation of due diligence efforts across the supply chain

Business case for doing due diligence

• upfront costs but better understanding of sources of raw materials and suppliers

• improved internal controls, record keeping, reporting

• better opportunities to access finance and inform better decision making

OECD Secretariat Alignment Assessment of Industry Programmes

Indications that due diligence is working towards breaking the link between mineral extraction, trade and conflict in the Great Lakes region

• Militarization of mining sites and trading networks in the Great Lakes region remains a challenge, particularly for gold

• In 2012 UN Group of Experts on the DRC: “Security situation at 3T mine sites has improved and trade in 3T has become a much less important source of financing for armed groups.”

• Need for additional scalable on-the-ground gold supply chain programmes

But it remains difficult to demonstrate the actual results on economic development and overall improvements of livelihoods

OECD projects on Measuring Results and on the Worst Forms of Child Labour

Impacts and challenges: Affected populations

Increased focus on mining sector governance

Improved data on production and trade

Improved capacity to raise taxes and levies

Implementation challenges remain in the Great Lakes region

Increased visibility of ASM with international buyers, donors and governments

Guidance first instrument with roadmap for economic and development opportunities for artisanal miners and formalization

Market-oriented perspective: secure buy-in of international trading, processing and consuming companies to buy responsible ASM minerals (e.g. “Just Gold” and “CBRMT” projects)

OECD FAQ on sourcing gold from ASM miners

Impacts and challenges: Governance and ASM

Looking ahead

The 3rd Edition clarifies that the Guidance provides a framework for detailed due diligence as a basis for responsible supply chain management of all minerals.

No other amendments necessary at this stage – Focus on implementation globally!

OECD Committees encourage continued efforts to implement the Guidance and invited Adherents to report on their activities to the Secretariat on an annual basis

OECD Mineral Risk Handbook project

THANK YOU

For further information on the OECD’s work on Responsible Business Conduct http://mneguidelines.oecd.org/ http://www.oecd.org/corporate/mne/mining.htm