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The Responsible Minerals Initiative (RMI) has published a practical guidance document on minerals due diligence implementation.

This guidance supports downstream companies who have to meet US SEC (Securities and Exchange Commission) or EU Minerals regulations. The guidance is also for companies who want to implement “recognized progressive practices” in their responsible sourcing programmes.

The document directly correlates to the OECD 5-step due diligence framework  and provides examples of how companies can use the OECD guidance to meet EU and SEC requirements. However, it must be noted that the document is not a direct method for compliance. Instead, it provides practical tips and explanations for companies with 3TG in their supply chain.

Please see below for a summary of the document. The full version can be accessed here.

SEC, EU and OECD Frameworks

The OECD framework applies to all companies in the mineral supply chain (mines, smelters, retailers etc) and provides recommendations to help companies avoid contributing to conflict.

The SEC Final Rule requires companies to use a nationally or internationally recognized standard to meet compliance and reporting obligations. As the only internationally available due diligence framework, the OECD guidance meets this requirement. More directly, the EU Minerals regulation requires that importers must conform to the OECD Guidance.

5-step process: A summary

The following 5-step process provides a framework for how companies could structure their supply chain transparency processes and includes elements from the OECD guidance.

Step 1: Establish strong company management systems

This step explains how companies can establish frameworks to implement their conflict minerals programmes, including elements outlined in the OECD guidance.

• Companies should adopt and commit to a supply chain policy, setting expectations to which companies should hold themselves accountable. This should be made publicly available, and companies should consider the OECD Guidance model policy
• Internal teams should be formed from across the business to support supply chain due diligence
• Companies should establish systems of controls and transparency over the mineral supply chain. This will allow for the collection of information to support the company’s framework and to meet legal reporting requirements.
• Companies should strengthen their engagement with relevant suppliers, to ensure that suppliers commit to policies consistent with OECD guidance
• Companies should also establish grievance mechanisms to allow affected persons or whistle-blowers to voice concerns.

Step 2: Explore risks in the supply chain

This step uses Step 2 of the OECD framework and defines practices to execute a Reasonable Country of Origin Inquiry (RCOI), as outlined in the SEC Final Rule. To identify and assess risks in the supply chain, the OECD guidance provides recommendations for companies to:

• Identify with Smelters or Refiners (SORs) as far as is reasonably possible and engage with them to obtain relevant information. Companies should also assess whether SORs have conducted all elements of due diligence for supply chains of minerals from Conflict-Affected and High-Risk Areas (CAHRAs).  
• Identify, review and request information from relevant first-tier suppliers, to understand what steps suppliers are taking in conducting activities regarding 3TG (Tungsten, Tin, Tantalum and Gold) and which SOR facilities are present in the supplier’s own supply chain.
• Annex 2 provides several examples of risk assessments submitted by companies, including the key elements to consider.

Step 3: Design and implement a strategy to respond to identified risks

This step describes approaches for downstream companies to respond to identified risks and prevent or mitigate adverse impacts, as suggested by the OECD guidance step 3.

• After establishing a strong management system and assessing supply chain risks in steps 1 and 2, companies should design and implement a response strategy – including appropriate mitigation measures, devising and implementing a risk management plan and undertaking additional risk assessments after a change of circumstances.
• Downstream companies are responsible for identifying SORs in their supply chains and assessing if they have implemented the correct due diligence. However, companies can co-operate their response to risks through the use of industry initiatives
• The OECD guidance defines red-flag triggers that obligate companies to conduct due diligence consistent with OECD guidance – an example of a trigger could be identifying minerals originating via CAHRAs

Step 4: Carry out independent third-party audit of smelter’s due diligence practices

This step provides an interpretation for the downstream company responsibilities outlined in OECD Step 4.

• Audits should be conducted to determine whether SORs are conforming to OECD Guidance. The RMAP , LBMA Responsible Gold Guidance  and the RJC chain-of-custody programs are designed to achieve the outcomes.
• Companies can also work together to accomplish due diligence outcomes e.g., through industry associations or 3rd parties.

Step 5: Report annually on supply chain due diligence

This section outlines the approaches companies can take to meet their reporting obligations under the SEC final rule, and correlates to Step 5 of the OECD guidance.

• The guidance recommends that companies report annually for minerals from CAHRAs generally – i.e. not limited to the DRC and adjoining countries, or 3TG.
• Reports by downstream companies should specifically include information on each company’s management systems, risk assessments and risk management.