Responsible Sourcing and Supply Chain
It’s when an organization ensures its business practices – both in its business and across its supply chains- do not have any or to have a positive impact on people and the environment.
The idea of “responsible supply chains” incorporates ethical governance, respect for human & labour rights, & environmental considerations into the lifespan of goods & services. Long-term environmental, social, & economic value can be created, protected, & grown for stakeholders along a company’s value chain with the aid of a responsible supply chain.
Customers, investors, & regulators are placing greater demands on companies that produce or source metals & minerals to perform due diligence on their supply chains.
The OECD has developed a five-step approach for doing due diligence in the supply chains for minerals. It serves as the foundation for numerous industry initiatives for responsible sourcing, including the Responsible Minerals Initiative, the LBMA’s Responsible Gold Guidance, & many others. This framework defines compliance requirements, such as the EU Conflict Minerals Regulation & the London Metal Exchange (LME) responsible sourcing requirements.
AKW specializes in assisting businesses to create ethical supply chains for metals and minerals. Our team has conducted several Supply Chain process reviews in line with the OECD Guidelines for Gold & Precious Metals sector companies performing thorough due diligence & continuous monitoring of the client’s suppliers & supplier’s suppliers. The scope of reviews includes aspects such as health & safety, labour, ethics, & environmental compliance.
A Brief of AKW’s Gold Supply Chain Audit Process
- Ascertain the type of risks – Geographical risks associated with the origin of gold/precious metals and/or Transactional risk etc
- Identify and assess risks in the supply chain on the circumstances of extraction, consolidation, transport, trading, and export of gold from conflict-affected and high-risk areas that may be contributing to conflict or serious human rights violations
- Conduct a risk assessment on every counterpart included in the supply chain from the mines (mined gold and precious metals) to the intermediary companies including suppliers, exporters, and transporters (mined/recycled gold and precious metals), using a risk-based approach
- Conduct in-depth research, and review exercises to respond to red flags in the above-listed risk areas
- Design and implement a strategy to respond to the risks identified in order to prevent/mitigate the adverse impacts and generate annual reports by hosting them publicly on the company’s website to generate public confidence
- Our reports make specific references to Annex II of the OECD Due Diligence Guidance and highlight the need to assess risks with respect to :
a). Systematic or widespread human rights abuses associated with the extraction, transport, or trade of gold
b). Direct or indirect support to non-state armed groups or public or private security forces
c). Fraudulent misrepresentation of the origin of gold & Bribery
d). Money Laundering and Terror Financing
e). Contribution to conflicts