Ulric Schwela, iTSCi presentation - 9th Multi-stakeholder Forum for Responsible Mineral Supply...
18
Reporting under Step 5 of the Due Diligence Guidance: What does it mean and what should it look like? A snapshot of iTSCi member reports Ulric Schwela, T.I.C. Representative to iTSCi Governance Committee [email protected], http://tanb.org 9 th Meeting of ICGLR-OECD-UN GoE Joint Forum on Responsible Mineral Supply Chains Paris, May 2015
-
Upload
oecd-directorate-for-financial-and-enterprise-affairs -
Category
Government & Nonprofit
-
view
82 -
download
0
Transcript of Ulric Schwela, iTSCi presentation - 9th Multi-stakeholder Forum for Responsible Mineral Supply...
Reporting under Step 5 of the Due Diligence Guidance: What does it mean and what should it look like? A snapshot of iTSCi member reports
Ulric Schwela, T.I.C. Representative to iTSCi Governance Committee
[email protected], http://tanb.org
9th Meeting of ICGLR-OECD-UN GoE Joint Forum on Responsible Mineral Supply Chains Paris, May 2015
5 Steps of OECD Company Due Diligence
STEP 1: Establish strong company management systems
STEP 2: Identify & assess risks in the supply chain
STEP 3: Design & implement a strategy to respond to identified risks
STEP 4: Carry Out Independent Third-party Audit of Smelter/Refiner’s Due Diligence Practices
STEP 5: Report Annually On Supply Chain Due Diligence
Company responsibility for due diligence, can be assisted by joint industry actions to simplify and reduce costs
OECD due diligence Step 5
The OECD due diligence guidelines 2nd ed. of 2013 state:
o “5. Report on supply chain due diligence. Companies should publicly report on their supply chain due diligence policies and practices and may do so by expanding the scope of their sustainability, corporate social responsibility or annual reports to cover additional information on mineral supply chain due diligence.”
The supplement on tin, tantalum and tungsten further states (pp 52-53):
o “OBJECTIVE: To publicly report on due diligence for responsible supply chains of minerals from conflict-affected and high-risk areas in order to generate public confidence in the measures companies are taking.”
o Specific Recommendations for:
• Upstream companies
• Smelters/refiners (known as “processors” in the tantalum industry)
• Downstream companies
iTSCi expectations for Step 5
iTSCi members should make their public reports each year and this is checked in the iTSCi site audits.
Since iTSCi publishes a great deal of information, in some cases more than expected by the guidance, members can refer to that generally in their public reports without having to repeat it.
Members should add some remarks about their own evaluation of the iTSCi information being relevant to their own circumstances, and report on individual company activities such as developing policies.
Step 5 reports are about methods of due diligence and some examples. Companies can not be expected to publish everything about their own risks since that creates a reporting disincentive and can lead to disengagement; not what was intended with the guidance.
Publication of information on risks would reveal supplier relationships which remain confidential under OECD guidance.
iTSCi members’ Step 5 reporting
iTSCi encourages members to produce Step 5 reports and provides support
Not a box ticking exercise, instead companies should consider: o Comments on conflict minerals policies, due diligence plans and
management responsibilities, including who is responsible.
o Whether they have added more resources/staff within their company to manage due diligence.
o A description of what sources of information are used to assess any risks of conflict connections, either own company investigations, information from iTSCi, or other.
o Comments about how they share data and information on their supply chain with their customers, whether by own actions or through iTSCi systems to help protect business commercial/confidential information.
o Whether they participate in EITI reporting.
o How they make on the ground assessments, and/or how they use information from iTSCi from the local areas.
iTSCi members’ Step 5 reporting
Points for companies to consider, cont.d…
o What kind of risks (e.g. untagged mineral, unknown suppliers, insecurity etc.) they may face and whether they stop buying for any reasons to manage the risks. How do they assess those risks.
o Whether they participate in stakeholder discussions locally (CLS/CPP) or internationally (OECD).
o How they monitor the performance of suppliers in terms of due diligence.
The balance between confidentiality and public access is difficult and has extensive legal implications
o Release of unverified information has legal risk
o Release of incident information increases company reputational risks
iTSCi members’ Step 5 reports
First Step 5 report published 20th May 2014; latest 28th April 2015
Currently 73 iTSCi member Step 5 reports published online https://www.itri.co.uk/index.php?option=com_mtree&task=listcats&cat_id=196&Itemid=11
o 59 reports from Upstream companies
• 21 miners/exporters
• 23 exporters (only)
• 15 international traders
o 13 reports from Smelters/Refiners/ Processors
o 1 report from a Downstream company (recycling)
Examples of leading practice: Miner/Exporter
HCK Mining Company:
o A clear and concise format
o Specifying minerals sourced
o Mine site visits
o Due diligence plan
o Training in due diligence
Examples of leading practice: Exporter
Willem Minerals Company (WMC):
o Clearly structured report
o Mastering the OECD guidance
o Multi-stakeholder meetings
o Sourcing committee
o Named persons for implementation
Examples of leading practice: Exporter
Willem Minerals Company (WMC):
o Sourcing policy
o Detailing locations sourced from and visited
o Sensitisation meetings
o Payment of taxes
o Declaration to EITI
Examples of leading practice: Trader
Examples of leading practice: Smelter
Multiple good examples: o Jiujiang Tanbre o Malaysia Smelting o Ningxia Orient Tantalum o Thailand Smelting o Ulba Metallurgical o Zhuzhou Cemented Carbide
Jiujiang Tanbre: o Conflict-free procurement policy o Conflict mineral reporting template to
downstream customers o Due diligence clause in contracts o Training management staff o Named person for implementation o Involving other departments o Level 1 requirements o Level 3 requirements
Malaysia Smelting:
o Conflict mineral policy
o Conflict mineral policy on-line
o Training staff
o In-region mine site visits
o Contracts require due diligence
o Supporting local development
Examples of leading practice: Smelter
Malaysia Smelting:
o In-region mine site visits
Examples of leading practice: Smelter
Ningxia Orient:
o Clearly structured report
o Training staff
Additional activities beyond OECD
o Social Responsibility Report
Examples of leading practice: Smelter
Zhuzhou Cemented Carbide:
o Identifying people responsible for due diligence
o Statement on Conflict Minerals
o Using CFSI Conflict Minerals Reporting Template for customers
Examples of leading practice: Smelter
Conclusions
Step 5 reporting reflects complexity of issues for companies to resolve
iTSCi helps by assisting with due diligence and traceability, not just “bag’n’tag”
o Practical application of OECD guidance
o On the ground, at local level
o Multi-stakeholder involvement, with joint responsibilities
iTSCi has been operating continuously for over four years
o It is lively and growing, it is running
o Requires continued nurturing and support to help meet OECD guidance
Thank you!
Ulric Schwela
Tantalum-Niobium International Study Center
tanb.org
iTSCi Programme
itsci.org
![[Ulric Neisser, Eugene Winograd] Remembering Recon(BookFi.org)](https://static.fdocuments.in/doc/165x107/55cf96c4550346d0338da80e/ulric-neisser-eugene-winograd-remembering-reconbookfiorg.jpg)
