rcs brief on a practical approach to conflict minerals risk assessment and mitigation in conflict...
DESCRIPTION
A practical approach to conflict minerals 3TG risk assessment and mitigation in conflict affected and high risk areasTRANSCRIPT
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A practical approach to 3TG risk assessment and mitigation in conflict affected and high risk areas
Harrison [email protected]
May 2014
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REASONS FOR ACTING AND CHALLENGES
Multiple pressures compelled our client to act• Commercial – demands from the market• Regulatory - direct local (ICGLR) and indirect internationally
reaching laws (DF1502)• Reputational – risk of association with conflict/human rights
abuse/child labour• Responsibility /moral– no responsible company wants to make
money from conflict
Upfront challenges• Identifying an approach that was rigorous, based on good
practice and appropriate to their position in the supply chain (as a trader)
• Needed to be sensitive to commercial realities but also be able to legitimately respond to risks = assign significant responsibility to the producer/local trader but also provide support and maintain oversight
• How to identify what is a high risk area?
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APPROACH
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Opted for a combination of: • IDENTIFICATION: Using Heidelberg Conflict Barometer as an impartial way to
identify high risk areas worldwide + CSFI country lists. • Commercial pressures meant that effectively DRC + 9 countries had to be
considered high risk due to DF1502 and CFSI program requirements.
• REFINEMENT: Company policy consistent with the OECD DDG that targeted conflict/HR/child labour risks + communicating expectations to suppliers
• USING EXISTING COMPANY APPROACHES: Enhanced KYC process to check background of ALL new 3TG suppliers• ONLINE SEARCH FOR SANCTIONED INDIVIDUALS/COMPANIES incl. UN• ENHANCED QUESTIONNAIRE ABOUT OFFICERS AND SHAREHOLDERS• INFO ON SUBSIDIARIES AND PARTNERS
• CERTIFICATION: Only sourcing certified material from CFSI approved programs
• INDEPENDENT ASSESSMENTS: Supplemented with own risk based annual independent assessments on a % basis, ongoing monitoring and better communication with suppliers and certification scheme
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RESULTS AND REVIEW
Initial Results - RESPONSE• Independent assessments identified a number of risks that
are being addressed and tweaking approach• Program is providing assurance to the company executive
concerned about liability now able to use DD to their commercial advantage
Summary Thoughts • Can take some time to set up, but worth being rigorous at
the beginning of the process to get full support across multiple company departments. You need people to take on new responsibilities to make this work!
• Identification of high risk areas still requires targeting of risks within those areas. Conflict Barometers is broad – best way to identify local risks is by being on the ground using local sources = independent risk assessments, information from suppliers and certification scheme
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