The OECD five steps for minerals and gold, in plain language

The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas is the reference framework behind the EU Conflict Minerals Regulation, the LBMA Responsible Gold Guidance and most refiner sourcing programmes. If you mine, trade or export tin, tantalum, tungsten or gold, your buyers will measure you against it.

The five steps

1. Establish strong company management systems. Adopt a supply chain policy, assign responsibility to senior staff, set up a system of controls and transparency over the supply chain, and give people a way to raise concerns.
2. Identify and assess risks in the supply chain. Map where minerals come from and how they travel, then assess the risk of contributing to conflict, serious human rights abuses or bribery along the way.
3. Design and implement a strategy to respond to identified risks. Report findings to senior management, then decide whether to continue trading while mitigating, temporarily suspend trading, or disengage from the supplier.
4. Carry out an independent third-party audit. Refiners and smelters, the narrow point in the chain, have their due diligence practices audited by an independent party.
5. Report annually on supply chain due diligence. Publish what you did, what risks you found and how you responded.

What this means at the mine site

Steps four and five happen at the refiner, but the evidence for steps one to three starts upstream. A refiner can only show that its gold or tin is responsibly sourced if each mine site and trader can show:

• Where the material was produced, with mine site identification and location.
• Who handled it, including each trader, transporter and exporter along the route.
• The quantities at each handoff, reconciled from the mine site to export.
• The taxes, fees and royalties paid, in line with the guidance's transparency expectations.
• Any red flags found, and what was done about them.

Gold and the LBMA

Refiners on the LBMA Good Delivery List must follow the LBMA Responsible Gold Guidance, which builds on the OECD framework and requires annual independent audits. For artisanal and small-scale gold, refiners often need extra assurance before they will buy at all. A clean, verifiable custody record from the mine site makes that decision much easier.