To respect human rights, countries are regularly adopting new and robust guidelines. These policies and guidelines help companies to avoid contributing to conflict through their mineral purchasing decisions and practices. They should be adhered to by the companies who are potentially sourcing minerals or metals from conflict-affected and high-risk areas (CAHRA).

However, for feasible conflict minerals due diligence, a company should opt for conflict minerals software for obvious reasons. They help in 100% automation of supplier CMRT’s/CRT’s and Conflict Minerals reporting. Moreover, they efficiently make key compliance checks such as cross-referencing between 3TG (Tin, Tantalum, Tungsten, and Gold) and Smelter Details in minutes. Along with this, you should be well-versed with what due diligence actually is and how it impacts small-scale mining in DRC. Therefore, without any further ado, let’s begin.

What is conflict minerals due diligence

Conflict minerals include 4 elements- tin, Tantalum, tungsten, and Gold are commonly referred to as 3TG. The fact that the income derived from these minerals are used in financing the armed forces of the Democratic Republic of Congo (DRC) and surrounding regions makes them classified as “Conflict minerals”.

The troops use the profits derived from these mines to perpetuate war by purchasing weapons. These troops are also responsible for some of the worst atrocities against mankind. Also, the civilians from local communities are even forced to work for these illegal mining's.

However, with the help of due diligence, companies are able to dodge from unknowingly contributing to them. Due diligence provides detailed recommendations and guidance to companies to save human rights and avoid providing revenue to conflicts through their mineral purchasing decisions and practices. This guidance is generally used by the companies who potentially source minerals or metals from conflict-affected and high-risk areas such as DRC.

A brief about Artisanal and Small-scale Mining (ASM) in DRC

DRC (Democratic Republic of Congo) has a big history of mining activities. However, few activities including Artisanal and Small-Scale Mining (ASM) are among the top concerning issues there.

The mining boom around January 2020 in DRC has made abandoned mines and ASM has a matter of concern for Congolese people. However, there's no clear picture of the actual impact of artisanal and small-scale mining on the environment and human health.

Instead, a lot of mini-review has raised awareness of the negative impacts of mining operations. This has promoted further collaboration between citizens, mining companies, and government institutions to reduce the negative impacts associated with conflict minerals.

Besides, it is noted from various surveys that more outcomes are needed to adequately characterize the impact of artisanal and small-scale mining activities on health and the environment. It will also result in the formalization of artisanal and small-scale mining sectors while strengthening the social and environmental conditions and will promote sustainable mining practice standards that will improve people’s lives in DRC.

Steps to Achieve Due Diligence

Working together, companies have developed a variety of policies and processes to better understand the risks associated with minerals. However, companies’ actions alone cannot ensure security, therefore, governance coordination also has a major role to play in bringing peace in the region. Let’s have a look at 5 steps to achieve due diligence:

1. Establishing strong management

Adopt and clearly communicate to suppliers and the public supply chain of minerals originating from conflict-affected and high-risk areas. Also, structure internal management to support supply chain due diligence and strengthen company engagement with suppliers.

2. Identify and access risks

A company should identify and access risk through the supply chains regarding the abuses associated with the extraction, transport, or trade of minerals. He should also verify whether the supplier is directly or indirectly supporting non-state armed groups. And most importantly, a clear verification should be done regarding the bribery and fraudulent misrepresentation of the origin of minerals.

3. Planning and Implementing a strategy

In order to give a strong response to the identified risks, it is important to carve out a strategy. Most of the companies opt for designated senior management. You can implement the risk management plan, monitor and track the performance of risk mitigation efforts, and report back to designated senior management.

4. Taking the aid of independent third-parties

This is a common and mandatory step to achieve successful due diligence. Companies can have their practices audited by independent third parties like APA Engineering who have years of experience for the same. They can efficiently and quickly identify the pain points in the supply chain and save your manual efforts and a lot of time.

5. Report annually

Companies should report annually on the supply chain due diligence to get better insights. They should publicly report on their supply chain policies and practices and can achieve this by expanding the scope of their sustainability, corporate social responsibility, or annual reports to cover additional information on mineral supply chain due diligence.

How Due Diligence Influence High-Risk Mining Operations

After the successful implementation of EU regulations from 1 January 2021, it is now mandatory for companies to undertake due diligence who are importing specific minerals and metals, potentially present in consumer products.

EU importers are now individually responsible to comply with the due diligence obligations which come with this Regulation. Due diligence empowers businesses to identify, prevent, and respond to any negative impact related to their operations and ensures the same throughout their supply chains.

Companies that use tin, tantalum, tungsten, and gold (3TG) are obliged to identify, assess, and manage associated risks in their supply chain. The regulation has adopted the OECD (Organisation for Economic Co-operation and Development) due diligence guidance to achieve responsible supply chains of minerals from conflict-affected and high-risk areas.

This regulation, containing due diligence will ensure an open and transparent international investment environment. That will also encourage enterprises to give a positive contribution to economic and social progress in the countries in which they operate.

However, there are certain things which have to be done from the companies’ end. They have to set up a strong company management system that identifies, assesses, and manages risks in the supply chain. It should audit all the company’s operations and processes and report publicly. This process including due diligence will have positive outcomes for human rights, the environment, employment, and industrial relations, etc.

COVID-19’s effects on ASM sites

Statistics show that about 40 million people worldwide are based on Artisanal and Small-Scale Mining (ASM) for livelihood. And unfortunately, novel coronavirus has affected this area as well. Since countries all over the world have laid the guidelines to prevent Covid-19, the work in ASM sites reduced a lot. The majority of people (90% as of 31st July) reported that their ASM activities had been significantly negatively impacted by the pandemic, resulting in a decrease in their income and work. This has a knock-on effect on the livelihoods of households and families. In the face of this, many ASM workers have also switched their professions and resorted to agriculture for survival.

Also, the global trade of conflict minerals, especially gold has reduced a lot. On a global scale, companies that buy gold from small-scale miners have suspended their operations, and increasing logistical disruptions make it even more difficult to transport gold. This reduces the demand for the mineral and probably leads to a widespread drop in the price offered at the local and national levels.

How APA Engineering can help

With a lot of management to work on and less time, it gets difficult for companies to keep up with the new regulations and guidelines, this also affects their productivity rate. But these issues can be sorted easily by outsourcing your regulatory requirements to a reliable agency, like APA Engineering. With 20+ years of industrial experience, the company never lags in meeting ever-changing global regulatory needs.

Over the years, APA engineering has aided thousands of businesses with managed solutions for regulatory compliance reporting. Serving users with hybrid solutions, including software Conflict Minerals Compliance Suite, a.k.a. CM-CS, and services for increased coverage, higher data accuracy, faster reporting, and reduced compliance expenses.

To learn more about the CM-CS software to help carry out the Conflict Minerals procedures conveniently, contact us today.

 
 
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