An EU regulation comes into effect on 1 January 2021 requiring EU companies importing specific minerals and metals, potentially present in consumer products, to undertake due diligence. Companies using tin, tantalum, tungsten and gold (3TG) are obliged to identify, assess, and manage associated risks in their supply chain. The regulation adopts the OECD due diligence guidance for responsible supply chains of minerals from conflict-affected and high-risk areas.
The regulation is expected to help ensure an open and transparent international investment environment and encourage the positive contribution of enterprises to economic and social progress in the countries in which they operate.
Natural mineral resources can hold great potential for development, however, in conflict-affected or high-risk areas, can contribute to conflicts, which in turn, undermines development, good governance and the rule of law.
Human rights abuses are unfortunately all too common in resource-rich conflict-affected and high-risk areas. Such abuses can include child labour, sexual violence, the disappearance of people, forced resettlement and the destruction of ritually or culturally significant sites.
Businesses can play an important role in ending abuse and contribute to economic, environmental and social progress in developing countries.
As of 1 January 2021, EU importers are individually responsible to comply with the due diligence obligations set out in this Regulation. Due diligence helps companies identify, prevent and respond to any potential negative impact related to their operations as well as throughout their supply chains.
The EU has been actively engaged in an initiative of the Organisation for Economic Co-operation and Development (OECD) to advance the responsible sourcing of minerals from conflict areas, which has resulted in a government-backed multi-stakeholder process leading to the adoption of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (‘OECD Due Diligence Guidance’)
Companies will be required to set up a strong company management system, identify, assess and manage risks in the supply chain, audit the company’s operations and processes, and report publicly. The process is intended to prevent and address adverse outcomes related to human rights, the environment, employment and industrial relations, corruption and consumer protection.
The European Commission has set up a dedicated portal to support companies adhere to the new requirements called “Due diligence ready!” with tools, training, materials and information and is available in seven languages (English, French, German, Italian, Polish, Portuguese and Spanish).
The EU Regulation applies to EU importers of these minerals and metals originating from conflict-affected and high-risk areas, or CAHRAs, with annual import volumes exceeding certain thresholds. CAHRAs are characterised by “the presence of armed conflict, widespread violence or other risks of harm to people.”
European Partnership for Responsible Minerals (EPRM)
To accompany the regulation, the European Partnership for Responsible Minerals (EPRM) was established to enable mines to comply with the standards required so that companies can be confident that they are compliant with the regulation.
The EPRM is also supporting artisanal and small scale mines (ASM) by promoting more responsible production and to expand market access, both locally and internationally. There are many on-going projects across the world.
These are a some of the projects:
- In Uganda, a project is bringing government, mine operators, including artisanal and small-scale miners (ASMs), and civil society organisations together to promote responsible supply chain management, recognising the different roles and obligations of all stakeholders. The project is helping formalise ASMs, promote the participation of women in mining, increase mining revenues, promote human rights standards and ultimately contribute to the overall good governance of the mining sector in Uganda. See more here.
- In Rwanda, a blockchain-based project called SustainBlock is revolutionising supply chain accountability from ASM mine sites all the way to mineral and metal end-users. With this technology, companies downstream can access information on the provenance of minerals contained in their products. See more here.
- In Indonesia, the Tin Working Group, is contributing to the development of responsible tin mining in Indonesia through engagement and effective support to all stakeholders, including companies, industry associations, government and civil society. They have been working on issues such as Occupational Health and Safety, business planning and land reclamation. See more here.
- In Bolivia and Burkina Faso, Consolidated Autonomous Due Diligence (CADD) is an open-source framework for upstream supply chain stakeholders, including artisanal and small-scale miners, smelters or refiners (SoRS) and other supply chain participants, to conduct due diligence, intended to stimulate responsible sourcing and improve reporting. See more here.
- Due diligence ready! (portal) and video
- EU ‘conflict minerals’ regulation and ‘The regulation explained’
- OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (second edition)
- European Partnership for Responsible Minerals (EPRM)
- OECD Practical actions for companies to identify and address the worst forms of child labour in mineral supply chains
- International Peace Information Service (IPIS) study on “Insights on due diligence in mineral sourcing”
Related EU webpages: