cfsi annual conference 2015

The Conflict-Free Sourcing Initiativewww.conflictfreesourcinginitiative.org | @EICCoalition | @GeSIConnect

September 24-25

San Jose, CA

CFSI Annual Conference

The Conflict-Free Sourcing Initiativewww.conflictfreesourcinginitiative.org | @EICCoalition | @GeSIConnect 2

Assent Compliance

Thank you to our lunch sponsor


Thank you to our reception sponsor


September 24-25

San Jose, CA



What Should

Companies Know

About the OECD

Due Diligence

Process?

OECD Due Diligence Guidance for

Responsible Mineral Supply ChainsWork plan and cross-cutting principles

Objectives

1

Enhanced positive impact

of due diligence in

conflict-affected and high-

risk areas

• Reduce the opportunities for armed

groups & public security forces to

benefit from mineral production and

trade

• Improve livelihoods of artisanal

miners and local communities &

reduce barriers to engagement

• Strengthen local government

capacity to regulate & supervise its

mineral sector, improve data

collection, increase revenues and

stem illicit trade linked to the

production and trade of minerals.

2

Increased transparency

and accountability

globally in mineral supply

chains

• Improved private sector due

diligence in producing, processing

and consuming countries – lower

costs, increase effectiveness

• Increased market and industry

initiatives on responsible mineral

supply chains

• Improved awareness and

governance among relevant

government authorities in new

producing, processing and

consuming countries

• Better & more incentives and

benefits for implementing due

diligence

3

Improved understanding

& awareness of natural

resource-connected

conflicts, informal

economy & role of private

sector beyond 3TG

• Improved understanding and

implementation of due

diligence beyond 3Ts and

gold supply chains

• Better informed and more

comprehensive policy-making

and actions

So how?

The OECD Due Diligence Guidance: 5-step framework

Due Diligence vs. Compliance

Not intended to provide 100% certainty on the conflict-

free status of minerals, but focus on the processes

to identify, prevent and mitigate risk based on

available information

On-going, proactive and reactive: Information and

due diligence systems should be progressively

improved over time

Risk-based approach: the higher the identified risk,

the more intensive the due diligence and monitoring

Identifying, assessing, reporting and mitigating risks

can demonstrate reasonable and good faith due

diligence efforts; constructive engagement with

suppliers enables companies to progressively improve

due diligence practices

Responsibility that appropriate due diligence on

individual supply chains has been carried out lies with

the company but industry initiatives can take on

due diligence activities that help members to assess

the circumstances of their supply chains, sharing costs

and lessening the burden of data collection

Due Diligence Approach

Example of company Action

Risk-based approach / Prioritization of higher risk

Prioritize products with significant 3TG and key suppliers

Allocate more resources for follow up with unresponsive suppliers, unusual circumstances, etc.

Through industry programmes, ensure upstream actors conduct more enhanced monitoring and assessments on higher risk mines, export points, etc

Progressive improvement

“Comply or explain” - For supply chains with limited or unknown information, map plan for improvement, with benchmarks and publicly report

Flexible, tailored to size of company, position in supply chain, etc.

Top-down due diligence: obtain smelter info through engagement with direct suppliers

Bottom-up due diligence: use industry leverage to get pressure smelters to become audits and direct sourcing

Use smart mix of both for products, based on complexity in the supply chain, available info, leverage

“Reasonable and good faith efforts”

Demonstrate through public reporting –“know and show” you are on the right track

Global application Engage through industry associations and initiatives (i.e. CFSI and CFS) to expand smelter due diligence audits expectations beyond Africa’s Great Lakes Region

Thank you

For further information on the OECD’s work on

Responsible Business Conduct

http://mneguidelines.oecd.org/

http://www.oecd.org/corporate/mne/mining.htm

http://mneguidelines.oecd.org/

http://www.oecd.org/corporate/mne/mining.htm

http://mneguidelines.oecd.org/responsible-business-conduct-matters.htm

http://mneguidelines.oecd.org/responsible-business-conduct-matters.htm

Activities 2015-2016

Peer Learning & Knowledge

Sharing

ASM Hub

Share learnings about ASM issues &

connect producers, buyers, experts &

donors, visibility for emerging project.

SME Implementation

Support training and other tools for

SMEs on implementing due diligence

Informal working group on 3Ts

Discuss specific risks in 3T supply

chain and reduce barriers

Worst forms of child labour

Mainstream WFCL awareness into all

activities, develop tools for risk

assessment and management

Strengthening and harmonising

audit system

Activity 1

Outreach & Training

Activity 2

DRC

In-country trainings

Turkey

Industry training with local gold

downstream actors

India

Initial engagement

Colombia

Baseline assessments & follow-up

ICGLR

Support Technical Unit

China

Guidelines on responsible

sourcing practices of minerals

West-Africa

Roadmap for cooperation

In 2015, the CCCMC

will publish guidelines

and a smelter/refiner

audit mechanism to

implement the OECD

Guidelines.

Research & Analysis

DRC Gold Baseline Assessment

5 studies + overview report

Columbia gold baseline

assessment

To be released in 2015 and 2016

Research on links of other mineral

resources to human rights abuses

and conflict – end-2015/early 2016

Independent assessment of

implementation efforts & programs

with OECD Guidance – end-2015/

early 2016

Artisanal miners’ livelihoods in

eastern DRC - 2016

Evidence-based analysis of the impact

of international programmes on the

ground.

Activity 3

Market Oriented Initiatives

Artisanal gold mining sourcing

toolkit to develop market access for

responsible artisanal gold.

Support implementation of due

diligence programmes for ASM gold

5 studies have been commissioned.

Facilitation of pilot projects.

Activity 4

Photo credits:

Slides 1, 2, 3,4, 5, 9, 10: Adapted from © Sasha Lezhnev, Enough Project,

Flickr

Slide 6: © OECD

Slide 7: Adapted from © Knut-Erik Helle, Artisanal Gold Miner, Flickr

Slide 8: Adapted from © Ib Aarmo, Flickr


September 24-25

San Jose, CA


September 24, 2015

Social and Human Rights Performance

• Primary Drivers: Regulation, Materiality, Mission Alignment

• Social Performance and Social Value: Growing trend among investors on social outcomes

• RSN Leadership:

– Multi-Stakeholder Group

– SEC comments referenced almost 50 times in final Rule

– Expectations Shortlist with Enough Project and 26 NGOs/SRIs

– Mining the Disclosure (MtD) 2014 and 2015

Measurement Areas

Traceability Links

1. Control systems. Know exactly what goes into each product, and where it comes from.

2. Supplier leverage. Constructive engagement, clear expectations, and consequences.

3. SOR compliance. Communicate directly with SORs, visit SOR locations, fund audits, and increase leverage.

4. In-region impact. Increase supply of conflict-free materials from the region, and measure outcomes for communities.

Transparency is key

Transparency is key.• Makes global 3TG more traceable. • Allows a company to be fairly evaluated against its peers.• Supports accountability.

IPSA and the MtD Score

• MtD scores developed to reward companies for taking responsibility

• IPSA provides a level of assurance that report reflects what a company is really doing

• Builds trust; nothing to hide

• Possible problems:

– DRC Conflict Free implied without an audit

– Misleading determination

– “DRC Conflict Free” without robust traceability

MtD15 Sample Group

Overall Scores

• Companies Rewarded for Transparency

Data Gathering

• RSN Accessed PubliclyAvailable Information

Sector Averages

Industry Averages

Performance Ratings per Industry

• Leaders: Set the pace

• Laggards: Need scrutiny

• Split Industries: Potential for

collaboration

Performance Rating

Measurement Area Performance

Sample Group Average:

Steps for Companies

– Actively participate in multi-stakeholder efforts or industry working groups.

– Update policy to source “conflict-free” without blockading the DRC region.

– Make sure SEC disclosure is comprehensive and to-the-point, and provide a link to additional information on a dedicated conflict minerals web page.

– Remove barriers for suppliers and SORs: information, technology, financial, leverage or language.

Conclusion

• Mining the Disclosures provides standardized and detailed evaluation of conflict minerals performance.

• 1502 has yielded results.

– Panoramic view of 3TG trade.

– Unprecedented collaboration.

– Broader adoption of supply chain responsibility practices.

“Highly respected and trusted brands consider responsible sourcing an irreplaceable part of doing good business. Companies that invest in conflict-free sourcing will create more value in the long run for shareholders.

“For the people of the DRC region, the value created by stability, transparency and prosperity is truly incalculable.”

Mining the Disclosures 2015

RSN gratefully acknowledges the Sponsors of Mining the Disclosures 2015

Gold Sponsor

Tantalum Sponsor

Tin Sponsors

Questions

Responsible Sourcing Network

Andrew [email protected]

mailto:[email protected]

https://www.sourcingnetwork.org/mining-the-disclosures

@SourcingNetwork

https://www.facebook.com/SourcingNetwork

To Download Mining the Disclosures 2015:

https://www.sourcingnetwork.org/mining-the-disclosures


September 24-25

San Jose, CA


Conflict mineralsSEC compliance evaluation and

the role of the IPSA

CFSI’s Responsible Minerals Sourcing Conference

September 24, 2015

58 Conflict Minerals—Year 3 recommendations and IPSA implications Copyright © 2015 Deloitte Development LLC. All rights reserved.

Setting the stage The legal challenge – lingering uncertainty concerning the IPSA

SEC’s Partial Stay

• Given the SEC’s partial stay and the “temporary suspension” of the broad applicability of the independent private sector audit (IPSA) requirement, when will the IPSA be required?

Expiration of Temporary Transition Period

• How to balance the SEC’s partial stay with the expiration of the temporary transition period provided for in the Final Rule to determine the adequacy of disclosure for the 2015 calendar year reporting?

Driving Conflict Minerals Compliance

• How to drive continued conflict minerals compliance program performance improvement with supply chain partners in light of regulatory uncertainty?

US Court of Appeals for the DC Circuit (DC Court) Ruling1

• On August 18, 2015, the DC Court reaffirmed its April 14, 2014 ruling that the requirement for companies to describe their

products as “not been found to be DRC conflict free” violates the First Amendment.

• Market participants remain uncertain around how the issue will ultimately be resolved and are awaiting guidance from the

Securities and Exchange Commission (SEC). The main challenge for registrants are:

1 Nam Et Al., v. SEC Et Al.,. US Court of Appeals, DC Circuit. 18 Aug. 2015


An opinion or conclusion is to be expressed as to:

1) Whether the design of the registrant’s due diligence framework, set forth in the Conflict Minerals Report (CMR), is in

conformity with, in all material respects, the criteria set forth in the nationally or internationally recognized due

diligence framework used by the registrant

2) Whether the registrant’s description of the due diligence measures set forth in the CMR is consistent with the due

diligence process that the registrant undertook

Two types of engagements are allowable:

Examination attestation engagement Performance audit

• May only be performed by CPAs or individuals

working for a licensed CPA firm or a

governmental auditing organization

• Standard form of the report

• May be performed by CPAs or individuals working for a licensed CPA

firm or by persons other than CPAs or CPA firms

• Report contains the audit results, including findings, conclusions, and

recommendations including, but not limited to:

‒ A description of the nature and extent of the issues being

reported and the extent of the work performed that resulted in

the finding

‒ Details of the performance audit, including objectives of the

procedures performed in conducting the audit and results of

such procedures

Understanding the IPSA

Setting the stage


Year two filing analysis and IPSA implications CMR approach: Organizing the CMR

The Situation The IPSA Implication(s) The Significance

• Organizing description of due

diligence using steps of the OECD

Framework:

− ~58% of registrants used the

steps of the OECD Framework

to organize their due diligence

description (~47% in prior

reporting year)

• Due diligence-related elements of

the registrant’s conflict minerals

compliance program can be

organized and disclosed in a manner

to be easily identifiable as subject to

the IPSA

• Assists IPSA provider in

understanding how the registrant’s

activities align to each OECD step

• Distinguishing RCOI from due

diligence:

− ~55% of registrants did

separate RCOI from due

diligence (~47% in prior

reporting year)

• The IPSA provider need only opine

on whether the design of the

registrant’s due diligence framework

is in accordance with the due

diligence realted portion of the

nationally or internationally

recognized due diligence framework

(i.e., OECD Framework):

− RCOI is a distinct step separate

from the due diligence process

• The IPSA provider can more

efficiently identify the content of the

CMR that will be subject to the

IPSA

• Increases clarity in describing the

registrant’s conflict minerals

program

• Minimizes duplication in the

process description

The following should be considered when organizing the CMR:


Year two filing analysis and IPSA implications CMR approach: Suitability of criteria

The Situation The IPSA Implication(s) The Significance

• Year two filings included various

approaches to describing the

registrant’s conflict minerals

compliance program, including the

following:

− Quantitative descriptions (e.g.,

number of suppliers surveyed,

survey response rate and

number of smelters identified)

− Qualitative descriptions (e.g.,

general requirements

established for all suppliers,

overview of supplier

engagement, involvement in the

CFSI)

• The registrant’s description of the

due diligence measures performed

must meet the suitable criteria

requirements (e.g., measurable,

objective, relevant, and complete):

− Example language: “The

company sent surveys to its key

suppliers”

− Language that would facilitate

ease of auditability: “The

company sent surveys to a total

of 100 suppliers, which

represents the population of

suppliers that supplies 3TG to

the company”

• The IPSA provider will use the

registrant’s description of due

diligence measures performed as

the criteria against which they will

evaluate the due diligence

measures the registrant actually

performed


Example CMR

Exhibit 1.01

Conflict Minerals Report (excerpt)

I. Introduction

[The registrant includes an introduction section, although not required.]

II. Reasonable Country of Origin Inquiry

OECD Step X:

[The registrant includes a description of the measures taken in

accordance with the OECD steps considered to be RCOI.]

III. Due Diligence Design and Performance

1. Due Diligence Design:

The design of the Company’s due diligence framework conforms to the

due diligence related steps of the OECD Framework.

2. Due Diligence Measures Performed:

OECD Step X1:

The registrant contacted the 435 non-responding suppliers up to three

times to obtain a survey response.

IV. Independent Private Sector Audit

[If an IPSA was obtained, the registrant includes a statement that it

obtained an IPSA of the CMR and provides the audit report prepared by

the auditor in accordance with standards established by the Comptroller

General of the United States. The registrant identifies the independent

private sector auditor of the report if the auditor is not identified in the

audit report.]

[The registrant might note that the IPSA report is provided along with the

CMR; however, this is not required.]

V. Product Disclosures

[The registrant provides a description of its products. If the registrant

voluntarily labels any of its products as “DRC conflict free”, the registrant

should consider clarifying which products are “DRC conflict free” and

which are not].

VI. Smelter/Refiner Disclosures

[The registrant includes the list of smelters/refiners used to process the

necessary conflict minerals in their in-scope products, the country of

origin of the necessary conflict minerals in those products, and the efforts

to determine the mine or location of origin.]

VII. Future Measures

[The registrant might include a description of any planned future

measures to improve due diligence processes if the registrant

manufactures or contracts to manufacture products that the registrant is

unable to determine whether or not such products qualify as “DRC

conflict free”.]

In order to test the design assertion, the IPSA practitioner may conduct

interviews to understand the registrant’s program design in accordance

with the due diligence related steps of the OECD Framework, and request

documentation to support the alignment of the registrant’s conflict

minerals compliance program to the OECD Framework.

The IPSA practitioner may (1) ask how the registrant identified the

population of 435 non-responding suppliers, (2) obtain the listing of the

435 suppliers, and (3) select a sample for testing. For the sample

selected, the IPSA practitioner may request evidence that the supplier

was contacted up to three times (e.g., e-mails or logs the registrant

maintained by using a conflict minerals technology tool).

Year two filing analysis and IPSA implications

63 Copyright © 2015 Deloitte Development LLC. All rights reserved.Conflict Minerals—Year 3 recommendations and IPSA implications

Registrants should consider:

• Seeking the advice of SEC legal counsel when determining whether and when the IPSA is

required, especially in light of recent developments

• The potential implications related to the organization of the RCOI and due diligence

disclosed in the CMR

• Evaluating the clarity and sufficiency of disclosures in the CMR of due diligence

measures performed

• Taking demonstrated and focused efforts to increase the level of confidence in the data gathered

and performance measurements related to supplier engagement, and focus on sufficiency

of documentation to support activities undertaken and related disclosures

• Seeking assurance readiness to be prepared for an IPSA

• Engaging with your IPSA provider early

Next steps

This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment,

legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a

basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should

consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and

their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not

provide services to clients. Please see www.deloitte.com/about for a detailed description of DTTL and its member firms. Please see

www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest

clients under the rules and regulations of public accounting.

Copyright © 2015 Deloitte Development LLC. All rights reserved.Member of Deloitte Touche Tohmatsu Limited


September 24-25

San Jose, CA


The Unique Alternative®

Audit | Tax | Advisory | Risk | Performance © 2015 Crowe Horwath LLP

Conflict Minerals Audit Readiness

Christopher McClure CPA, CFE


Audit | Tax | Advisory | Risk | Performance © 2015 Crowe Horwath LLP 67

IPSA Readiness

Who Can Perform?

Some Keys to Auditor Selection

Conflict Minerals Audit Planning

Other Audit Services

Questions?



Who Can Perform?

CPAs

Performance Auditors

Consultants (Maybe)

Financial Statement Auditors -

Yes – (note the extra

disclosure requirement)

What Can They Do?

Assess

Recommend

Comment

X Design

X Implement

X Prepare

X Lead

X Train

X Make Management Decisions



Some Keys to Auditor Selection

Independence

Expertise

Specialized - preferably both consultants and auditors

Accessible – available to you for planning and execution

Demonstrable – more than checklists

Efficiency

Cost

Proactive Communication

Geography?




Design of the issuer’s due diligence

framework as set forth in the Conflict

Minerals Report, with respect to the

period covered by the report, is in

conformity with, in all material respects,

the criteria set forth in the nationally or

internationally recognized due diligence

framework used by the issue, and

Issuer’s description of the due diligence

measures it performed as set forth in the

Conflict Minerals Report, with respect to

the period covered by the report, is

consistent with the due diligence process

that the issuer undertook.

Now - Begins with

assessment of design, gap

analysis, and review of

documentation

Discuss current year filing

now. Finalize during

fieldwork in April/May 2016

• Cornerstone memo

• Supporting schedules

• Technology Provider

support

• Due diligence description

• Support for objective

measurements

Opinions Timing Key Documentation




Feb March April May June July Aug Sept Oct Nov Dec Jan Feb March April May2015 2016

Customer Responses

Prep SD/CMR

& File May 31

Data Validation

Prep SD/CMR

& File May 31

2015 Supply Chain Review and Supplier Collection

2014 Supply Chain Review and

Supplier Collection

Determine Audit Requirements / Conduct Audit PrepConduct Audit

Fieldwork



Other Audit Services

Additional Examination Services

Internal Audit Review & Support

Third-Party Risk Reviews



Contact Information

For more information about the conflict minerals

rule, please visit the Crowe Horwath LLP

Conflict Minerals Resource Center at

www.crowehorwath.com/conflict-minerals.

Crowe Horwath LLP is an independent member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath International is a separate

and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any

other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or

any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member

of Crowe Horwath International. © 2015 Crowe Horwath LLP

http://www.crowehorwath.com/conflict-minerals



Christopher McClure

Midwest Practice Leader – Forensics

312.606.7123

[email protected]

Christopher leads the Midwest Forensic Practice of Crowe Horwath. He and his team assist companies

and their counsel in dealing with complex litigation, arbitrations, and investigations. Christopher has

served as an expert witness on multiple occasions and has significant experience dealing with SEC,

EPA and other regulatory issues.

Christopher leads Crowe’s efforts to assist clients with the new Conflict Minerals reporting requirements

under Dodd-Frank. He is a frequent speaker on the subject, most recently at the CFSI Annual

Workshop, National Association of Corporate Directors, and through the Practicing Law Institute.

He is a CPA, CFE, and CFF and has an MBA from the Kellogg School of Management at Northwestern

University. Prior to Crowe, Christopher was with Arthur Andersen and Navigant Consulting.

Licenses and Certifications

Certified Public Accountant (CPA) IL and TX

Certified Fraud Examiner (CFE)

Certified in Financial Forensics (CFF)

Professional and Civic Affiliations

American Institute of Certified Public Accountants

Illinois & Texas CPA Societies

Chicago Bar Foundation

Cabrini Green Legal Aid Foundation

Expertise

Conflict Minerals Due

Diligence & Reporting

Regulatory Issues

Education

M.B.A.

Kellogg School of Management at

Northwestern University

Bachelor of Science Accounting/Finance

Trinity University


September 24-25

San Jose, CA


Cost and Impact of Requiring all Downstream Companies to Report for EU Conflict Minerals RegulationJay A. Celorie

September 24, 2015

76

HP Engagement in Conflict Minerals Leadership

The possibility that our products might be connected to armed conflict is unacceptable to HP.

We have been working to be conflict free for more than 7 years:

– 2008-present: helped establish and lead the Conflict Free Sourcing Initiative

– 2011: established our policy on conflict minerals and began surveying our supply chain

– 2011-present: committed to use of conflict free DRC tantalum from “Solutions for Hope” project

– 2012: significant financial contributor to the Conflict Free Smelter Initial Audit Fund

– 2013: became the first IT company to publish a list of smelters

– 2014: require our suppliers to only source from tantalum smelters listed on Conflict Free Smelter List

Parliament Vote (6/2015)

Highlights of EU Conflict Minerals Regulation

Commission Proposal (3/2014)

• No impact assessment/research conducted to assess impact

• Focused on all actors in supply chain

• Mandatory self-certification for smelters and importers

• Mandatory due diligence and reporting by downstream

• Based on OECD DDG

• Global Scope

• Based on impact assessment/research to provide greatest impact

• Focus on smelters and importers

• Voluntary self-certification for smelters and importers

• Public procurement criteria for downstream

• Based on OECD DDG

• Global Scope

78

The Downstream Supply Chain—How it worksThe OECD DDG focuses the downstream on identifying and assessing the smelters

Brand Mfg

ODM/CM

Component

Sub Comp.

Raw Metal

Supply Chain Engagement:

• Survey to identify smelters

• Lag in response, no line of sight

• Over reporting of smelters

• Opaque beyond

79

Part/Dist.Comp

onentComponentComp

onentComponentComp

onent

SEC Report:

• Steps taken

• Smelter list

• Information on smelters sourcing countries and their due

Smelter

Assess Smelter Due

Diligence and Risk:

• CFSI• Research• Engagem

ent

The Downstream Supply Chain—Cost and Impact

Brand Mfg

ODM/CM

Component

Sub Comp.

Raw Metal

Cost: 2014 Tulane Study

• Estimated average issuer spending >$500k each in labor, information systems, and external experts

• ~$700 M spent in

80

Part/Dist.Comp

onentComponentComp

onentComponentComp

onent

My observation: Impact from Reporting

• A race to the top by about 30-40 companies

• RSN report

Smelter

Impact: 2015 Tulane Study

• 1267 Filings

• 1010 CMRs

• 41% listed SORs

• 86% issuers did not support an audit

What made an Impact?

• Companies directly engaging smelters

• Free audits• Closed

pipe projects

• Traceability schemes

OECD DDG:

• There are no red flags in down-stream!

The Upstream Supply Chain—How it worksThe OECD DDG focuses the upstream on conducting due diligence on the chain of custody of minerals when sourcing from conflict affected areas

Trader or Mine

Exporter

Comptoir

Smelters Decide!

• Control who they buy minerals from

• Whether they request sourcing information

• Whether to be audited

• All OECD red flags are in upstream

81

NegotiantExport

erExporterExport

erExporter

CFSI Progress:

• 220% increase in compliant smelters from Jan 2014 to date

• 192 compliant, 41 active smelters today of the 313 identified (74%+)

Smelter

Reporting Sourcing:

• Detailed sourcing is not generally made public due to business confidentiality

Mine

Traceability Scheme

If EU Requires Downstream to Report DD—Cost and Impact

Brand Mfg

ODM/CM

Component

Sub Comp.

Raw Metal

82

Part/Dist.Comp

onentComponentComp

onentComponentComp

onent

Smelter

Cost and Impact:

• What will be the impact to conflict-affected areas by the downstream producing 880,000 reports?

• If every company spends an average of $10 k, that would cost $9 TRILLION —with virtually nothing going towards the conflict-affected areas

• There are no red flags in downstream! The only option for downstream companies to ‘manage risk’ is to blacklist high risk smelters.

If the Parliament Proposal was adopted it would impact an estimated 880,000 Companies!

A better option for EU: Require Downstream Companies to have a policy, email/call smelters, and write a $500 check (cheque)

Brand Mfg

ODM/CM

Component

Sub Comp.

Raw Metal

83

Part/Dist.Comp

onentComponentComp

onentComponentComp

onent

Smelter

Recommendation:

• Conflict free is dependent upon smelters—therefore; focus downstream on:• Have a company policy that defined their commitment and informs their

expectations of suppliers• Engaging smelters by email or phone to become audited (do them all—

today there is 80)• Write a $500 cheque to support

• CFSI, LBMA, RJC audits

• CFSI smelter vetting

• Traceability for closed pipe projects in conflict affected areas

• Organizations like the tripartite Public Private Alliance for Responsible

Mineral Trade• If every company wrote a $500 cheque per year, $440 Million could be used

to advance responsible sourcing annually

If the Parliament Proposal was adopted it would impact an estimated 880,000 Companies!

Thank you

Jay Celorie

[email protected]

84


September 24-25

San Jose, CA



Conflict Minerals Reporting TemplateMastering the CMRT

LAKE KIVU

Agenda

• Overview of CMRT Development Process

• Principles of CMRT

• Review of major changes

• Answer your questions!

The Conflict-Free Sourcing Initiative | www.conflictfreesourcing.org | @EICCoalition | @GeSIConnect 87

CMRT is a collaboration

• CMRT began in July 2011 as a survey tool

• Declaration aligns to IPC’s standard, IPC-1755– Broad industry reach

– Wide participation of users

• CFSI Due Diligence Data Collection Team– User group

– Annual review of technical approach (i.e., adding new functions)

– Content driven discussions

– Pre-release Testing

– Supporting guidance in process


Guiding Principles for CMRT Modifications

• Universal access

• Global reach

• Increase accuracy of data

• Increase consistency of data

• Minimal impact on supply chain operations

• No change is guaranteed; ideas are reviewed and then the workgroup decides whether to create a new version. Typical review is twice a year.

• Workgroup recommendations impacting IPC-1755 are submitted to the IPC committee for consideration and possible incorporation. CMRT is not amended until/unless those ideas are adopted (excludes form and function improvements).


CMRT 4.x – Summary of Major Changes• Alignment to IPC balloted changes (March 2015)

– Terminology “conflict minerals” now labeled “3TG” – Question 7 “has all applicable smelter information … been reported”

is answered only with Yes/No

• Smelter Reference Tab – more data– Common alternate names– Location data

• Smelter list: “metal” turns red if invalid selection is made in column C. Known smelter data will “auto populate” the chart.

• Checker function: last four rows turn green when appropriate metals are selected on the smelter list


Alignment to IPC Changes


Alignment to IPC Changes (cont’d)


Question D dropped former reference to independent private sector audit firm.

Question 7 dropped the answer “unknown.”

Smelter Reference List Tab


Smelter List: Metal Color; Auto Populate Location


Smelter List Entry: Selection by Drop-down

• Select names from the drop-down smelter list


Smelter List Entry: “Copy/Paste” - Use care

• A list can be imported, provided that the copy/paste uses the “paste – values” function


Example: Internal list

Wrong way: PasteThis overwrites code

Right way: Paste ValuesThis preserves codeUser should review red items

A Few Minor (But Nice) Features

• Spacious number of smelter rows – 2,500!


A Few Minor (But Nice) Features (cont’d)

• Check Tab - final four rows: green when at least one metal is entered per each declared metal.



• Product tab allows up to 1,000 entries and also accepts new rows. Use “Insert Rows” command.



• Languages! Available by selecting the language from cell D3 on Declaration tab.– Chinese

– French

– German

– Italian

– Japanese

– Korean

– Portuguese

– Spanish



• Standard Smelter List, including revision history, available online

http://www.conflictfreesourcing.org/conflict-minerals-reporting-template/training/


http://www.conflictfreesourcing.org/conflict-minerals-reporting-template/training/

Contact Information

• To reach today’s presenter:– John Plyler, [email protected]

• To reach CFSI staff or to report CMRT errors– Tara Holeman, [email protected]



September 24-25

San Jose, CA


Improving Supplier Data Collection: JEITA’s Effort and Perspective

September 24, 2015

Kazuko Andersen

Japan Electronics and Information Technology Industries Association (JEITA)

What is JEITA?

Headquarters: Tokyo, Japan

Established: 1948

Membership: 390 companies

Production: About 40 trillion yen

Objective: Promote best practice manufacturing, technological development, international trade in IT and electronics markets.

Activities: International and industry standard development, CEATEC Japan trade show, etc.

105

What JEITA does and Why?

• CFSI partner since January 2012

• Formation of JEITA Responsible Minerals Trade Working GroupLaunched: December, 2011Membership: About 40 companies (http://home.jeita.or.jp/mineral/eng/wgm.html )

Meeting: Bi-weekly (Monthly with Auto manufacturers)

Roles: – Develop and promote policies and action plans for responsible sourcing of 3TG– Formulate recommendations from JEITA members and present to CFSI– Build a multi-industry collaborative network and work toward solving issues

regarding responsible minerals trading

106

http://home.jeita.or.jp/mineral/eng/wgm.html

JEITA Responsible Minerals Trade Working Group

Structure• Communication Team

– Collect information and submit comments on new regulations– Stakeholder engagement

• Education and PR Team– Organize Conflict Minerals data collection seminar

• Data Exchange and Standard Development Joint Task Force– Work on CMRT revisions– Participate in development of IPC-1755 Data Exchange standard

Collaboration with Japanese Auto manufacturers• Japan Conflict Free Sourcing Working Group

– Harmonize approaches such as the use of CMRT and CMRT guide– Smelter outreach

107

Annual JEITA Briefing Highlights

• 800 people attended in 10 locations

• Case study

Comparison of 2013 & 2014 survey results using CMRT

– Most answers to Q1 & Q2 were synchronized

– Q3 “unknown” answers decreased significantly

– Q4 “No” answers increased

– Among all company policy questions, “Yes” answers to Questions D and F declined.

108

Annual JEITA Briefing Highlights

Comparison of 2013 & 2014 survey results using CMRT (continued)

– “Smelter not listed” submission decreased—Overall number of smelter submission decreased

– Many duplicate smelter names were found

– CMRT did not reach smelters/refiners

– Copy/paste from older version of smelter list creates discrepancies→ It is important to check the accuracy of smelter list before the list is propagated down the supply chain.

– Inconsistent Declaration Scope requests

109

Where JEITA Stands

1. Recommends use of CMRT

2. Backs the CFS Program and insofar as possible participates in smelter engagement

3. Supports conflict-free sourcing from the DRC and adjoining countries

110

Towards Improving Data Collection

Recommendations

• Work with industry peers and involve in industry activity

• Alignment across the supply chain toward improving data collection

– Capacity building upward of the supply chain

• Interdepartmental alignment

111

Communication & Training

• Industry association-led training

– Customers & suppliers

– Forum where Q&A session is provided

• Grassroots-level training/supply-chain capacity building

– Improve understanding of conflict minerals issues, use of CMRT, etc.

• Internal communication/training

• New tool: CMRT guide (under development)

112

Thank you!

http://www.jeita.or.jp/english/ -------------------------

http://home.jeita.or.jp/mineral/eng/index_e.html

113

http://www.jeita.or.jp/english/

http://home.jeita.or.jp/mineral/eng/index_e.html


September 24-25

San Jose, CA


SupplierSoft Confidential 115

Mastering the CMRTCFSI 2015

Agenda

Steps To CMRT Creation

CFSI Membership – how it helps

Other CMRT thoughts

116

Steps to CMRT Creation

117

Get CMRTFrom

Suppliers

AnswerQ1/Q2

AnswerQ5

AnswerQ7

AnswerQ6

AnswerQ3/Q4

PercentsuppliersResponse

All Smelters

IDed/Reported?

Sourcefrom CC

RS?

CheckFor

Errors

Get CMRT From Suppliers

118

Get CMRTFrom

Suppliers

AnswerQ1/Q2

Make it easy on suppliers

Email or upload to a link

Typical Barriers

Username/Password

Training requirements

Check CMRT For Issues

Checker Tab good start…

Lot more needed!

Smelter List

Declaration Consistent with

Smelter List

Automated tool Helps!

CFSI Membership Helps!

119

Get CMRTFrom

Suppliers

AnswerQ1/Q2

CheckFor

Errors

Smelter Questions

120

Do I have 3000 Smelters?

How many are duplicates?

Are they a smelter?

Where do smelter source from?

CFSI Membership

Data Public MembershipKnown Smelters 300+ via

CMRT

Compliant/Activesmelters

Yes

Smelter Information Exchange (SIE)

2700+ Entities

Non-Smelters 1500+ Entities

Alleged Smelters 850+

Smelter Aliases 170 via CMRT 10,000+

Smelter RCOI Yes

121

Q5

Track suppliers by specific 3TG metal

100 suppliers, only 10 have Tungsten

122

Get CMRTFrom

Suppliers

AnswerQ1/Q2

AnswerQ5

CheckFor

Errors

Q6

123

Get CMRTFrom

Suppliers

AnswerQ1/Q2

AnswerQ5

AnswerQ7

AnswerQ6

CheckFor

Errors

Answering Yes to Q6

Strict Interpretation

Heard from 100% suppliers in scope (Q5)

All suppliers answered Yes to Q6/Q7

None suppliers have Non-Smelters

Looser/Reasonable interpretation

Heard from majority of suppliers (Q5)

More supplier responses won’t change smelter list

Most suppliers have answered Yes to Q6/Q7

Most suppliers don’t have Non-Smelters

124

Q3/Q4

125

Get CMRTFrom

Suppliers

AnswerQ1/Q2

AnswerQ5

AnswerQ7

AnswerQ6

AnswerQ3/Q4

CheckFor

Errors

Q3/Q4

Redundant – can be computed!

Based on where smelters source from

Supplier Response to Q3/Q4 not reliable

Few smelters have publicly disclosed

How to tell smelter sources from?

126

CFSI RCOI Data

CFSI Due Diligence (Audit) => RCOI

SEC Guidance RCOI =>Due Diligence

127

CFSI Data vs. Other Sources

CFSI is Gold Standard

Public data referenced by all SEC filers

Private data used by members -> SIE, RCOI data

RCOI data from real audits

Created by X-Industry Member Companies

Have leverage over supply chain

Have resources worldwide in multiple languages

Use other sources with caution!!

128

Question 7

Why not report all smelters?

Confidentiality? If so push back

“Smelter Not Listed” (Alleged) Smelters

If you don’t report these, can you say Yes?

Supply Chain Capacity on Alleged Smelter

Smelter Information Questionnaire (SIQ)

129

Answering A-J Policy Questions

Several are inter-related

B (Policy on Website) depends on A (Have a policy?)

E (DD measures) depends on H (Review DD info from Suppliers)

I (Review includes corrective action) depends on H (Review DD info from Suppliers)

130

Other CMRT Thoughts

Are you Conflict-Free?

CMRT has no such question

Can be computed

All smelters identified/reported

and compliant

131

132132

About SupplierSoft

Leading Edge CFSI Member Customers

Platform for all Supplier Interactions

Top 10 Vendors to Watch

Salesforce.com Innovation Showcase

408-690-8575

133

[email protected]


September 24-25

San Jose, CA


Presented by:

Bruce Calder

VP Consulting Services

DESIGN AND IMPLEMENT A STRATEGY TO RESPOND TO

IDENTIFIED RISKS

Step 3 of the OECD Due Diligence Guidance

Step 3 - OECD Due Diligence Guidance

• Nightmare situation

• You have done everything properly

• Illegal activity discovered for a smelter identified by your suppliers

• Are you Not DRC Conflict Free?

• Not if you follow Step 3 of the OECD Due Diligence Guidance

Claigan - Conflict Minerals

• Services

• RCOI

• Due Diligence

• Experience

• Quoted in the SEC final rules 18 times

• Testified to Congress on Conflict Minerals

• Met with all SEC Commissioners regarding Conflict Minerals

• Works with CFSI on verification of new smelters

Claigan - Due Diligence has been Audited

• Claigan has passed an IPSA

Smelter Based Due Diligence - Summary

Contact each smelter directly

Request DRC Sourcing Information

Verify against Public Sources

Leverage Conflict Free Smelter Program(for smelters sourcing from the covered countries)

Smelter - Data Sampling

• An IPSA audit will sample the data

• Supporting documents need to be available

Smelter Based Due Diligence

• Conducting due diligence of smelters directly

• as opposed to through suppliers

• Summary

• Easier

• More effective

• More ‘audit friendly’

• Far less expensive

Step 3 - OECD

• Design and implement a strategy to respond to

identified risks

• Example

• You have done everything right, but you

discover a ‘negative actor’

• Are you now not DRC Conflict Free?

• Not if you have a process to mitigate the risk

and implement that process

• …and document it for your IPSA auditor

Example

• Example 1

• Trader found by media to have be caught smuggling gold from

the DRC.

• Previous shipments by smuggler have been labelled UAE Gold

and linked to a smelter in your supply chain?

• Example 2

• Customer identifies a smelter that is unacceptable to them and

demands their removal.

• Now what?

Risk Mitigation

• Do I have to remove the smelter or supplier?

- Not the first step

- The OECD guidance specifically identifies that this is a

mitigation step, not an automatic removal step

• Key requirements (OECD)

- Review the model supply chain policy … to determine whether

the identified risks can be mitigated by continuing, suspending

or terminating the relationship with suppliers.

- Manage risks that do not require termination of the relationship

with a supplier through measurable risk mitigation. Measurable

risk mitigation should aim to promote progressive performance

improvement within reasonable timescales.

Risk Mitigation Process Steps

1. Determine whether the risk is a real issue.

2. If so - Identify which suppliers reported using the

‘at risk’ smelter and whether you purchase parts

that use the related metal from those suppliers.

3. If so - Request that the supplier confirm that the

materials or components provided to you contain

3TGs from that smelter.

4. If they do - Work with the smelter and/or suppliers

to correct the risk.

5. If risk is not corrected - Request your supplier

remove the smelter from their supply chain.

6. If not removed - Remove the supplier from your

supply chain.

Sudan Gold Refinery

• Sudan refinery linked to South Sudan, CAR, and

Darfur

• ‘UAE’ unrefined gold is usually smuggled African gold

UAE Mined / Unrefined Gold

• Ghana sourced gold strongly benefits from child labour

Ghana Mined / Unrefined Gold

• Zimbabwe gold refinery is financed by a US Embargo’d entity -

SINO ZIM DEVELOPMENT (PVT) LTD

Fidelity Printers (Zimbabwe)

• Refinery provides instructions on how to hand carry gold from

conflict region

Refinery Specializes in Hand Carry Gold

Risk Mitigation - Summary

• Risks

- You are going to have risks identified

- Ok, as long as you mitigate that risk

• Risk Mitigation

- Have a documented process for when risks are identified

- Execute the process

- Document any use of the process

- Documented proof of the process and the use of

the process will be requested by auditors

Claigan - Smelter Based Due Diligence

• Advantages

• Easier

• More effective

• More ‘audit friendly’

• Far less expensive


September 24-25

San Jose, CA


154 www.rcsglobal.com

Conflict Minerals Supplier Audits –An Opportunity to Engage & Validate RCOI

Michèle BrülhartHead of Auditingwww.rcsglobal.com

24 September 2015

http://www.rcsglobal.com/

155

INTRODUCTION

www.rcsglobal.com

Audit Outcomes:

• Validation of data reported in the CMRT;

• Understand supplier supply chain mapping and conflict minerals

programs;

• Communication of customer sourcing and reporting requirements;

• Engagement with suppliers on responsible sourcing of minerals.

• Supplier validation audits in Asia since

2014

• Manufacturing, sub-assembly and

assembly level

• Verification focused on RCOI

• Determination of scope,

• Supply chain mapping

• Reporting in CMRT.

156

KEY GAPS IDENTIFIED IN AUDITS

www.rcsglobal.com

Lack of clearly defined process to determine scope

Absence of or incomplete review of sub-supplier data received

Lack of understanding of the OECD DDG framework and of risks in mineral supply chains.

Factually incorrect and/or insufficient policy commitments.

Insufficient communication with sub-suppliers on conflict minerals requirements

157

WHAT ARE THE BENEFITS FOR SEC ISSUERS?

www.rcsglobal.com

• Direct validation of RCOI data as

part of due diligence.

• Address inefficiencies in supplier

conflict minerals programs.

• Explain risks and responsible

sourcing requirements.

• Address data quality issues and

test risk management process

• Ensure timely communication on

actual risks identified.

158

WHY DOES THIS MATTER TO ME?

www.rcsglobal.com

Suppliers start to understand conflict minerals as a recurring compliance

requirement but few see the impact of their action. Audits present an

opportunity to explain impact, identify concerns and assess capacity.

1. Focus on shifting supply chains, taking into account linkages.

2. Regulatory and customer requirements for mineral sourcing continue

to increase and are not limited to one specific conflict.

3. Supply chain mapping provides an opportunity to better understand

supply chains and risks associated with mineral sources.

159

OPPORTUNITIES – LOOKING AHEAD

www.rcsglobal.com

Conflict minerals provide an impressive example of collaboration

across industries and at various levels of supply chains, using

standardized tools to tackle a specific issue and that can serve as an

example for other risks around mineral sourcing.

Beyond data gathering: bring suppliers into the conversation.

Improve the quality of data as suppliers have a better

understanding of sourcing and reporting requirements

Help ensure suppliers set up internal systems to map their supply

chain regularly and increase transparency

Enable suppliers to be better prepared for new risks identified

160

[email protected]

www.rcsglobal.com

@rcs_global

Thanks

Contact us below

www.rcsglobal.com

http://www.rcsglobal.com/


September 24-25

San Jose, CA


Critiquing and

Improving Supply

Chain Surveys

U.S. SEC Conflict Minerals Regulatory Requirements

• 3TG Necessary to Functionality or Production

• Level of Influence

Scoping

• Supply chain communication

• Know or have reason to believe DRC sourcing

RCOI• Level of risk

associated with DRC sourcing

• System in place to address risks

Due Diligence

• RCOI and Due Diligence efforts and findings

Reporting

16

3

Lack of data

availability and

quality hinders

rest of process

Supplier Outreach

• Codes of Conduct

• Contractual Language

• Training, Communication

Supplier Engagement

• Email, phone

• Multi-lingual, time zones

• Escalation

Quality Review/Follow-up

• Automated or manual review for data gaps, inconsistencies

• Data periodicity

Heart of RCOI - Supply Chain Survey

16

4

Smelter/refiner

database to “fact

check” companies

listed as metal

processors in

CMRTs

169

117

155

78

39

12

85

78

100

56

46

13

0

20

40

60

80

100

120

140

160

180

1.0 0.85-0.99 0.65-0.84 0.45-0.64 0.25-0.44 0.05-0.24

2014

2013

Supplier Response

16

5

* Based on SEC filings for RY2013 and RY2014, where response rates were stated.

Should you

focus on

quantity or

quality?

Number of Filings By Stated Supplier Response Percent

Quality Control

16

6

73%

59%

33%

RSN, Mining the Disclosures, RY2013, n=51

Amnesty International & Global Witness, Digging for

Transparency, RY2013, n=100

Depth of Supply Chain Knowledge

16

7

44%

28%

48%

34%

56%

72%

52%

66%

0%

10%

20%

30%

40%

50%

60%

70%

80%

GOLD TANTALUM TIN TUNGSTEN

Percentage of Response For CMRT Question Five, RY 2014“Have you received data/information for each 3TG from all relevant suppliers?”

Complete Incomplete

Depth of Supply Chain Knowledge

16

8

46%

30%

51%

34%

54%

70%

49%

66%

0%

10%

20%

30%

40%

50%

60%

70%

80%

GOLD TANTALUM TIN TUNGSTEN

Percentage of Response For CMRT Question Six, RY 2014“Have you identified all of the smelters supplying the 3TG to your supply

chain?”

YES NO

Improving Conflict Minerals Data Collection

16

9

Greater Ability to

Detect and Respond to

Risk

Wider adoption of data quality review

and follow-up

*Standard logic checks and flags

More “teeth” for non-response/non-

cooperation

*Contractual, communication


September 24-25

San Jose, CA


172

Assessing and Enhancing the implementation

of due diligence activities by Small and

Medium Sized Enterprises (SMEs) –

Preliminary ResultsCFSI, San Jose, California, 24 September 2015

Daniel Fahey, Estelle Levin Ltd.

172

173

Introduction and Background

• SMEs do play a significant role in conflict mineral supply

chains.

• The OECD guidance states that supply chain due

diligence needs to be addressed by the whole supply

chain with appropriate adaptation to a companies’ size

and position within the supply chain

• What does appropriate due diligence for downstream

SMEs mean? What is expected of them?

• Are their best practices and how can SMEs be

supported?

173

174

Key Findings and Recommendations: Industry

• Best Practice SMEs and Large-scale Companies

• ‘Go early, give support’ model of supplier engagement:

Engage with suppliers quickly on the issue, support them in

the development of capacity re: reporting

• Adequate information flows between customers and their

suppliers

• SMEs must recognise their vital role in responsible mineral

sourcing: be proactive re: information-seeking and support

• Incentives (positive and negative) to encourage SMEs’

engagement: information, training and advice, and when all

else is exhausted, escalation measures

174

175

Key Findings and Recommendations: Industry

Associations

• Many SMEs are self-educating about conflict minerals. Industry

associations are encouraged to make reliable information sources

available online (in multiple languages) for them to use and share

with their supply chains

• SMEs possess various degrees of knowledge on conflict

minerals. Training programmes on offer should cover the full

spectrum of assumed knowledge, including entry level

• Widely used reporting templates are reported as being complex

difficult to follow, and not logically ordered. This could be

addressed in concert with stakeholders

• These templates are also often poorly translated, which adds

confusion. Industry associations should aim to use only certified

translators

175

176

Key Findings and Recommendations: OECD

• Include a best practice example of an SME adapting the DDG to

its size and risk profile in the guidance document or the

surrounding literature (“step-by-step guide”)

• Develop this best practice example in cooperation with other

relevant policy makers in this field in order to have an

internationally agreed understanding of what is expected of SMEs

• Identify and communicate together with other relevant

stakeholders benefits that companies have enjoyed as a result of

their reporting and/or due diligence activities

176

177

Key Findings and Recommendations: Government

• Laws should clearly state that SMEs in supply chains must be tasked

with only their fair share of reporting and due diligence obligations

• Existing and new entities that support SMEs should receive

assistance to develop new conflict minerals training, train more

SMEs, and develop conflict minerals information material (ideally in

multiple languages)

• Incentives should be made available to SMEs to enable their

attendance at training programmes

• Governments should assist with the establishment of regional forums

to enable knowledge sharing and peer networking.

• Governments spearhead initiatives to provide SMEs with hotlines

and resource centres that enable them to access personalised,

reliable advice about these issues free of charge.

177

178178

Thank you


September 24-25

San Jose, CA



Responsible

Sourcing in the

Region: Impacts To

Date

RESPONSIBLE SOURCING IN THE GREAT LAKES REGIONConflict Free Sourcing Initiative Workshop

September 24, 2015

JENNIFER PEYSER

CHALLENGE AND OPPORTUNITY

Recent article asks,

Is there even such a thing as conflict-free minerals?

Peyser/RESOLVE

Mine police,ChienMechantmine,South Kivu, DRC

http://www.takepart.com/feature/2015/09/04/conflict-free-minerals

CHALLENGE AND OPPORTUNITY

Particularly when you are not a mineral buyer, what can you do?

• Opportunities for engagement◦ Public-Private Alliance for

Responsible Minerals Trade◦ Current and new sourcing

pilots/collaborations

• Lessons

Tagged cassiterite,

ready for sale by a

negociant, Nyabibwe,

South Kivu, DRC Peyser/RESOLV

E

PUBLIC-PRIVATE ALLIANCE FOR RESPONSIBLE MINERALS TRADE

A multi-sector and multi-stakeholder initiative to support supply chain solutions to conflict minerals challenges in the Great Lakes Region of Central Africa.

184

PPA Delegation visit tin mine in Nyabibwe, South Kivu. From L to R: Sasha Lezhnev, Enough; Jean-Paul Meutcheho, GAM; Jen

Peyser, RESOLVE; Mike Loch, Motorola Solutions; Richard Robinson, USAID; Yves

Bawa, Pact; Maxie Muwonge, IOM)

Provides funding and coordination support to organizations working in the region to

• develop verifiable conflict-free supply chains;

• align due diligence programs and practices;

• encourage responsible sourcing from the region;

• promote transparency;

• bolster capacity of in-region civil society and governmental representatives

WHAT IS THE PPA?

185

Peyser/RESOLVE

Old minerals drum, North Kivu, DRC

PPA MEMBERS

NGOs (17)Africa Faith and Justice NetworkB.E.S.T.CENADEPDDIEnough ProjectFree the SlavesGlobal WitnessHeartland AllianceIOMIPISJewish World Watch Pact Partnership Africa Canada RESOLVEResponsible Sourcing NetworkSave Act MineSolidaridad

Governments (3)US Dept. of State USAID ICGLR

Supply Chain Actors (27)AcerAdvanced Micro Devices AppleAT&T BlackberryBoeingDell, Inc. Ford Motor Company General Electric Global Advanced MetalsGoogleH.C. StarckHP Intel

Microsoft Motorola SolutionsNokiaNVIDIAPAMPPanasonicQualcommSony CorporationSprintTelefonicaToshibaToyotaVerizon

186

Industry Associations (4 representing over 100 members) Electronics Industry Citizenship Coalition Global e-Sustainability Initiative International Tin Supply Chain Initiative World Gold Council

Provides vetted, safe, and efficient funding channel to support development and research projects in the GLR

Serves as platform to inform, manage, and leverage funding priorities by combining resources

Provides a multi-stakeholder and multi-sector community of peers to share challenges, solutions, and interests

Allows end users to communicate, demonstrate, and reinforce commitment to conflict-free mineral sourcing

Supports in-region systems alignment, especially mine site inspections, audits, and data management

A forum for downstream companies to provide input to others in the supply chain and implementers in the region, and vice versa

PPA MEMBER BENEFITS

187

PPA member Sasha Lezhnev(Enough) shakes hands with an artisanal tin miner.Nyabibwe, South Kivu, DRC.

Peyser/RESOLVE

$1.3M total contributions, USAID $5.8 million in parallel funding for infrastructure and traceability

Supporting on-the-ground work◦ Funded 3 GLR projects, one independent assessment

◦ 2015 RfP – record # proposals; to fund additional project(s)

7 “alignment sessions” with ICGLR, govts, system implementers, donors to advance coordination and alignment challenges (e.g., audit harmonization, data collection, mine site inspection)

Met key partners and actors in-region

PPA ACCOMPLISHMENTS

188

Peyser/RESOLVE

Cassiterite processing, Rutongo Mines, Rwanda

High-level briefings, e.g., SE-GLR Tom Perriello, former SE-GLR Feingold, Amb. Walkley, former U/S Hormats; member state mining leaders

CENADEP (Congolese NGO) supported civil society engagement in transparency, early warning system implementation, and accountability of S. Kivu mining sector. (2012-2014)

Partnership Africa Canada attempted to create the first traceable conflict-free mineral chain for artisanal gold from the Orientale province of the DRC. (2012-2013)

Independent assessment of three responsible sourcing initiatives, conducted by Estelle Levin, Ltd. (2014-2015)

Hotline to receive reports of suspected illicit trafficking of 3TG in Kivus and report to appropriate authorities; and produce a graphic manual on due diligence risks for artisanal miners, traders, exporters, and other upstream actors. (2015)

See http://www.resolv.org/site-ppa/ “Funded Projects” tab for more details and reports.

PPA FUNDED PROJECTS

189

CENADEP

CENTRE NATIONAL D’APPUI AU

DEVELOPPEMENTET A LA PARTICIPATION

POPULAIRE

http://www.resolv.org/site-ppa/

Fund additional in-region projects:◦ 3T miners◦ Artisanal gold◦ Regional data and civil society coordination

Support selection, funding of Independent Mineral Chain Auditor, ICGLR

Support alignment of systems implemented in the GLR

Develop messages and informational resources to support responsible sourcing◦ “Responsible Sourcing Tool Kit”

PPA YEAR 4 PRIORITIES/ACTIVITIES

190

Mine site visit,

North Kivu, DRC Peyser/RESOL

VE

1. Complete Expression of Intent (on PPA website) and Return to RESOLVE

2. Due Diligence review by USG

3. Review and sign MOU

4. Contribute pledged funds, if applicable

HOW TO JOIN

191

Website: http://www.resolv.org/site-ppa/

Contact Information: [email protected] Peyser/RESOLVE

Artisanal gold miners, ChienMechant mine, South Kivu, DRC

http://www.resolv.org/site-ppa/


SOURCING PILOTS AND PROGRAMS: LESSONS AND UPDATES

Solutions for Hope (Ta)

Conflict Free Tin Initiative (Sn)

KEMET Partnership for Social and Economic Sustainability (Ta)

New pilots on artisanal gold in development

SOURCING PILOTS: LESSONS

PPA Governance Committee takeaways:◦ Demonstrated and communicated “proof of concept” for

viability and value of sourcing Sn and Ta from DRC

◦ Provided platform for global-local engagement

◦ Demonstrated a business case for responsible sourcing

◦ Highlighted misunderstandings and mismatched expectations (e.g., defn. of “closed pipe,” expanded goals)

◦ Demonstrated the importance of identification and transparent collection of baseline data

◦ Offered examples of community partnership and beneficiation

◦ Highlighted broader challenges relating to ASM and governancePeyser/RESOL

VE

Mineral bags at

Bukavusmelter,

South Kivu, DRC

SOURCING PILOTS – ARTISANAL GOLD

98% of artisanal gold produced in DRC smuggled out of the country (UN Group of Experts, Dec. 2013)

Production and trade practices, and lack of suitable traceability system (to date) make it difficult or impossible to distinguish conflict from conflict-free artisanal gold

Companies, NGOs, and government have recognized the importance of enabling responsible gold sourcing from artisanal sources – and are engaging in new pilots

Peyser/RESOLVE

Artisanal gold purchased by negociant, South Kivu, DRC


Upstream engagement (in progress)

• USAID/DRC Capacity Building for Responsible Minerals Trade (CBRMT) – Tetra Tech establishing “model chain of custody and due diligence for artisanal gold in the DRC” – Maniema province, DRC

• PAC’s initial Orientale pilot enabled learning and new approaches being tested in their Just Gold project –Mambasa, Ituri, DRC

Poster illustrating that

minerals must be tagged

Peyser/RESOLVE

Matete Pilot

Project Capacity Building for

Responsible Minerals Trade

(CBRMT)

For more information, please contact:

Catherine Picard

802.495-0601

[email protected]

Jonathan Ellerman

802-495-0316

Jonathan.ellermann@tetratech,com


mailto:Jonathan.ellermann@tetratech,com

www.tetratech.com/intdev

Background

CBRMT is a USAID funded project implemented by

Tetra Tech. It is designed to establish and scale-up

additional traceability and due diligence systems for

tin, tantalum, and tungsten (the 3Ts) and gold

which are compliant with the ICGLR Regional

Certification Mechanism and OECD Due

Diligence Guidelines.

CBRMT is establishing one of the first model chains

of custody and due diligence for artisanal gold in the

DRC. The site is located outside Banro’s Namoya

Mining Concession in Maniema Province at Matete.

The pilot will work in collaboration with the

Coopérative Miniére des Creuseurs Affectés

(COMICA) Cooperative, technical service divisions

of the DRC Ministry of Mines, Banro Corporation,

and international gold refiners.


Current Status: Pilot Implementation

Ensuring mine site title status and

cooperative registration comply with

DRC law.

In-depth analysis of the commercial

supply chain, economic modeling,

and socio-political assessment of the

site.

Ongoing process of local stakeholder

engagement and relationship

building to clarify expectations, establish trust and build strong

working relationships with local

partners.


Next Steps

Technical assessments to increase

gold production, map the supply

chain in full, and enumerate

miners within and outside the cooperative.

Develop MOUs with key

stakeholders. Banro COMICA

Design and testing of OECD compliant traceability and due

diligence systems.

Develop models for financing,

downstream acceptance, and

business sustainability.

Partnership Africa CanadaJUST GOLD

A CONFLICT-FREE ARTISANAL GOLD PROJECT

Objectives: Brings legal, conflict-free and traceable gold from artisanal mines in Democratic Republic of Congo to the international market, while supporting the formalization of the artisanal mining sector.

Second pilot project underway in Mambasa, Ituri with 300 miners registered and trained.

The first trial export of traceable artisanal gold from DRC is expected October 2015.

Just Gold exports will comply with ICGLR Certification and OECD Due Diligence Guidelines.

First pilot in Orientale Province (2012-2013): 92% of gold from registered miners sold to participating traders, with training and new equipment increasing yields by 30%.

How it works: Through the Just Gold project, Partnership Africa Canada facilitates the guarantee and due diligence for gold by establishing a “Model Trading House.” Artisanal gold miners are trained in better exploitation techniques and provided with equipment, in return for which the gold produced must be sold through legal channels and tracked.

For more information about the Just Gold project:

Joanne Lebert | Director—Great Lakes Programme | [email protected] | 600-331 Cooper, Ottawa, Ontario, K2P 0G5, Canada |Tel. +1.613.237.6768


http://www.pacweb.org/


Supply chain engagement (in development)

• Refiners and downstream companies supportive of responsible ASGM sourcing:

o Have signaled they are willing to have responsibly-sourced, artisanal gold from GLR in their supply chains

o Have begun to explore potential pilots, in a coordinated way and in keeping with OECD, LBMA, ICGLR, national frameworks, etc.

o Welcome engagement by other refiners/downstream users

Peyser/RESOLVE

Artisanal gold

processing, South

Kivu, DRC

RESPONSIBLE SOURCING:YES, THERE IS SUCH A THINGProgress requires

collaborative design, testing, and learning .

Peyser/RESOLVE

“We’re all trying to learn together. Companies are doing what they can within their sphere of influence. It’s early in the process, and we don’t have a perfect system, but . . . these efforts are moving the needle.”

– Carolyn Duran, IntelTakePart, 9/4/15

“It’s a company’s obligation to source responsibly. It’s a government’s obligation to provide security and provide the basic needs for the population. It’s up to civil society to provide oversight

and raise awareness on issues. Everyone has a role to play in solving this issue.”

– Mike Loch, Responsible Trade LLC

International Business Times, 18 September, 2015

http://www.takepart.com/feature/2015/09/04/conflict-free-minerals

http://www.ibtimes.com/congos-conflict-minerals-us-companies-struggle-trace-tantalum-tungsten-tin-gold-their-2102323

JENNIFER [email protected]

Lake Kivu, Bukavu, South Kivu, DRC

Peyser/RESOLVE


September 24-25

San Jose, CA


Dodd Frank and in-region reforms:

An update on impact

____________The Enough Project

“the exploitation and trade of

conflict minerals originating in

the Democratic Republic of the

Congo is helping to finance

conflict characterized by extreme

levels of violence…particularly

sexual violence, and contributing

to an emergency humanitarian

situation therein,”

The strategy…shall include:

(i)A plan to promote peace and

security in the Democratic Republic

of the Congo by supporting efforts

of the Government of the Democratic

Republic of the Congo, including

the Ministry of Mines and other

relevant agencies, adjoining

countries, and the international

community…”

Violence

• As of May 2014, 74% of 3T miners were working in mines where

no armed group involvement has been reported

• For the first time in history, Congo has a certification

scheme that distinguishes conflict-free mines from mines

with armed groups present

• As of June, 141 mines in Congo were validated conflict-free

• In some areas, minerals that do not go through the formal

system are sold for significantly less than verified

conflict-free minerals, reducing the financial incentives

for armed groups to control mining areas

• NEED: More work to secure and formalize gold-rich areas

Justine Bihamba,

activist, Goma,

eastern Congo

“10 years ago, we were under de facto control of armed

groups. Mining was almost fully-controlled by armed groups

some trading minerals with Rwanda. We hardly slept, death

could come at any time. The country was ungoverned.

“Today, let’s admit we are a long way from that. And if

we’re honest, that’s in part because of Dodd Frank – it

came to shine the light on those illicit actors. Today,

despite the problems with governance, you can feel more

government control.”

Artisanal Mining & Development

• Miners are forming cooperatives to better negotiate agreements with

companies and undergoing financial literacy trainings

• In a growing number of mining areas, better equipment and law

enforcement mean mining is safer, healthier, and more productive

• USAID has contributed over $5 million to help support the

formalization of artisanal mining; others are leading similar

efforts, including PAC and DDI

• NEED:

More buyers and investors for conflict-free sourcing initiatives

More support for alternative livelihoods

More communication between companies and local communities

Infrastructure development to help alternative industries succeed

Archbishop Francois Rusengo,

Archdiocese Justice

and Peace Commission,

Bukavu, eastern Congo

“We’re living on this territory that’s rife with

conflict. Armed men have been free to exploit

minerals. The formula for exploitation has been to

attack civilians.”

“Think of the mining industry in the US - processing

and export creates jobs there. My country is

exceedingly rich with natural resources. We too

should have processing, trading, exportation and

taxation.”

Children & Education

• In mines validated conflict-free, children and pregnant women are

no longer working in mine shafts

• In three surveyed mining territories, in towns where primary

education is free, school attendance has increased

• UNICEF and local organizations are developing programs to help

children transition from mines to school, or to safer livelihoods

• NEED: improve quality of education in mining areas – research

shows education has been devalued in minerals-rich territories

Daflores, Rubaya miner

“I first came to Rubaya to flee violence in

Rutshuru. But sometimes I had to flee again

because of war. Rebels and army militias

were fighting each other. Today, we are

sleeping deeply, there aren’t those problems

anymore.

I want my children to be teachers. I think

people go into mining for lack of other

better opportunities - that is not what I

want for my children. ”

-- Da Flores, Rubaya miner

Activism “We ask you to join us in

solidarity with our call for

ambitious, binding rules to

promote due diligence by

companies throughout supply

chains, concerning natural

resources sourced from high-

risk or conflict-affected

areas all over the world.”

- Archbishop Rusengo

Georges Nzabanita,

youth activist

Rutshuru, eastern Congo

“I understand that I must do something to advocate for

peace by uniting my experiences and knowledge with

organizations that believe in human rights.

“By combining the local, national, regional and

international effort for peace, we can prevent the

social and environmental crises caused by war, and make

the world a safer place to live for every person.”

-- Georges, youth activist, Rutchuru

Doctor Denis Mukwege,

Panzi Hospital, Bukavu

“Cleaning up the industry, on which tens of

thousands of legitimate miners in Congo

depend, is vital if there is any hope of

restoring peace…A conflict-free minerals

industry would greatly benefit the people of

Congo and contribute to ending the

unspeakable violence they have endured for

years. The legislative tools to help make

this a reality are available to

international policy makers, but they must

be enacted and enforced.”

-- Dr. Denis Mukwege


September 24-25

San Jose, CA


Responsible Sourcing in the Region – New Programs

by

Ambassador Ambeyi LigaboDirector, Democracy and Good Governance Programme

International Conference on the Great Lakes Region

San Jose, California, September 24, 2015

232

233

The African Great Lakes Region

234

http://icglr.org/index.php/en/the-pact

236

http://icglr.org/index.php/en/democracy-and-good-governance

238

The Six Tools of the RINR

Statistics on mineral resources in some MS

239

DRC: In 2013 (gold+3T+Diamond): USD446.7m

Rwanda: #2 foreign exchange earner (after tourism): USD137m in 2012.

In 2013: USD226m

Aim: USD400m by 2017

Tanzania: #1 foreign exchange earner: USD2,197.8m in 2012

In 2013: USD1,861.2m

ICGLR Certification Manual; accessible on: http://www.icglr.org/images/ICGLR%20Certification%20Manual%20Final%20Nov%202011En.pdf

ICGLR Appendices to Certification Manual; accessible on: http://www.icglr.org/images/ICGLR%20Appendices%20to%20Certification%20Manual%20FINALEN%20Nov%202011.pdf

240

http://www.icglr.org/images/ICGLR Certification Manual Final Nov 2011En.pdf

http://www.icglr.org/images/ICGLR Appendices to Certification Manual FINALEN Nov 2011.pdf

241

ICGLR Audit methodology/Template for the Third Party Exporters Audits of the ICGLR’s RCM; accessible on http://www.icglr.org/images/ICGLR%20Third%20Party%20Audit%20Methodology.pdf

http://www.icglr.org/images/ICGLR Third Party Audit Methodology.pdf


September 24-25

San Jose, CA


Annual Conference

San Diego, CA

September 2015

DRC Project Update

© The Better Sourcing Program – September 2015

• Bukavu office

• Capacity building

• Partnerships

• Stakeholder engagement

• Advisory Committee

• Better Sourcing Réseau

With support from

The Case for Responsible Engagement


• ASM contribution to local

livelihoods

• Keep conflict out of

minerals, for good

• Create incentives for

compliance, and

discourage smuggling

• Meet actual compliance

objectives

Upstream Due Diligence Shortfalls


• Curb fraud

• Maximise transparency

• Improve supply chain

circumstances

• Ensure that minerals are

not development-free

• Generate positive impact

Better Sourcing Commitment


• Operationalise the OECD

Guidance

• Traceability - utilizing

technology to provide reporting

in real time

• Active Due Diligence –

partnering with local NGOs to

provide ongoing monitoring

• Active and transparent reporting

of risks

• Communication, linkages, for

local investment

Improvement Objectives


• Working conditions

• Vulnerable groups

• Social impact

• Environmental impact

• Transparency

Materialised through Progress Criteria of the Better Sourcing Standard

Objective: Generate incentives

Over time Better Sourcing validation is conditioned by actions to support continuous supply chain improvement

Beyond Conflict-Free Validation

Better Sourcing validation systematically provides conflict-free assurance


Better Sourcing Label

BUYERS END-USERS INVESTORS

CM COMPLIANCE

TRANSPARENCYCONTINUOUS

IMPROVEMENT

SUSTAINABLE

IMPACT

ASSURANCE


Bridging the Communication Gap

UPSTREAM TRANSPARENCY TUNNEL

Brand &

ReputationComplianceLocal

Challenges

Guiding Downstream Involvement

UPSTREAM TRANSPARENCY TUNNEL

Brand &

ReputationComplianceLocal

Challenges

TECHNICAL EXPERTISE

INCENTIVES

Program Implementation


• Capacity building from

mine to export

• Reliable traceability

• Continuous presence at

mine sites

• Transparent reporting

• Third party auditing

Tagging Form

Tagging Form

A practical solution tailored to the specific challenges of each supply chain

Objective: Minimise costs and improve reliability


Upstream Data Collection

Traceability report can only be generated by authorised exporters

API to support traceability data upload by buyer/smelter prior to export: no reconciliation upon delivery

Objective: Restore confidence

Information Sharing & Reporting

Risk Management and Impact Measurement

Supporting the transition to professional monitoring and automated reporting

Objective: Transparent Communication

Opportunities to Engage


• Join the Better Sourcing

Réseau and access the

program information stream

• Provide technical expertise

and equipment to local

implementation agents

• Support positive impact

projects directly relevant to

your supply chains through

your CSR programs

• Come visit us

Contact: Benjamin Clair

Email: [email protected]

Website: www.bsp-assurance.com

Twitter: @BetterSourcing

Request a traceability system demonstration or additional

information on the Better Sourcing approach to due diligence and

mineral supply chain validation




September 24-25

San Jose, CA

Smelters and the Adoption of

Good Practices


Good PracticesCFSI Workshop

Jean-Paul Meutcheho

Director Corporate Sustainability, Global Advanced Metals

September 2015

Global Advanced Metals,

• About Global Advanced Metals

• Supply Chain Wide Compliance

• Supply Chain Visibility

• Considerations for Your Compliance Program

• Smelter as a Linkage to Global Trade

• Challenges and Solutions

Outline

Disclaimer: The information and opinions contained in this presentation are based on publicly available information and GAM information, estimates and opinion. Viewers and listeners should conduct their own independent investigation and analysis of the information provided in this presentation. GAM makes no representation or warranty as to the accuracy or completeness of this information and disclaims any liability relating to this presentation.


• Global Advanced Metals (GAM) is a leader in the exploration, mining, and processing of tantalum (Ta) metals

Fully integrated from mine to metal

Largest Ta mining reserves in the world (Australia)

Large capacity, industry leading processing facilities (USA and Japan)

• Serving electronics, aerospace, automotive, chemicals and other high technology industries for over 60 years

• Guaranteed source of ethically produced material

First processor of any metal declared “Conflict Free” (December 2010) under the CFSI (EICC/GeSI) protocol

About Global Advanced Metals


Supply Chain Compliance

• Supply chain wide approach to due diligence

• Critical role in the compliance scheme adopted by CFSI Industry promotedMulti-stakeholders

accepted• Smelters are typically not SEC

issues


• Know where your feedstock come from Across the globe including Central Africa

Industrial scale mines as well as artisanal and small scale mines (ASM)

• Know who are the actors involved in your supply chain Easily identifiable for industrial scale mines

Challenging for ASM, but there are tools in-region to support DD (iTSCi, ICGLR-RCM)

• Some of the underlying issues of Conflict Minerals regulation Working conditions in the supply chain and conflict

Transparency in the supply chain

Good corporate governance within the supply chain

Supply Chain Visibility:

“You are just as conflict-free as your supply chain”

Powder & WireCapacitor

ManufacturersDistributors

Contract

Manufacturers

OE

Manufacturers

Sub-Assemby

Manufacturers

Mining &

Trading


• Comply with the law and/or meet customers’ requirements SEC issuers

Supply chain participants of SEC issuers

• Comply with the law and do more: sustainability approach Meets the not-often stated intent of Dodd-

Frank: Business solution to “non-business” issues

Support of in-region due diligence initiatives: iTSCi, ICGLR-RCM, PPA and Solution-for-Hope…

• What is the next mineral/jurisdiction (EU)?

Different Compliance Approaches


• Dodd-Frank and the related SEC rules: What has to be done and how

• OECD Guidance: Platform on how to go about developing a compliance program

• iTSCi bag-and-tag, ICGLR-RCM: Upstream in-region tools for enabling conflict-free mining/trading of minerals

• CFS program: Tool to enable and promote processing of conflict-free material and support downstream due diligence

Considerations for Your Compliance Program


• Due diligence begets the legitimacy to play the linkage role

Serve as the conduit for moving in-region material to the global market

Validate the efforts of upstream supply chain participants

Support the RCOI efforts of your customers and other downstream actors

• Legitimate minerals trade and business solution to some of the underlying issues behind CM legislations

Conflict

Support the efforts of NGOs and governments

Smelter Linkage Between In-region Mining and

Global Trade


• Economic

Compliance is not without cost

Solution lies in valuing the efforts of compliant actors:

Customer’s pull

Rejection of compliance-by-avoidance

• Multiple regulations

Lurking risk of “diverging” compliance requirements

Solution:

Complementarity among regulations

Standard compliance tools/requirements

Challenges and Solutions

For More Information:Jean-Paul Meutcheho

Director of Sourcing and Corporate Sustainability

[email protected]




Good Practices

Metalor Group: The responsibleprecious metals company worldwide

Role of refiners in assuring conflict-free gold

Swissexcellence founded and

headquartered in

Switzerland

A unique know-how in the

refining, the management and

the transformation of precious

metals since 1852

A worldwidepresence in the US,

South America, Europe

and Asia with 32 sites

in 17 countries

3 business units Metalor Refining

Metalor Advanced Coatings

Metalor Electrotechnics

The largestmulti-site gold refiner in the world

Supplier of CoC gold to the electronicindustry

Compliant business practices:

Insuring conflict-free gold

RJC (Responsible Jewellery

Council)

Member of the UN Global Compact

Metalor cooperates with the OECD

Metalor is a founding member of

the

Swiss Better Gold Initiative

Supply chain due diligence policy

Finma’s (Swiss Financial

Market Supervisory Authority)

Precious Metals Control and

Money Laundering Acts

LBMA and LPPM referee

Metalor’s Green Gold and

Responsible Refining program

SEC (US Securities and

Exchange Commission)

Dodd-Frank

SCS - Responsible Recycled

Source Standard

Responsible Sourcing:

Critical at the Refiner level

where all traceability can

become lost

Compliant business practices:

Insuring conflict-free gold

World Gold Council

Fairmined

Achieving the RJC CoC

Do your homework before the audit (online

documentation)

Build a solid plan and map out the actions you will need

to achieve certification

Assembled a “Certification Team” consisting of people

who's skill sets contributed key components within the

standard

Ensure that your systems can track “Eligible Material”

from the source, though transport, manufacturing and so

on (SAP)

Have strong, clear work instructions … details are

important

Audit yourself first, then work together with the auditors

(they are not your adversary)

Challenges

Operate in all continents where we source primary

and secondary precious metals

Our range of mining customers go from large

corporation to artisanal miners

Staff Recruitment and Management + Training

Quality controls, certifications and advance IT

systems

Management Commitment

EHS

Beingproactive

For the last 3 years we have worked very closely with the

Colombian government in an effort to regulate artisanal

miners.

We participate in panels with Senators, Representatives,

Military, Ministry of Mining, ANDI and ACOMI which are

business organizations related to the precious metal

industry

The initiative combines the Swiss and Peruvian

governments, RJC, Fairmined, SECO, Metalor, and gold

consumers in Switzerland

Metalor works with the Swiss Better Gold Association

toward the formalization and improvement of the

Peruvian mining sector.

We achieved the first successful shipment of ethical gold

from Peru to Switzerland in October 15, 2013.

Otherissues besideconflict free materials

Money Laundering

Financing of Terrorism

Weekly monitoring customers behavior. Focus on

details per customer.

Have a comprehensive AML – Due Diligence

Program

MetalorGroup The

responsible precious

metals company

worldwide

Thank [email protected]




Good Practices

Sustainability as mining business approach

September, 24th 2015

Ranking of leading producers of refined tin, 2014 (tonnes of refined tin)

75,924

35,152

28,435

27,550

22,900

17,085

12,200

11,806

9,814

7,000

Yunnan Tin (China)

Malaysia Smelting Corp…

Minsur (Perú inc. Taboca)

PT Timah (Indonesia)

Yunnan Chengfeng…

Thaisarco (Tailandia)

Guangxi China Tin (China)

EM Vinto (Bolivia)

Metallo Chimique (Bélgica)

Gejiu Zi-Li (China)

Conflict Free Minerals

World ClassStandards

Generationof Social Value

SUSTINABLE

Conflict Free Minerals

Mine site ConcentratorPlant

Smelter Refinery Commercialization

We control the whole process

World ClassStandards

Efficient processes, cutting-edge technology and a high quality product

World-classenvironmentalmanagement

The safiest miningCompany in Peru

High level staff with commitmentand values

GeneratingSocial Value

Trusting relationships based on dialogue and transparency

Generation of economic resourcesand opportunitiesfor communities

Investing in sustainable developmentprograms: production, infrastructure, education, health

Welding thesystem

Sustainability as corporate DNA

Transparency and accountability

Shareholdersand Investors

Clients

Contractorsand Suppliers

Media

Communitiesaround ouroperations

Authorities / Peruvian

State

Environment

► Annual report► Conferences► Internal Audit

► Employee satisfactionranking

► Labor audits: SUNAFIL► Integruty Channel► HR certifiers: ABE► Health & Safety: OHSAS

18001, External audits(MEM) and Internalaudits (Safety Watchers)

► Conflict Free SmelterProgram

► Sustainability Report -GRI

► JORC code► ISO 9001

► Supplier audits► Standards for

suppliers registration

► Press releases► Press conferences► Mine visits► Reports

► Annual Report► Sustainability Report -

GRI► BASC Audit► Tables of dialogue► Audits from competent

authorities

► ISO 14001► Environmental audits:

OEFA, DIRESA, ALA► Participatory

environmental monitoring

► Sustainability Report -GRI

► Development committees► Environmental monitoring► Tables of dialogue and

information► News media► Mine visits

Workers

Smelter and Refinery

San Rafael mine

Pucamarca mine

7 John T. Ryan

awards

Badge of honor

Badge of honorWinner in

the Open PitMine

category

Seals and awards

Next challenges…

► B2 Tailings Mining Project

► Responsible Explorations

► Productive diversification: gold, copper

► Market differentiation: by quality and sustainability of products and services.

► To promote a global tin industry more sustainable

► It aligns and strengthens our accountability

► It adds value to Minur’s brand and to the mining sector

► It´s the basis of our differentiation market strategy

► Having kept the initiative over the years, it has made us leaders in CF.

Adv.

Advantages and challenges of the CFSP

► To establish new parameters and categories of CF, moving towards sustainability.

► This will add more value to the CF certification and to our clients.

Cha.

Mineríaperuana declasemundial

Thanks

For more information, visit us:www.minsur.comSusTINable

https://twitter.com/Minsur_Oficial

https://twitter.com/Minsur_Oficial

https://www.youtube.com/user/canalminsur

https://www.youtube.com/user/canalminsur

http://www.minsur.com/

https://www.youtube.com/watch?v=FI35FrodJjw

Risk Management for a Complex World:

Responsible Mineral Sourcing

Conflict Free Sourcing Initiative

09.24.15

THE DRAGONFLY INITIATIVE

MiningImpacts

3. Resolution

1. Consciousness -

Raising

2. Working-

Through

Media & Advocacy

Campaigns

Dominate

Regulatory and Private

Standards & Norms

Accepted

Struggle between

science, social interest

groups and business

Learning Phases

Phase 1: People become aware of an issue and decide if they care enough to engage with it; media

and advocacy campaigns drive and frame the issue

Phase 2: People attempt to understand the issue and look to legitimate voices to inform them

(NGOs, Science, politicians, business); there is a struggle: who to trust?

Phase 3: People work through their cognitive dissonance, figure out who to trust, science catches

up and leaders get clarity on where support lies and codify societal values into regulations.

Public Issues and the Learning Curve

3. Resolution

1. Consciousness -

Raising

2. Working-

ThroughHuman Rights

Conflict Minerals

Biodiversity and

Land Use

Learning Phases

Maturity of Public Issues in the

Minerals Supply Chain

SlaveryTax and

Disclosure

Reputation Risk Compliance Risk

Energy and

GHG

Corruption

Measurable

Development

Impact

+

Provenance/COC

MiningImpacts

Impacts & Best PracticeBiodiversity & Land Use

Madre de Dios Gold Rush, Peru

Formal ASM

Impacts & Best PracticeBiodiversity & Land

Impacts

Land Use Parks Overlap Biodiversity Alien Invasive

USA – 0.1%

Canada – 0.01%

Peru – 0.08%

Oz – 0.26%

Brazil – 20%

Mexico – 47%

• Fragmentation

• Conversion

• Species loss

• 1st Entrant

• Access routes

• Large scale movement of

equipment and people

Best Practice

Mitigation:

1. Avoid 2. Minimize

3. Replace 4. Offset

Conservation data

used in early

planning

‘No Go’ zones Conservation

practices: e.g.

set asides

Impacts & Best PracticeEnergy Consumption & Climate Change

• Generally, mines are the biggest GHG generator in metals value chain• ‘Comminution’ (size reduction) biggest energy consumer at mines• Related trends: Declining grades and increasing energy consumption

Impacts

Comminution energy consumption CO2 e (tonne GHG per tonne metal)

Global Mine

• ~3% of electricity • enough to power

Germany

45% (typical open pit)• Blasting – 3-5%• Crushing – 5-7% • Grinding – 90% (efficiency <1%)

• Iron & steel – 1.0 • Copper – 5.5• Aluminium – 9.8• Gold – 18,000-27,000

Best Practices

Accounting Sources Compensating Recycling

• Quantify CO2e• Direct/Indirect,

Onsite/Offsite• Reduction/efficiency

targets

• Replace diesel• Off-grid

renewables (hydro, biomass, solar)

• Carbon offsets• REDD+

(biodiversityconservation)

• Nearly all mined materials are recyclable

• Recycled aluminum: 95% less energy)

Ref slide:

Impacts & Best PracticeWaste and Pollution

Impact

Quantity Scale Failures

• 3,500 tailings ponds globally (est. 2000)

• More than 3 rock dumps per site

• Largest project footprint• Generally, tonnes of

extracted material ≡ tonnesof waste

• Major: 2-5 per year• Minor: 25 per year• 2000-2010 3 incidents released >

1m m3 of tailings• Residual chemicals (cyanide)

released

• Waste rock and tailings (processed material) impoundments greatest impact

Best Practice

Avoid Minimize Manage (standards) Closure

• Underground• High grade

extraction

• Reduce at source• Backfill• Re-use

• Engineering specs for problem wastes

• Treatment of hazardous wastes

• Progressive closure of facilities

• Legacy sites

Impacts

Security Indigenous Peoples Rights

• Private armed forces• Public armed forces• Corruption• Control• Organized crime

• 5% of world’s population• 1/3rd of extreme rural poor• 20% of land surface• 80% of important biodiversity• 300 companies exposed to Indigenous Peoples

rights

Impacts & Best PracticesHuman Rights

Best Practice

Security Indigenous Peoples Rights

• VP SHR• Reasonable Force• Unarmed• Hearts and Minds v.

Border Fence

Free Prior Informed Consent (FPIC):• A right: to withhold consent• A combination of processes and outcomes• Establishment of enabling conditions• Consent sought at at all stages • A continual process: Living Consent• Required: UNPFII, UNDRIP, ILO169, CBD, UNFCCC,

UN-REDD, CCBA, REDD+ SES, IFC PS

Region / Country Children in ASM

Ghana 10,000 children

Andes (Bolivia, Ecuador, Peru) 65,000 children

Mongolia 20% of rural workforce - majority children Majority girls

Tanzania 20% of rural workforce - majority children As young as 5

Sabel (Niger, Burkina) 50% of workforce / 250,000 children 70% under 15

Impacts & Best Practice

Child Labour in ASM

Impacts and Best PracticeGovernance

• World Governance Indicators v. Resource Curse:

– Low and Lower-middle income countries lower than world average

– Contrary to resource curse theory, very little difference between mining and non-mining countries

• (V) Voice & accountability;• (S) Political stability;• (E) Government effectiveness;• (R) Regulatory quality;• (L) Rule of law;• (C) Control of corruption.

2010 V S E R L C

Lower Income Mining 2 1.9 1.7 1.9 1.7 1.8

Lower Income Non-Mining 1.7 1.7 1.8 1.9 1.7 1.8

World Average 2.5 2.5 2.5 2.5 2.5 2.5

Best Practice

• Quality of government institutions is critical

• Publish What You Pay, EITI and Dodd Frank

• Zero Tolerance

• Business Integrity Controls: KYC

• Provenance and transparency

Standards & Supply Chains

• What standards should supply chain managers require for minerals and metals

sourcing?

• Process:

• Discover the baseline of commonly used standard/certification systems

• 50+ standards commonly used in industry

• Not including national/provincial regs & legs.

• Identify the (24) material issues

• Reputation and brand protection

• Environmental and Social Risk mitigation

• Development impact and brand enhancement

• Identify the ‘broadly accepted requirement/best practice’ for (24)

material issues

The Industry Best Practice

• Assess and compare for ‘miss’, ‘meet’, or ‘exceed’

Number of benchmarks missed, met, exceeded and not applicableMining and Metal Supply Chain Standards

Standards as Due Diligence Tools

Responsible Mineral Sourcing

Conflict Free Sourcing Initiative

09.24.15



September 24-25

San Jose, CA


GOLD TO BE PROUD OF

©Ronald De Hommel

L i n a V i l l aE x e c u t i v e D i r e c t o r

A l l i a n c e f o r R e s p o n s i b l e M i n i n g

10-15 million miners

100 million depend on it indirectly

15-20% of newly mined gold/year.

Roughly 1-3% from conflict or high risk areas

Widespread informality

Artisanal and small scale mining encompasses a wide range of mining realities on the ground.

R i s k s a re i n h e re n t t o m i n e ra l ex t ra c t i o n . W h e n t h e s e r i s k m a t e r i a l i ze t h e re a re n e ga t i ve s o c i a l ,

e nv i ro n m e nt a l a n d e c o n o m i c i m p a c t s .

LSM Sustainability Issues(Robeco SAM / EY)

• Conflict related issues• Productivity and efficiency• Social License / Community • Governance & Transparency• Climate Strategy• Labor & Human Rights• Nationalization of resources

ASM Sustainability Issues(ARM et all)

• Conflict related issues• Legal access to mineral rights. • Irresponsible use of Mercury• Child + forced labor + HHRR.• Adopting business visions. • Destruction of key ecosystems.• Access to finance.

F a i r m i n e d i s a s t a n d a r d a n d a t h i r d p a r t y c e r t i f i c a t i o n s y s t e m f o c u s e d o n i n c e n t i v i z i n g r e s p o n s i b l e m i n i n g p r a c t i c e s i n t h e

a r t i s a n a l a n d s m a l l s c a l e m i n i n g s e c t o r.

Fairmined Standards set a high bar for the sector,; miners must make significant effort and investments to comply to them.9 mines certified to date in Colombia, Peru, Bolivia and Mongolia producing approx. 0.5 tons.Over 25 mines in Colombia, Bolivia, Peru, Ghana, Burkina Faso, Senegal and Mali are aiming to get certified.

3 WA Y S T O S O U R C E F A I R M I N E D G O L D

WITH FLEXIBLE MODELS FOR THE ENTIRE INDUSTRY

0201FAIRMINED

LABELED

For anyone interested in labeling or making

claims on finished consumer products. Full

traceability throughout the supply chain.

03FAIRMINED

CERTIFICATES

For anyone looking to support

empowered responsible mining

communities, this can be done by

buying Fairmined Certificates.

FAIRMINED

INCORPORATED

For anyone wanting to incorporate

Fairmined gold into their supply chain.

Traceability rules apply until refiner facility.

Traceability in Fairmined Incorporated model

Full physical and documental traceability

FM certified mines

Internal Control System

Annual physical audit

FM authorized refiners

Flow of Goods reporting

Physical audit

Flow of goods is reported and verified in Ecert, a specialized certification and traceability data-base

Mass balanceDocumental traceability

Components Manufacturers

Flow of Goods reporting

Documental remote audit

Mass balanceDocumental traceability

Electronic brands

Reporting FM purchases

Documental remote audit

M o s t o f a r t i s a n a l a n d s m a l l s c a l e g o l d m i n e r s a r e n o t r e a d y t o c o m p l y t o F a i r m i n e d . T h e r e i s a n e e d o f a m o r e a c c e s s i b l e c e r t i f i c a t i o n t h a t c a n h e l p u s b r i n g m o r e g o l d f r o m a r t i s a n a l a n d s m a l l s c a l e m i n e s i n t o l e g a l s u p p l y c h a i n a n d r e s p o n d t o c o n f l i c t r e l a t e d c o n c e r n s .

Fairmined

Entry Standard

Other instruments

At a stage of securing funding for implementation:

• Open to all countries.• Implementing tool for OECD compliance.• Most essential requirements defining an

acceptable form of ASM.- mining rights

- financing of conflict

- forced and child labor

- environmental hazardous (mercury)

- Traceability

• Engaging with ASM at the earliest possible stage• Plans to pilot in Colombia through CAPAZ

(ARM/Resolve/downstream companies)• Open to exploring other piloting countries.

N o s i n g l e a c t o r o r i n d u st r y c a n a d d re s s a l l t h e c h a l l e n ge s i n a r t i s a n a l a n d s m a l l s c a l e g o l d m i n i n g

s e c t o r, b u t w e a l l b e n e f i t f r o m d e - r i s k i n g g o l d s u p p l y c h a i n s g l o b a l l y.

F a i r m i n e d a n d t h e E n t r y S t a n d a r d a r e t w o c o n c r e t e i n s t r u m e n t s t h a t c o n t r i b u t e t o

t r a n s f o r m i n g t h e s e c t o r .

W e a r e a l r e a d y e n g a g i n g w i t h t h e j e w e l r y i n d u s t r y a n d r e a d y t o e n g a g e p r o a c t i v e l y w i t h t h e

e l e c t r o n i c s i n d u s t r y t o s u p p o r t y o u r c o l l e c t i v e a n d i n d i v i d u a l s t r a t e g i e s .


September 24-25

San Jose, CA


323

Global data and tools to support

due diligence and risk assessment

323

Dr James Allan, Associate Director

324

• Dodd-Frank Act

• Upcoming EU Conflict Minerals Regulations are broader

than Dodd-Frank

• Could affect 880,000 companies – importers of

minerals and products containing minerals

• Creates compliance obligations across sectors e.g.

Electronics, auto, energy, food, aerospace,

consumer goods etc.

• Does not define conflict-afflicted or high risk areas

so companies will need to identify these and

continually monitor for changes

• NGOs calling for additional materials to be included

in the future e.g. diamonds, jade and coal

Expanding regulatory requirements for business

325

Are the proposed EU regulations a cause for concern?

• High costs and limited effectiveness?

• Companies spent $709m and six million staff hours to comply with

rules to disclose conflict minerals in their supply chains

• 90% of the 1,262 companies that filed conflict minerals reports

with the SEC couldn’t determine whether their products were

conflict free1

• Kimberley Process still problematic after more than a decade of

implementation – traceability, narrow scope and controversial

definitions of conflict

• Litigation over discrepancies in public reporting on supply chains:

• August 2015, Costco faces class action lawsuit over claim it

misled consumers about use of slave labour and human

trafficking in its supply chain for frozen shrimp – lawsuits

reference California Transparency in Supply Chains Act

1Tulane University and Assent Compliance,

2014

326

To succeed in emerging markets

companies must understand political,

economic, social and environmental

risks.

Measuring and communicating these risks is

essential for risk assessment and formulating

mitigation strategies.

Adopting a holistic approach to risk, that

encompasses global data and analysis from the four

key streams of political, economic, social and

environmental risk, allows us to see how the issues

driving real world events are not coincidental, but the

result of a highly complex interplay of mutually re-

enforcing factors.

Isolating the drivers of risk can help companies

identify emerging issues that can impact the viability

of operations, investments, assets and supply chains.

The confluence of four integrated risk work-streams

327

• Quantifiable

• Comparable

• Trend analysis

• Root causes and drivers

• Interactive maps

• Visualisations

• Holistic solutions

Up to 8 years data for 200 risks enables the

identification and comparison of the trajectories

of risk across 198 countries.

Verisk Maplecroft’s extensive portfolio of indices and maps can be also

accessed through seven thematic Risk Atlases, which aggregate key

issues and analysis for up to 198 countries and include scorecards for

each country.

Clients benefit from transparency of sources and proprietary

methodologies developed by in-house experts.

Index methodologies are rigorously peer reviewed in-house and

through external agencies, such as the UN, as well as via client input.

Quantifying non-financial risk: Indices and Atlases

328

Measuring national and sub-national risk across a range

of issues

Dynamic Political RiskLegal and Regulatory

EnvironmentHuman Rights Risk Climate Change and Environment

Governance Framework Rule of Law Complicity and Rule of Law Climate Change Vulnerability

Regime Stability Judicial Independence Human Security Emissions and Energy Use

Political Violence Corruption Risk Labour Rights and Protection Ecosystems Services

Terrorism Corporate Governance Civil and Political Rights Water Stress

Business and Macroeconomic Risk Regulatory Framework Access to Remedy Food Security

Resource Nationalism Respect for Property Rights Right to Protest Environmental Regulations

Structural Political Risk Growth Environment Social Natural Hazards Risk

Complicity with Oppressive

RegimesInvestment and FDI Poverty and Human Development

Natural Hazard Economic

Exposure

Democratic GovernanceTrade and Capital Flow

OpennessDigital Inclusion Socio-economic Resilience

Supply Chain Complicity Risk Macroeconomic Stability Education Hydro-meteorological Risks

Economic Diversification Working-Age Population Capacity to Contain Infection Geophysical Risks

Resource Security Middle-Class Growth Health and Safety Seismic Risk

Infrastructure Readiness Human Capital Transport and Communications Tsunami Risk

329

• Global monitoring and alerts for

operational and supply chain

disruptions via a subnational

mapping and data platform.

• Includes all reported terrorism and

piracy incidents, corporate

security and human rights events.

• Clients can input their company

locations and set up alerts based

on our near real-time tracking of

events

• Assess risks over time to chart

security trends and locate against

your own assets and personnel

Monitoring and alerts on events in near-real time

330

OECD five-step framework for risk-based

due diligence in the mineral supply chain

1. Establish clear company management

systems

2. Identify and assess risk in the supply

chain

3. Design and implement a strategy to

respond to identified risks

4. Carry out independent third-party audit of

supply chain due diligence at identified

points

5. Report on supply chain due diligence

331

Assess risks in the supply chain – identifying conflict

afflicted areas

• Conflict-affected and high-risk areas‘: those in a

state of armed conflict, with widespread violence,

the collapse of civil infrastructure, fragile post-

conflict areas and areas of weak or non-existent

governance and security, characterised by

"widespread and systematic violations of human

rights"

• Armed conflict can take a variety of forms: inter-

state, revolutions, insurgencies, civil wars

• Dodd-Frank identifies those regions where

companies need to focus – DRC and neighbours

• Draft EU conflict minerals regulations don’t identify

specific geographies – need to identify and

continually monitor conflict afflicted regions

332

Global distribution of major tin, tantalum, tungsten and

gold resources

333

Identifying conflict-afflicted regions using the Conflict

and Political Violence Risk Index

334

Tin Tantalum Tungsten Gold

China Rwanda China China

Indonesia DR Congo Russia Russia

Peru Brazil Canada Australia

Bolivia Mozambique Vietnam USA

Brazil China Bolivia Peru

Myanmar Nigeria Austria South Africa

Australia Ethiopia DR Congo Canada

Vietnam Burundi Portugal Mexico

Malaysia Rwanda Indonesia

DR Congo Australia Ghana

Identifying conflict-afflicted regions using the Conflict

and Political Violence Risk Index

335

Terrorism risk monitoring – Q3 2015

336

Myanmar – competition for control of natural resources

has driven territorial disputes and violence in border

regions• Many areas dominated by ethnic

minority groups are rich in natural

resources, or are situated along

lucrative trade routes to China, India

and Thailand.

• Armed groups have exploited these

resources, developing lucrative

interests in the smuggling of timber,

jade and other minerals, and drugs

such as opium

• The government is trying to sign a

peace agreement with 16 rebel

groups ahead of November elections

337

Colombia – ongoing guerrilla activity and state security

force violations

• Security conditions significantly improved

since 2002

• The country’s two major guerrilla

organisations, the Revolutionary Armed

Forces of Colombia (FARC) and the

National Liberation Army (ELN), remain

active in 25 of 32 departments

• Between July 2014 and July 2015 militant

groups carried out 795 attacks in the

country

• Gold, tungsten, tantalum and coal reported

to fund violent armed groups

338

Identifying high risk areas with human rights violations

339

Delivering evidence through tools, reports and

customised dashboards

340

Human rights and business dilemmas forum

www.hrbdf.org

341

Thank you


September 24-25

San Jose, CA


When Risk Goes Global, What do We Do?

Responsible Mineral SourcingConflict Free Sourcing Initiative

09.24.15


1. Commodities and Responsible Sourcing

Mining Your Smart Phone

Batteries

Rare Earth Minerals

• Less than 1% of rare earths are recycled

• 90% are mined in China

2. Geographical Shifts in Material Sources

Country Risk/Governance EUFLEGT (Forest Law Enforcement, Governance and Trade programme)

http://www.euflegt.efi.int/portal/

Country Risk / GovernanceNatural Resource Governance Institute

Resource Governance Indexhttp://www.resourcegovernance.org/rgi/countries

Company Risk / Ethics Revenue Watch Institute Resource Governance Indexhttp://www.revenuewatch.org/rwindex2010/index.html

Country Risk/Conflict UN UN Peacekeeping http://www.un.org/en/peacekeeping/

Country Risk/Conflict US State Dept. US State Dept. HIU https://hiu.state.gov/Pages/Home.aspx

Country Risk/Conflict Heidelberg InstituteHeidelberg Institute Conflict Barometer

http://www.hiik.de/en/

Country Risk/Conflict US State Dept. US State Dept. TFS http://www.state.gov/e/eb/tfs/tfc/minerals/

Country Risk / Governance Global Advise Network Business Anti-Corruption Portal http://www.business-anti-corruption.com/

Country Risk/Conflict Uppsala University Uppsala Conflict Data http://www.pcr.uu.se/research/UCDP/

Country Risk / Governance World Bank Doing Business Index http://www.doingbusiness.org/rankings

Country Risk / GovernanceTransparency International

Corruption Perceptions Index http://www.transparency.org/research

Country Risk/Conflict International Alert Country research http://www.international-alert.org/

Country Risk/ConflictInternational Crisis Group

Country Profiles http://www.crisisgroup.org/

Country Risk / GovernanceTransparency International

Open Budget Index http://www.transparency.org/research

Country Risk / GovernanceEconomist Intelligence Unit

Instability Indexhttp://viewswire.eiu.com/site_info.asp?info_name=social_unrest_table&page=noads&rf=0

Country Risk / Governance Fund for Peace Failed State Indexhttp://ffp.statesindex.org/rankings-2013-sortable

Country Risk / Governance OECDThe OECD Anti-Bribery Convention, 2009

http://www.oecd.org/daf/anti-bribery/antibriberyconventionratification.pdf

Country Risk / Governance FATF FATF or asociated initiatives

Country Risk / Governance UNUN Convention Against Corruption, 2005

http://www.unodc.org/unodc/en/treaties/CAC/signatories.html

Country Risk / Governance EITI EITI Membership http://eiti.org

COUNTRY RISK RANKINGS TOOLProject Management Information Notes

COUNTRY: DRC

Date of report: June 21st 2015

Manager: Assheton Stewart Carter TDIName of portfolio company / project TFM

Country Risk Rankings

Author & Index Score NotesTransparency International Corruption Perceptions Index:

29/100; rank: 126/129 The country is perceived by its citizens to be highly corrupt

Transparency International Open Budget Index: 11The country's budget is openness is judged to be 'scant' or'none'

Economist Intelligence Unit Instability Index 6.8 High Risk, improving.

UN Peacekeeping n/a TBC

World Bank Doing Business Index 104thDistance to Frontier 60.6 % points (best performer[Singapore]=92.2%). The DRC is a difficult country to start abusiness and protect an investment.

Fund for Peace Failed States Index 78.3; 75/178 TBC

GAN Business Anti-Corruption Portal no information available

Heidelberg Institute Conflict Barometer Armed Conflict TBC

Colombia/Yale Environmental Performance Index rank: 97/178; score: 48.8/100 76.69 best performer - 25.32 worst performer

Uppsala Conflict No armed conflictNo armed conflict in xxx since 1975. Violence is associatedwith organized gangs and leads to 'one sided violence'.

EU FLEGT n/a

International Alert No information available

International Crisis Group No information available

UN Convention Against Corruption, 2005 Yes

OECD Anti Bribery Convention, 2009 Yes

US State conflict minerals Yes The DRC is a conflict-mineral country

FATF n/a

EITI Yes TBC

CONCLUSION HIGH COUNTRY RISK - CONFLICT COUNTRY

http://www.euflegt.efi.int/portal/

http://www.revenuewatch.org/rwindex2010/index.html

http://www.business-anti-corruption.com/

http://www.doingbusiness.org/rankings

http://www.transparency.org/research

http://www.international-alert.org/

http://www.transparency.org/research

http://viewswire.eiu.com/site_info.asp?info_name=social_unrest_table&page=noads&rf=0

http://ffp.statesindex.org/rankings-2013-sortable

http://www.unodc.org/unodc/en/treaties/CAC/signatories.html

http://eiti.org/

3. Resolution

1. Consciousness -

Raising

2. Working-

Through

Media & Advocacy

Campaigns

Dominate

Regulatory and Private

Standards & Norms

Accepted

Struggle between

science, social interest

groups and business

Learning Phases

Phase 1: People become aware of an issue and decide if they care enough to engage with it; media

and advocacy campaigns drive and frame the issue

Phase 2: People attempt to understand the issue and look to legitimate voices to inform them

(NGOs, Science, politicians, business); there is a struggle: who to trust?

Phase 3: People work through their cognitive dissonance, figure out who to trust, science catches

up and leaders get clarity on where support lies and codify societal values into regulations.

Public Issues and the Learning Curve

3. (Non-Financial) Issues Expansion

3. Resolution

1. Consciousness -

Raising

2. Working-

ThroughHuman Rights

Conflict Minerals

Biodiversity and

Land Use

Learning Phases

Maturity of Public Issues in the

Minerals Supply Chain

SlaveryTax and

Disclosure

Reputation Risk Compliance Risk

Energy and

GHG

Corruption

Measurable

Development

Impact

+

Provenance/COC

How Does Mining Contribute to Development?

Last 2 decades focused

on addressing the

adverse effects of mining

Next 2 decades should focus

on enhancing the positive

impact of mining

4.Funding Responsible Minerals Supply

The mining finance cycle + The commodities cycle= Divestment & Under-investment

Squeeze in supply of ‘assured’ clean, green and responsible minerals


September 24-25

San Jose, CA
