Digging for Disclosure
Publisher: Global Witness
Date: 2021
Topics: Extractive Resources, Governance, Land
Countries: China
Metals supply chains bring minerals and metals from producer countries to manufacturing and trading hubs across the globe, providing the materials for an immense array of final consumer products from cell phones, camera lenses to computers. These supply chains carry risk.
Human rights, corruption and environmental risks are part and parcel of the extraction, transport and trade of minerals, particularly when sourced from so-called conflict-affected and high-risk areas. With these risks comes the responsibility of companies all along the supply chain to put in place effective measures to ensure they are not contributing to, or profiting from, serious harm to individuals, society or the environment.
International guidance by the Organisation for Economic Cooperation and Development (OECD) on conducting Due Diligence for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance) provides a detailed five step framework for companies to follow. Smelters and refiners, which process minerals, are identified as the control point in mineral and metal supply chains as they are well-positioned to have a significant overview of and influence over the upstream supply chain (i.e. the supply chain from the mine to the refiner or smelter, which may include artisanal, small and large-scale miners, local traders, exporters, international concentrate traders and mineral processors).
They are well-positioned to collect and make public essential information about the risks and risk mitigation activities associated with their upstream supply chains. The ability to access and scrutinise this information is of critical importance for downstream companies (companies in the supply chain from refiner/smelter to the end product, for example metal traders and exchanges, component manufacturers, product manufacturers, original equipment manufacturers, and retailers) in fulfilling their own responsible sourcing obligations.