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A global initiative to end support to conflict through mineral production and trade

July 2017

Maréchal, L. A global initiative to end support to conflict through mineral production and trade. GREAT Insights Magazine, Volume 6, Issue 3. July/August 2017.

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The OECD, together with other international and regional organisations, the global private sector and civil society, has developed a programme to support companies to increase transparency and integrity and address risks in their mineral supply chains.

Since the 1990s, natural resources have been associated with the financing of non-state armed groups or public security forces and the perpetration of serious abuses of human rights. While companies involved in the mining and trade of minerals have the potential to generate income and foster local development, they are also at risk of contributing to or being associated with significant adverse impacts. This is particularly the case in areas of the world that are impacted by conflict situations or characterised by high levels of risk.

The OECD’s work on responsible mineral supply chains began in 2009, as part of a broader ambition and agenda to support the global implementation of the recommendations of the OECD Guidelines on Multinational Enterprises – the most comprehensive set of government-backed recommendations on responsible business conduct in existence today. The G8 and International Conference of the Great Lakes Region (ICGLR) called on the OECD to help develop a framework to enable the responsible sourcing of minerals from conflict-affected and high-risk areas. This ultimately led to the development of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (hereafter “Guidance”).

The Guidance was developed with the input of OECD member states and non-member states (in addition to countries from Africa’s Great Lakes region, representatives from Brazil, South Africa and Malaysia were involved); the private sector; international organisations and representatives from civil society. The Guidance seeks to clarify how companies can identify and manage risks along the mineral supply chain, from miners to the manufacturing and brand-name companies that use these minerals in their products.

In addition to the 35 OECD Members, 8 non-Members, namely Argentina, Brazil, Colombia, Costa Rica, Lithuania, Morocco, Peru and Romania, adhered to the OECD Council Recommendation and as such, have committed to actively promote the observance of the Guidance by companies operating in or from their territories and sourcing minerals from conflict-affected or high-risk areas.

More specifically, the Guidance aims to help companies respect human rights, observe applicable rules of international humanitarian law in situations of armed conflict, and avoid contributing to conflict. It thereby helps companies contribute to sustainable development and source responsibly from conflict-affected and high-risk areas. In fact, one of the core objectives of the Guidance, which recognises the value of business investment, is ultimately to promote responsible private sector engagement in post-conflict and fragile states.


From US-based multinationals to local mineral trading houses in Africa: the Guidance applies to all companies in the supply chain, globally


Since its adoption in May 2011, the Guidance has become the leading industry standard for companies to meet the expectations of the international community, regulators, customers and consumers on mineral supply chain transparency and integrity.

Industry is the main implementer of the recommendations of the Guidance as the framework for risk-based due diligence in the minerals supply chain is designed for companies. Multiple initiatives have been developed to assist companies in undertaking due diligence along the supply chain, for instance to help them establish traceability or chain of custody systems, as well as to identify, assess, and efficiently manage risks. Pursuant to the recommendations of the Guidance, industry groups and market associations have developed sector programmes to operationalise the Guidance and help their members implement Step 4 of the Guidance independent third party audits at specific critical points of the supply chain (refining and smelting stages for the 3TG sectors – tin, tantalum, tungsten and gold). To gauge the alignment, coherence and credibility of these initiatives, the OECD is currently carrying out an assessment of the alignment of industry programmes’ standards and implementation efforts with the OECD Guidance.

Since 2010, eight UN Security Council Resolutions adopted in the context of the DRC, Côte d’Ivoire and Sudan called for due diligence in mineral supply chains based on the OECD Guidance to avoid financing illegal armed groups. The Guidance has thus been accepted globally as a key tool to help implement natural resource related sanctions and combat financing of conflict.

The Guidance remains a voluntary standard but it is referenced in regulations in the United States (US Dodd Frank Act), and serves as the basis for the recently adopted EU Regulation laying down supply chain due diligence obligations for Union importers of 3TG originating from conflict-affected and high-risk areas. It is also part of the legal framework in the Democratic Republic of the Congo (DRC), Burundi and Rwanda. Together with China’s Chamber of Commerce for Metals and the Ministry of Commerce, the OECD supported the development of the Chinese Due Diligence Guidelines for Responsible Mineral Supply Chains to implement responsible mineral sourcing and due diligence in conformity with the OECD Guidance. The government of the People’s Republic of China is also developing regulation on imports of tin, tantalum and tungsten and has been using the OECD Guidance as a basis.


The Guidance aims to increase international market access for responsible artisanal and small-scale mining production


One of the main goals of the Guidance and its implementation programme is to ensure that international standards do not further marginalise workers of the informal sector. The Guidance includes an Appendix on “Suggested measures to create economic and development opportunities for artisanal and small-scale miners” calling on all stakeholders to engage in the legalisation and formalisation of artisanal mines and miners as these communities are particularly vulnerable to serious abuses and impacts associated with mining. The objective is two-fold:

  • to build secure, transparent and verifiable supply chains from mine to market and enable due diligence for legitimate artisanal and small-scale mining; and
  • to ensure that legitimate artisanal mining communities can benefit from ongoing trade in conflict-affected and high-risk areas, to support their development and thus contribute to the general improvement of the situation on the ground.

To further develop its support to the global artisanal and small-scale mining (ASM) formalisation agenda, the OECD is working with the World Bank, to combine efforts to develop a sustainable ASM sector. For the first time, in May 2017, a dedicated consultation was organised with the World Bank to explore with relevant stakeholders and the donor community options for establishing a global ASM platform to foster collaboration, coordination and mutual support in advancing the ASM rationalisation and formalisation agenda. This initial consultation, which took place back-to-back with the 11th Forum on Responsible Supply Chains of Minerals, will be followed by in-region discussions in the course of 2017 and early 2018.


A standard applicable to all mineral resources, from mica to oil and gas


The recommendations of the Guidance are applicable to all mineral resources. The initial focus on 3TG was a consequence of the specific characteristics of illegal exploitation of these resources that supported and still supports state and non-state armed groups in the African Great Lakes region, as reported by several United Nations Group of Experts.

However, in recent years, the OECD has received numerous calls from its member states as well as from civil society organisations and private sector to support the implementation of the Guidance in mineral supply chains beyond 3TG. This has led to increased interactions with industry-led initiatives looking at responsible sourcing in the cobalt, coal, precious stones and mica. While there are no plans to develop detailed recommendations for each mineral supply chain, there is recognition that there is merit in creating some tool to help companies understand how to evaluate the risks in additional supply chains. This has led to the development of a specific project by the OECD Secretariat, called the Handbook on risks associated with production and trade of natural resources, which will provide users with a compilation of credible source of information on risks in the natural resources supply chains. The Handbook will help companies get started on due diligence by helping them understand the risks associated with different supply chains in order to prioritise due diligence activities. The Handbook should be operational in 2018 and should provide information on:

  • up to 30 different mineral supply chains (covering industrial minerals, base metals, and energy raw materials including oil and gas);
  • risks identified in Annex II of the Guidance at a country level (namely, risks of: direct and indirect support to non-state armed groups; direct and indirect support to private and public security forces; serious abuses of human rights; bribery and fraudulent misrepresentation of the origin of minerals; money laundering; and non-payment of taxes, fees and royalties due to government);
  • allegations of wrongdoing reported to be connected to the production and trade of the mineral resources covered in the Handbook.

The system is only as strong as its weakest link…


The first years of implementation of the Guidance have demonstrated a considerable level of commitment by many stakeholders, some of which have even gone beyond the expectations put forward in the Guidance. However, a lot remains to be done. The system is as strong as its weakest link. Gaps still exist in terms of uptake of the Guidance in mineral supply chains beyond 3TG, in reporting by companies on their due diligence actions, and indeed on states’ role in creating the enabling environment for due diligence.

The OECD Secretariat and its partners, ranging from governments to local civil society organisations and of course companies from all around the world, will therefore strive in future years to assist all stakeholders engaged in the promotion of responsible business conduct in all mineral supply chains. This will entail various types of activities and projects, ranging from technical support to European institutions to support the rolling out of the EU regulation, to the development tools for companies to mitigate risks in their supply chains such as the Practical Actions for the Worst Forms of Child Labour, and the development of a methodology to measure the impact of due diligence actions on the ground in mining communities.


About the author

Louis Maréchal works on projects focused on the extractives sector and on the implementation of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, at the Responsible Business Conduct Unit of the Organisation for Economic Co-operation and Development (OECD).


Photo: Artisanal mining. Digging for copper, DR Congo. Credits: Fairphone via Flickr.


This article was published in GREAT Insights Volume 6, Issue 3 (July/August 2017).

Economic Transformation and TradeExtractive SectorsMining

External authors

Louis Maréchal