High Risk Sourcing

Description

High Risk Sourcing.

• HRS-1: Has the facility collected evidence of chain of custody or traceability for each transaction of high-risk material, including: a) All locations of extraction, trade, handling, and export of minerals b) Documented chain of custody or traceability between the mine site and the facility for high-risk materials c) The transportation route and means of transportation for high-risk materials d) A process to ensure the integrity of the shipment, with due regard for security concerns
• HRS-2: Does the facility have a process to develop a full supply chain map with the identity, activity, and location of each actor in the supply chain?
• HRS-2a: Is the map available for review?
• HRS-3: GOLD AND PRECIOUS METALS ONLY: If the facility sources or processes secondary materials, does it collect additional information from red-flagged supply chains, including through on-site visits to secondary material suppliers using a risk-based approach with priority given to persons, places, and transactions that present higher risk.
• HRS-4: GOLD AND PRECIOUS METALS ONLY: If the facility sources or processes secondary materials, does it collect additional information on those transactions requiring enhanced scrutiny, including: a) Whether there are manufacturing facilities where scrap may be generated b) The reasonable approximate level of business being done in recyclable scrap precious and platinum group metals
• HRS-5: GOLD ONLY: Does the Facility conduct an in-depth review of red-flagged locations and the due diligence practices of red-flagged suppliers, including: a) Reviewing research reports from governments, international organizations, NGOs, media, UN reports, and other relevant sources related to mineral extraction impacts? b) Consulting with local and central governments, civil society, community networks, UN peacekeeping units, and local suppliers, and responding to specific requests from cooperating facilities? c) Assessing whether upstream suppliers comply with OECD Guidance?
• HRS-6: Has the facility identified the relationships of all significant upstream actors in the supply chain, including their business, government, political, or military affiliations, specifically for companies and officers operating within CAHRAs? Note: For 3T, all significant upstream actors covers immediate suppliers and in-country exporters only. For others, all significant upstream actors covers all upstream actors.
• HRS-7: New Question - GOLD ONLY: Does the facility conduct Know Your Counterparty (KYC) processes for all third-party service providers involved in handling gold (e.g., logistics, processors, and transportation companies) or providing security at mine sites and along transportation routes?
• HRS-8: Does the facility's Know Your Counterparty (KYC) process meet other requirements of the respective standard? (Note there may be different requirements for different minerals based on the standard(s) in scope of the assessment.
• HRS-8a: In addition to immediate suppliers, which other suppliers were included in the KYC process for high-risk sources?
• HRS-9: Is the KYC process consistently implemented? (Note: demonstrate through review of actual KYC for high-risk supply chains)
• HRS-10: Does the facility have a process to collect up-to-date information to understand the context of red-flagged locations in its supply chain?
• HRS-11: Does the facility have a process to generate, collect, and retain detailed qualitative information on the conditions of extraction, trade, handling, and export of minerals?
• HRS-12: Does the facility adequately collect qualitative information relevant to supply chain risks, as defined by Annex II of the OECD Guidance and applicable standards, including: a) Presence and/or involvement of armed groups b) Occurrence of serious human rights abuses c) Occurrence of the worst forms of child labor d) Occurrence of forced labor e) Presence and role of public or private security forces f) Occurrence of bribery, money laundering, or non-payment of taxes, fees, and royalties g) Occurrence of other supply chain risks defined by the applicable standard
• HRS-12a: New Question - Describe the processes and methods the facility uses to collect information on supply chain risks beyond those defined in Annex II of the OECD Due Diligence Guidance or the applicable standard? Specifically, how does the facility identify, assess, and manage additional risks that it has defined, such as environmental, social, or governance risks?
• HRS-13: Does the facility adequately collect other qualitative information to map the other factual circumstances of the supply chain, including at least the following: a) All taxes, fees, or royalties paid to the government for extraction, trade, transport, and export. b) Any other payments or compensation made to governmental agencies, officials, public or private security forces, or armed groups related to extraction, trade, transport, and export. c) Export, import, and re-export documentation, including records of all payments made for these purposes. d) Identification of qualitative conditions of extraction, trade, handling, and export of minerals where red flags have been identified.
• HRS-14: LSM GOLD ONLY: Does the facility adequately collect other qualitative information to map the other factual circumstances of the supply chain, including at least the following: a) All taxes, fees, or royalties paid to government related to extraction, trade, transport, and export. b) All payments or compensation made to government agencies and officials related to extraction, trade, transport, and export. c) All payments made to public or private security forces or other armed groups at all points in the supply chain. d) Current production and capacity of mine(s), a comparative analysis of mine capacity against recorded mine production if possible, and record any discrepancies. e) The security services provided at the mine sites, transportation routes, and all points where gold is handled or processed. f) The training of security personnel, and the conformity of that training with the Voluntary Principles on Security and Human Rights. g) Screening and security risks assessments of all security personnel in accordance with the Voluntary Principles on Security and Human Rights. h) Militarization of mine sites, transportation routes, and points where gold is traded and exported. i) Instances of conflict or tensions in the relationship between medium and large-scale miners and artisanal and small-scale miners.
• HRS-15: ASM GOLD ONLY: Does the facility adequately collect other qualitative information to map the other factual circumstances of the supply chain, including at least the following: a) Taxes, royalties, and fees paid to government institutions and officials on export. b) Militarization of mine sites, transportation routes, and points where gold is traded and exported. c) Instances of conflict or tensions in the relationship between medium and large-scale miners and artisanal and small-scale miners.
• HRS-16: Does the facility have a process to map factual circumstances using a combination of sources and activities, including: a) Consultation with local and central governments and civil society organizations. b) Multiple sources desktop baseline assessment c) An on-the-ground assessment
• HRS-17: For suppliers and materials with identified red flags, does the facility contractually require international traders and local exporters to provide proof of payment of the taxes/payments, mineral origin and import/export information? Note: This information can be disclosed to and held by an institutionalized mechanism and provided through export or other legal documents.
• HRS-18: Does the facility have a process to collect information through on-the-ground risk assessments?
• HRS-18a: Does the process take into account the core principles of evidence-based approach, reliability, quality and competence as defined by the OECD Guiding Note for Upstream Company Risk Assessment?
• HRS-18c: New Question - Does the process outline the methodology, practices and information yielded by the on-the-ground assessment?
• HRS-19: Does the assessment team in the on-the-ground assessment have the necessary skills and competencies?
• HRS-20: Describe the process to determine the scope of the assessment, including: a) Participating actors b) Locations c) Operations
• HRS-21: New Question - Does the facility define the scope of the assessment activities to cover at a minimum the following: a) Obtain first-hand evidence of: a.1) The militarization of mine sites, transportation routes, and points where minerals are traded. a.2) Serious abuses associated with the extraction, transport, or trade of minerals (as defined in the model supply chain policy in Annex II). a.3) Other risks defined in the applicable standard. b) Respond to specific questions or requests for clarifications made by cooperating companies and put forward recommendations for the facility risk assessment and risk management. c) Receive and assess grievances voiced by interested parties on the ground and communicate to cooperating companies
• HRS-22: Do assessments result in a report that includes, at a minimum: a) Methodology b) Assessment team details c) Scope of the assessment d) Sampling methodology e) Limitations f) Results
• HRS-23: Do the reports demonstrate that the process was consistently followed?
• HRS-24: Does the facility include the results of on-the-ground assessment into the due diligence system?
• HRS-25: GOLD AND PRECIOUS METALS ONLY: Where applicable, during on-the-ground assessment, did the facility assist and enable legitimate ASM producers to build secure, transparent, and verifiable supply chains through training and support in the formalization process consistent with the OECD Guidance?
• HRS-26: GOLD AND PRECIOUS METALS ONLY: During the on-the-ground assessment, does the facility obtain detailed information on the supply chain actors and the supply chain of Large-Scale Mining (LSM) material, including: a) Current production and capacity of the mine b) If applicable, information on ASM operations on the LSM concession, on the relationship between the LSM and ASM as well as any instances of ASM material being introduced into the facility operations.
• HRS-27: GOLD AND PRECIOUS METALS ONLY: During the on-the-ground assessment, does the facility obtain detailed information regarding the supply chain actors and supply chain of Artisanal and Small-Scale Mining (ASM) material, including the following: a) An assessment of whether the artisanal mining team or association can be considered as engaged in legitimate artisanal and small-scale mining b) Identification of any instances where materials from other sources are introduced into the supply chain or fraudulently represented c) If applicable, details on the relationship between Large-Scale Mining (LSM) and ASM producers.
• HRS-28: COBALT, GOLD AND PRECIOUS METALS ONLY: Does the facility take due regard to the difference between large scale mining (LSM) and artisanal and small-scale mining (ASM) operations and record if primary material is extracted by LSM or ASM?
• HRS-29: Has the facility assessed the legality of the suppliers / transactions (if applicable)? For example, for the following countries, an ICGLR certificate is legally required for export: DRC, Rwanda.
• HRS-30: COBALT ONLY: Does the facility's due diligence system, at a minimum, provide evidence of the following: a) The independent verification that the requirements of the RMAP Cobalt Standard are met for any external or owned LSM operations b) The independent verification that the requirements of the RMAP Cobalt Standard are met for any external or owned ASM operations