In the previous post, we provided an overall introduction to conflict minerals and responsible minerals. This time, we will take a closer look at the core part of the OECD Guidance: the 5-step framework.

OECD Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas

• Purpose: To help prevent contributing to conflict by respecting human rights in decision-making processes.
• Definition: Due diligence refers to a systematic and proactive process that ensures companies respect human rights and do not contribute to conflict while managing supply chains effectively.
• Method: Offers a detailed framework for responsible global supply chain management, focusing on conducting due diligence.

OECD 5-Step Framework

For companies operating in or sourcing from conflict-affected and high-risk areas, the following 5-step framework provides guidance to integrate risk-based due diligence into their management systems:

1. Establish strong management systems

   1. Develop and clearly communicate a responsible policy for supply chain management.
   2. Strengthen collaboration with suppliers.
   3. Create an internal management and control system to support supply chain due diligence efforts.

2. Identify & assess risks in the supply chain

   1. Assess risks based on criteria outlined in the supplements (annexes) of the guidance.
      • Upstream companies: Extractive or mining companies engaged in extracting and producing raw materials.
      • Downstream companies: Companies further along the supply chain involved in manufacturing final products or selling to end users.
   2. Evaluate potential adverse impacts that may violate the supply chain policy.

3. Design & implement a strategy to respond to identified risks

   1. Report findings on supply chain risks to senior management.
   2. Develop, adopt, and execute a risk management plan.

4. Carry out independent third-party audits

   • Conduct third-party audits for relevant entities, such as smelters and refiners.

5. Report annually on supply chain due diligence

   • Publish an annual report disclosing supply chain due diligence efforts, policies, and additional relevant information.

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