ADDING OUR VOICE TO EMERGING STANDARDS
“ The informal nature of much ASM makes it amenable to illegal dealings, especially in high-value minerals such as diamonds, gold and coltan. The value chain for such minerals, from mining, through processing, trade and transportation to external markets, is often characterised by leakage, particularly in countries recovering from conflict where prolonged security issues are part of the background to informal operations.”From ‘Minerals and Africa’s Development’, the International Study Group on Africa’s mineral regimes, November 2011.
In recent years, there has been increased global discussion around issues such as:
- supply chain transparency;
- the role of business in areas affected by or at high risk for conflict; and
- business’s social and economic contribution to its host economies.
This debate has brought into sharp focus the need for greater engagement across all sectors of society to achieve demonstrably ‘responsible’ business practices: practices that do not fund or fuel conflict in any way, and contribute positively to broader society.
The mining industry faces its own challenges. For gold particularly, the annual reports of the United Nations Group of Experts on the DRC have consistently highlighted the small but significant role that artisanally-mined gold has played in funding the conflict in that country.
Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) was passed in 2010 by the US government. It will require companies that file periodic reports with the US Securities and Exchange Commission (SEC) to perform due diligence at operations in the DRC and adjoining countries. The due diligence is to determine if a company’s supply chain makes use of any of the so-called ‘conflict minerals’ (tin, tungsten, tantalum and gold). In addition, an assessment is required of whether these minerals are necessary to the functionality or production of a product manufactured or sourced from the DRC and adjoining countries. Should this be the case, the company will be required to submit a report to the SEC. The company will also have to demonstrate that the sourcing of these minerals in no way funds or benefits armed groups in the DRC or its neighbours, and this due diligence must be subject to an independent audit. The SEC’s final Rules and Regulations are expected to be published in 2012.
These developments heighten the need for AngloGold Ashanti and the broader gold industry to achieve the following outcomes:
- Establish standards and certification procedures which are robust and credible and which enable companies to demonstrate that their operations do not contribute to conflict;
- Engage the US government, together with host African governments, in the debate around the consequences – intended and unintended – of Section 1502, with the specific objective of ensuring that the SEC’s forthcoming regulations on Dodd-Frank are implemented in a way that is not damaging for African economies; and
- Develop a proactive industry programme to demonstrate that gold mining is an agent for positive social and economic development.
In 2011, AngloGold Ashanti took an active role in the development of three complementary standards:
- the ‘Supplement on Gold’ to the Organisation for Economic Co-operation and Development’s (OECD) ‘Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas’;
- the World Gold Council’s ‘Conflict-Free Gold Standard’ and
- the Responsible Jewellery Council’s ‘Chain-of-Custody Certification for the gold and platinum jewellery supply chain’. These standards are expected to be finalised and published in 2012 after significant development work in 2011. As part of the development process, the company trialled the draft World Gold Council standard and held workshops to make relevant employees aware of the ramifications of the various standards.
These standards are expected to be finalised and published in 2012 after significant development work in 2011.
As part of the development process, the company trialled the draft World Gold Council standard and held workshops to make relevant employees aware of the ramifications of the various standards.