We propose a new, open framework for upstream mineral supply chain stakeholders to operationalise requirements from the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance). Such a framework is an essential implementation mechanism for companies operating in, and procuring from, those countries covered by European regulation 2017/821 where no upstream due diligence program is established.
The Consolidated Autonomous Due Diligence Upstream (CADD) framework provides a solution to systemic constraints on upstream due diligence scalability, sustainability, accountability and reliability — the most significant challenges to responsible mineral procurement globally. It mitigates Smelters or Refiners’ (SoRs) current dependence on third-party due diligence initiatives for their procurement of minerals and metals from artisanal and small-scale mining (ASM) operations in conflict-affected and high-risk areas (CAHRAs).
These upstream due diligence initiatives are all designed in a way that they manage information and risk on behalf of operators, with limited capacity transfers (when the OECD Guidance clearly states that due diligence is the responsibility of companies). They are also very costly, which generates considerable frustration from governments and other stakeholders in resource-rich countries, because such costs ultimately fall onto ASM communities. Lastly, upstream due diligence programs such as iTSCi, BSP or Just Gold insufficiently incorporate information from other locally-based actors, whose insight and community-level intervention are no less relevant to private sector due diligence. As a result, such third-party due diligence initiatives are not scalable to new geographies beyond the Democratic Republic of Congo (DRC), Rwanda and Burundi (subsidized testing).
The CADD framework will empower upstream companies to take individual due diligence actions and yet ensure a degree of standardised reporting in order to facilitate efficient and effective Step 4 audits at SoR level. These audits are typically coordinated by industry associations such as the Responsible Business Alliance (RBA) and London Bullion Market Association (LBMA).
The framework comprises (i) the CADD Protocol, (ii) a set of guidance documents and templates for supply chain participants, corresponding to each step of OECD operationalisation, and (iii) standardised information sharing templates for other in-country sources of information (Auxiliary Information Sources, or AIS).
CADD development will be done in consultation with all relevant supply chain stakeholders, while primary implementation will be conducted in collaboration with companies involved in the upstream portion of the gold, tin, tantalum, tungsten and cobalt supply chains. Monitored deployment along such pilot supply chains will serve to test and refine CADD tools ahead of publication and dissemination to other upstream stakeholders, globally.
We then ambition for the tools to be incorporated as an upstream due diligence toolkit by EU regulators as well as industry associations such as RBA and LBMA. Future CADD development is open-source in that incident, contextual event, risk and risk mitigation (classification) registries can continue to be expanded over time by users in a collaborative manner. This also applies to the list of AIS (civil society, government, SoRs themselves or third-party auditors) required in each geography based on the level of risk to complement reporting by supply chain participants.