Acknowledgement for Responsible Mineral Supply Chain from CAHRAs
Octavian, a vertically integrated, fully licensed and permitted multi-jurisdictional mineral trading firm, is wholly committed in providing high quality products and services while meeting the highest ethical and moral standards with respect to responsible sourcing.
Octavian recognizes that risks of significant adverse impacts may be associated with extracting, trading, handling and exporting minerals from Conflict-Affected and High-Risk Areas (CAHRAs), and we recognize that we have the responsibility to respect human rights and not contribute to conflict, we commit to adopt, widely disseminate and incorporate in contracts and/or agreements with suppliers the following policy on responsible sourcing of minerals from CAHRAs, as representing a common reference for conflict-sensitive sourcing practices and suppliers’ risk awareness from the point of extraction until end user. We commit to refraining from any action which contributes to the financing of conflict and we commit to comply with relevant United Nations sanctions resolutions, RCM of the ICGLR 2nd Ed., OECD Due Diligence Guidance for Responsible supply CAHRAs or, where applicable, domestic laws implementing such mechanisms, standards, and/or resolutions. This acknowledgement, moreover, is compliant and incorporates by reference the DMCC Practical Guidance for Market Participants in the Gold and Precious Metals Industry v.1 released April, 2012 (the DMCC Guidance) & the DMCC Rules for Risk Based Due Diligence in the Gold and Precious Metals Supply Chain (the DMCC Rules for RBD-GPM).
Octavian reviews their choice of suppliers and sourcing decisions and integrate into their management systems the following five-step framework for risk-based due diligence for responsible supply chains of minerals from CAHRAs.
Establish Strong Company Management Systems
- Adopt, and clearly communicate to suppliers and the public, a Company policy for the supply chain of minerals originating from CAHRAs. This policy has incorporated the standards against which due diligence is to be conducted, consistent with the standards set forth in the model supply chain policy in Annex II of the OECD Due Diligence Guidance for Responsible supply Chains of Minerals from CAHRAs and the RCM of the ICGLR 2nd Ed.
- Structure internal management to support supply chain due diligence.
- Establish a system of controls and transparency over the mineral supply chain. This includes a chain of custody or a traceability system or the identification of upstream actors in the supply chain. This may be implemented through participation in industry-driven programs.
- Strengthen company engagement with suppliers. A supply chain policy should be incorporated into contracts and/or agreements with suppliers. Where possible, assist suppliers in building capacities with a view to improving due diligence performance.
- Establish a company-level, or industry-wide, grievance mechanism as an early-warning risk-awareness system.
Identify & Assess Supply Chain Risks
- Identify risks in their supply chain as recommended in Annex II of the OECD Due Diligence Guidance for Responsible supply Chains of Minerals from CAHRAs and the RCM of the ICGLR 2nd Ed.
- Assess risks of adverse impacts in light of the standards of their supply chain policy consistent with due diligence recommendations in Annex II of the OECD Due Diligence Guidance for Responsible supply Chains of Minerals from CAHRAs and the RCM of the ICGLR 2nd Ed.
Design & Implement Identified Risk Response Strategy
- Report findings of the supply chain risk assessment to the designated senior management of the Company.
- Devise and adopt a risk management plan. Devise a strategy for risk management by either i) continuing trade throughout the course of measurable risk mitigation efforts; ii) temporarily suspending trade while pursuing ongoing measurable risk mitigation; or iii) disengaging with a supplier after failed attempts at mitigation or where a Company deems risk mitigation not feasible or unacceptable. To determine the correct strategy, companies should review Annex II (Model Supply Chain Policy for Responsible Global Supply Chains of Minerals from Conflict-Affected and High-Risk Areas) and the RCM of the ICGLR 2nd Ed., while considering their ability to influence, and where necessary take steps to build leverage, over suppliers who can most effectively prevent or mitigate the identified risk. If companies pursue risk mitigation efforts while continuing trade or temporarily suspending trade, they should consult with suppliers and affected stakeholders, including local and central government authorities, international or civil society organizations and affected third parties, where appropriate, and agree on the strategy for measurable risk mitigation in the risk management plan. Companies may draw on the suggested measures and indicators under Annex III of the Due Diligence Guidance and the RCM of the ICGLR 2nd Ed. to design conflict and high-risk sensitive strategies for mitigation in the risk management plan and measure progressive improvement.
- Implement the risk management plan, monitor and track performance of risk mitigation efforts and report back to designated senior management. This may be done in cooperation and/or consultation with local and central government authorities, upstream companies, international or civil society organizations and affected third-parties where the risk management plan is implemented and monitored in conflict-affected and high-risk areas.
- Undertake additional fact and risk assessments for risks requiring mitigation, or after a change of circumstances.
- Carry out independent third-party audit of supply chain due diligence at identified points in the supply chain. Octavian, at identified points (as indicated in the OECD Supplements) and within the scope of the RCM of the ICGLR 2nd Ed. shall have their supply chain due diligence practices audited by independent third parties (such as ICGLR). Such audits shall be verified by an independent institutionalized mechanism.
- Report on supply chain due diligence. Octavian shall, in accordance with the RCM of the ICGLR 2nd Ed., publicly report on their supply chain due diligence policies and practices and may do so by expanding the scope of their sustainability, corporate social responsibility or annual reports to cover additional information on mineral supply chain due diligence.
Response to Mineral Extraction, Transport & Trade Abuses
While sourcing from, or operating in, CAHRAs, we will neither tolerate nor by any means profit from, contribute to, assist with or facilitate the commission by any party of:
- Any forms of torture, cruel, inhuman and degrading treatment;
- Any forms of forced or compulsory labor, which means work or service which is exacted from any person under the menace of penalty and for which said person has not offered himself voluntarily;
- The worst forms of child labor;
- Other gross human rights violations and abuses such as widespread sexual violence;
- War crimes or other serious violations of international humanitarian law, crimes against humanity or genocide.
Risk Management of Serious Abuses
We will immediately suspend or discontinue engagement with upstream suppliers where we identify a reasonable risk that they are sourcing from, or linked to, any party committing serious abuses as defined above.
Non-State Armed Group Response
We will not tolerate any direct or indirect support to non-state armed groups through the extraction, transport, trade, handling or export of minerals. Direct or indirect support to non-state armed groups through the extraction, transport, trade, handling or export of minerals includes, but is not limited to: procuring minerals from, making payments to or otherwise providing logistical assistance or equipment to, non-state armed groups or their affiliates who:
- Illegally control mine sites or otherwise control transportation routes, points where minerals are traded and upstream actors in the supply chain; and/or
- Illegally tax or extort money or minerals at points of access to mine sites, along transportation routes or at points where minerals are traded; and/or
- Illegally tax or extort intermediaries, export companies or international traders.
Risk Management of Non-State Armed Groups
We will immediately suspend or discontinue engagement with upstream suppliers where we identify a reasonable risk that they are sourcing from, or linked to, any party providing direct or indirect support to non-state armed groups as defined above.
Public or Private Security Force Response
- We agree to eliminate, in accordance with paragraph 10, direct or indirect support to public or private security forces who illegally control mine sites, transportation routes and upstream actors in the supply chain; illegally tax or extort money or minerals at point of access to mine sites, along transportation routes or at points where minerals are traded; or illegally tax or extort intermediaries, export companies or international traders.
- We recognize that the role of public or private security forces at the mine sites and/or surrounding areas and/or along transportation routes should be solely to maintain the rule of law, including safeguarding human rights, providing security to mine workers, equipment and facilities, and protecting the mine site or transportation routes from interference with legitimate extraction and trade.
- Where we or any Company in our supply chain contract public or private security forces, we commit to or we will require that such security forces will be engaged in accordance with the Voluntary Principles on Security and Human Rights. In particular, we will support or take steps, to adopt screening policies to ensure that individuals or units of security forces that are known to have been responsible for gross human rights abuses will not be hired.
- We will support efforts, or take steps, to engage with central or local authorities, international organizations and civil society organizations to contribute to workable solutions on how transparency, proportionality and accountability in payments made to public security forces for the provision of security could be improved.
- We will support efforts, or take steps, to engage with local authorities, international organizations and civil society organizations to avoid or minimize the exposure of vulnerable groups, in particular, artisanal miners where minerals in the supply chain are extracted through artisanal or small-scale mining, to adverse impacts associated with the presence of security forces, public or private, on mine sites.
Risk Management of Public or Private Security Forces
In accordance with the specific position of the Company in the supply chain, we will immediately devise, adopt and implement a risk management plan with upstream suppliers and other stakeholders to prevent or mitigate the risk of direct or indirect support to public or private security forces where we identify that such a reasonable risk exists. In such cases, we will suspend or discontinue engagement with upstream suppliers after failed attempts at mitigation within six months from the adoption of the risk management plan. Where we identify a reasonable risk of activities inconsistent with the policies above, we will respond in the same vein.
Response to Bribery & Fraudulent Misrepresentation of Mineral Origin
We will not offer, promise, give or demand any bribes, and will resist the solicitation of bribes to conceal or disguise the origin of minerals, to misrepresent taxes, fees and royalties paid to governments for the purposes of mineral extraction, trade, handling, transport and export.
Response to Money Laundering
We will support efforts, or take steps, to contribute to the effective elimination of money laundering where we identify a reasonable risk of money-laundering resulting from, or connected to, the extraction, trade, handling, transport or export of minerals derived from the illegal taxation or extortion of minerals at points of access to mine sites, along transportation routes or at points where minerals are traded by upstream suppliers.
Payment of Taxes, Fees & Royalties Due to Governments
We will ensure that all taxes, fees, and royalties related to mineral extraction, trade and export from CAHRAs are paid to governments and, in accordance with the Company’s position in the supply chain, we commit to disclose such payments in accordance with the principles set forth under the Extractive Industry Transparency Initiative (EITI).
Non-State Armed Group Response
In accordance with the specific position of the Company in the supply chain, we commit to engage with suppliers, central or local governmental authorities, international organizations, civil society and affected third parties, as appropriate, to improve and track performance with a view to preventing or mitigating risks of adverse impacts through measurable steps taken in reasonable timescales. We will suspend or discontinue engagement with upstream suppliers after failed attempts at mitigation.
Octavian has an existing management system to ensure consistent implementation of the due diligence and risk control requirements of the policy which includes but not limited to:
- Scope, clear responsibilities and escalation channels
- Identification, assessment and criteria for high-risk gold supply chain
- Know-Your-Customer (KYC) process
- Monitoring and surveillance of transactions
- Mandatory trainings for relevant staff whom are exposed directly in the supply chain
Octavian requires all its staff involved in the supply chain to strictly comply with this policy and implement it in the management system.
We would like to thank the OECD for the Annex II of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict – Affected and High-Risk Areas 3rd Ed. and the RCM of the ICGLR 2nd Ed. to which this acknowledgement is adapted.
We hereby acknowledge that we have issued a copy of the Octavian Supply Chain Policy, Acknowledgement & Questionnaire for a Responsible Global Supply Chain of Minerals from CAHRAs to all relevant supply chain actors. We hereby undertake to commit to compliance with the supply chain policy for all interactions under Octavian. We also acknowledge that Octavian is open to considering ways to support or assist in establishing processes to promote and improve our responsible sourcing practices, if necessary.