FOCUSING ON THE FUNDAMENTALS:
BLOG 3 – REMOVAL OF PROGRESS CRITERIA AND REMOVAL OF THE INDEPENDENT MINERAL CHAIN AUDITOR FROM THE RCM MANUAL
This is the third blog in a four-part series to mark the release of the second edition of the Regional Certification Mechanism (RCM) Manual. It provides details of two significant changes in relation to the first edition: namely the removal of both ‘progress criteria’ and the Independent Mineral Chain Auditor function.
In this blog we outline the original intended purpose of progress criteria in the RCM and the Independent Mineral Chain Auditor function, as well as how and why they failed to live up to expectations in terms of generating positive social and environmental impact. For each it is explained why it was necessary to remove them from the mechanism and in the case of progress criteria, how it makes more sense for them to be incorporated into member states’ legal frameworks. Finally, and this is a common theme for many of the revisions discussed in this blog series, we explore why these changes are reflective of normative and legal developments in the responsible mineral sourcing discourse.
Removal of progress criteria from the RCM
The original RCM differentiated between two sets of criteria against which upstream supply chain actor conformance was measured. These were categorized as ‘status criteria’ and ‘progress criteria’.
The revised manual has retained status criteria, which it is argued are fundamental to the purpose of the RCM: to delink the production and trade of designated minerals in the Great Lakes Region from conflict and serious human rights abuses. They are also aligned with the OECD Due Diligence Guidance Annex II risks. Status criteria require that supply chain actors can demonstrate that they do not provide financing or other means of support to non-state armed groups and public or private security forces including international armed forces. They further cover serious human rights abuses, namely:
- “any forms of torture, cruel, inhuman and degrading treatment”;
- “any forms of forced or compulsory labour, 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 labour”;
- “other gross human rights violations and abuses such as widespread sexual violence”; and,
- “war crimes or other serious violations of international humanitarian law, crimes against humanity or genocide.”
By contrast, progress criteria went beyond OECD requirements to include provisions on environmental performance and social impact, such as community engagement and the contribution of ASM mines to local development. Many of these elements were already included in the member states’ mining codes, just not enforced in many cases. Whilst these requirements, when fulfilled, are key ingredients for harnessing the development potential of the minerals sector, they were all too often ignored or deemed unachievable in the short term by the RCM actors. Furthermore, their fulfilment did not directly correspond to the purpose of the RCM, which is to delink the production and trade of designated minerals from conflict and serious human rights abuses. As such, the RCM did not incentivise good performance in this regard, nor did it have measures built in to disincentivise poor performance. The net result of their inclusion was therefore limited to no impact, despite significant additional burden and cost on the mechanism in the form of measuring and verifying performance against them. It was further argued by stakeholders that the inclusion of progress criteria created confusion as to the purpose of the manual and / or diluted other more central requirements.
The removal of progress criteria from the RCM served to fulfil a number of the criteria guiding the revision, as detailed in our first blog in this series. These are: reducing implementation costs, providing clarity to the requirements of the standard, ensuring greater alignment with the OECD Due Diligence Guidance, and increasing the efficiency of the mechanism.
Finally, the removal of progress criteria from the RCM does not diminish the importance of social and environmental issues. Nor does it mean that the aspiration to meet them should be abandoned – in fact, many stakeholders that were consulted as part of the revision process reaffirmed their importance to a thriving and equitable mineral sector in the Great Lakes Region (GLR). After much consultation, it was agreed that in the absence of the widespread fulfilment of the minimum status criteria requirements, the progress criteria must be enforced through member states’ legal frameworks as part of a wider commitment to formalisation and improved standards within the minerals sector in the region.
Removal of the Independent Mineral Chain Auditor from the RCM
In the first edition of the manual, the Independent Mineral Chain Auditor was conceived as playing an important role in overseeing the operational effectiveness and integrity of the mechanism. Its main responsibilities were to:
- Assess chain of custody systems to ensure they fulfilled RCM requirements.
- Conduct independent missions into conflict financing and contraband trade of designated minerals.
- Evaluate conflict and conflict financing risks associated with the mineral trade in the GLR.
In practice, lack of clarity relating to the organisational structure and independence of the mechanism, challenges with establishing a sustainable financing mechanism and question marks concerning its added value meant that the function never really got off the ground.
In this context, stakeholders unanimously called for its removal from the mechanism, which made sense when considered alongside the need to reduce overall implementation costs.
Furthermore, clarification of the roles and responsibilities of the RCM actors means that an effective system of checks and balances is imbedded in the revised RCM, thereby doing away with the need for ‘additional oversight’. The table below demonstrates the primary functions of the key RCM actors, whereby ICGLR is the standard setter and overseer of the mechanism, member states are responsible for regulating and enforcing RCM compliance and supply chain actors are responsible for ensuring they are in compliance with requirements.
Role / Responsibility
Supply Chain Actors
OECD 5 Step Due Diligence
Mine Site Inspection and Certification
3rd Party Auditors for Exporters
Risk Assessments and Spot-Checks
Chain of Custody Implementation
Chain of Custody Licensing
Issue ICGLR Certificate
This system already goes beyond the OECD Due Diligence Guidance requirements by affirming the important role of the ICGLR and member states in overseeing and enforcing requirements outlined in the manual. Further checks, as demonstrated in the first years of RCM implementation, have been overly burdensome, bureaucratic and costly, not to mention duplicating the important role that civil society and other international organisations play in monitoring the performance of the mineral sector in the GLR.
The IMCA position was therefore removed from the second edition of the RCM, with the critical functional elements of the IMCA being delegated to the ICGLR Technical Unit.
Practical implementation experience served to demonstrate both the significant cost and limited added value that both progress criteria and the IMCA function brought to the operation of RCM. Based on feedback from stakeholders consulted as part of the revision process they were removed with the effect of
- refocussing the mechanism on its core purpose of delinking the production and trade or minerals from conflict and serious human rights abuses in the GLR, and
- creating a more sustainable implementation structure with appropriate checks and balances that reinforces rather than renders overly burdensome the implementation of the OECD Due Diligence Guidance in the GLR.
Coming up in the 4th and final blog in this series we discuss the remaining major changes to the second edition of the RCM.
KEEPING MINERALS FROM THE GREAT LAKES REGION FLOWING:
BLOG 2-AN INTRODUCTION TO “BLUE STATUS” FOR MINE SITES AND EXPORTERS
July 2, 2020, by
Mike Loch (Responsible Trade) and Adam Rolfe (Levin Sources)
This is the second blog in a four-part series to mark the release of the Second Edition of the Regional Certification Mechanism (RCM) Manual. It describes the introduction of “Blue Status” for Mine Sites and Exporters and how this “new” element of the RCM is aligned with the OECD Due Diligence Guidance for Responsible Minerals from Conflict Affected and High-risk Areas.
In this blog we outline what “Blue Status” means and how it helps ensure the flow of responsibly sourced minerals in “start-up and low capacity situations”. By this we mean when
- new Mine sites and Exporters are established and have not yet been verified under the RCM, and
- they are already in existence but State and / or ICGLR led verification processes do not have the resources available to conduct verification within the timeframes detailed in the RCM manual.
We contend that this change is an essential ingredient to ensuring the commercial viability of formal 3TG mineral supply chains in the Great Lakes Region.
Why the need for Blue Status?
To answer this question, we need to provide a little background on the genesis of the RCM. At the time of its release in 2011 the RCM allowed for a transition period for Member States to establish processes and procedures in line with the requirements outlined in the manual. The effective mandatory date of entry into force was set at 2014, although efforts in DRC and Rwanda pre-date this. After this all Member States were required to have active programs for implementing the RCM and all Mine Sites and Exporters required verification before Designated Minerals originating from / being exported by them could receive an ICGLR Certificate.
Unfortunately, the reality doesn’t always match the theory. Presently only DRC and Rwanda could be said to implementing the RCM to any great extent, although Burundi and Tanzania just recently began implementation and developments in Uganda are encouraging. What this means is that, under the first iteration of the RCM, supply chain actors were penalized as a result of inaction or incapacity on the part of the Member States in which they operated. If there was no verification system there could be be no verification, which meant that de facto Designated Minerals could not be exported in compliance with the RCM.
To demonstrate the extent of the problem, even in DRC where the RCM had been embraced, low-capacity resulted in the slow roll-out of Mine Site Inspections. With more than 1500 mine site in scope conducting inspections at each of them on an annual basis would have been a herculean task. The reality is much closer to circa 600 sites inspected over eight years, only a few mines inspected more than once.
The situation relating to Exporter Third Party Audits is similar. Whilst there are more than 60 registered exporters in DRC and Rwanda, only 9 Exporters, 5 in DRC and 4 in Rwanda, have been audited under the RCM. Only one of these Exporters has been audited more than once.
In addition, under the First Edition of the Manual a Catch 22 existed for new market entrants. Before commencing operations verification of their compliance with the RCM was required; this was both costly and illogical since only when in operation do Criteria in the RCM become applicable.
This situation was serving as an effective barrier to entry for potentially legitimate business and could not persist. As such, the drafters of the revised RCM manual had to come up with a solution to deal with low-capacity and start-up situations. The solution: Blue Status.
What is Blue Status?
Blue status is the new “forth” status criterion under the RCM. It complements the previous three status criteria of Green (Verified), Yellow (Provisionally Verified) and Red (Not Verified), which denote the outcome of the verification process. By contrast Blue status is the default status for all legally registered Mine Sites and Exporters when no verification has taken place or where a verification has been requested but has not been carried out within the timeframe specified in the RCM.
The tables below outline the process governing Blue status (warning: those of you that are not practitioners or supply chain actors may be inclined to skip over this detail!).
Blue Mine Status Overview
Not Inspected (Blue)
A mine site that has not yet been inspected according to the ICGLR RCM Requirements and / or a Valid (Green) mine site that has not been re-inspected within the last year.
1. A mine site can retain Blue Status for a maximum of 3-years; if not inspected in 3-years it would be become Red Status
2. A previously Not Valid (Red) mine site or Provisionally Valid (Yellow) mine site cannot become Not Inspected (Blue) unless it has subsequently received a Valid (Green) Status.
Mine site can produce and sell minerals for certified export if the exporter has conducted an on-the-ground Risk Assessment, a copy of that assessment is made publicly available and shared with the Member State and ICGLR Secretariat and no Red Status Criteria risks have been identified.
If Yellow Status Criteria are identified as part of the on-the-ground risk assessment the mine site shall have 6-months to mitigate the non-conformance or demonstrate significant measurable improvements for the Yellow Status Criteria identified. If after 6-months the Yellow Status Criteria have not been mitigated or the mine site does not demonstrate significant measurable improvement the Exporter shall immediately suspend or discontinue engagement with the mine site.
Blue Exporter Status Overview
Not Audited (Blue)
An Exporter that has not yet received an ICGLR TPA and has requested an Audit prior to the end of the first year of operation or a Valid Exporter that has requested an ICLGR TPA (with a minimum of 3-months’ notice prior to the expiration of its existing TPA) but has not yet received an ICGLR TPA.
1. Exporters must have initiated the audit process within one year of the effective date of the Revised RCM Manual Second Edition.
2. An Exporter can retain Blue Status until their first ICGLR TPA is completed and thereafter for a maximum of 3-years.
The Exporter may purchase and/or produce Designated Minerals for certified export.
But doesn’t Blue Status mean that un-verified supply chain actors can get away with things they shouldn’t?
This was a question that we as reviewers encountered a lot during the revision process. This concern is based on the reasoning that by allowing Designated Minerals to flow in the absence of state-led verification mechanisms the system allows non-compliant actors to undertake certified export.
However, this is to misunderstand the role of Blue status. Blue status continues to require appropriate checks and balances in line with OECD Due Diligence Guidance, placing the responsibility for due diligence on companies. For example, if an Exporter wants to source from a mine site that is Blue status, it must conduct an on the ground risk assessment and share the assessment report with the government and ICGLR. If the risk assessment identifies any Annex II risk as identified by OECD, they must discontinue sourcing when Red Status Risks are identified) or work with the mine site operator to mitigate Yellow Status Risks within six months. This is exactly how the OECD envisioned the Guidance working.
Similarly, if a Blue status Exporter wishes to conduct a fully certified export it will continue to need to demonstrate to both the Member State issuing ICGLR certificates and mid-tier and/or downstream buyers that its can provide full chain of custody information for the associated mineral lots.
So, whilst the RCM Mine Site and Exporter verification adds additional controls beyond OECD requirements, it is perfectly feasible to ensure conformance with international market expectations in their absence. By introducing the Blue status, the revised RCM gives industry the opportunity to operate, but only if they conduct their operations in conformance with the globally accepted OECD Due Diligence Guidance.
Finally, in order to avoid a situation of perpetual Blue status, which could potentially undermine the additional checks and balances allowed for in the RCM, the revision incorporated a time-limit of 3-years after which non-verified Mine Sites / Exporters once again revert to Red status.
Blue status creates an opportunity for Member State and ICGLR programs as well as businesses operating within their territories to mature in a low capacity situation and it reaffirms the role of industry in effective due diligence. Until now the RCM relied only on Government/ICGLR systems that lack capacity. This change allows responsibly sourced minerals to enter global markets creating the opportunity for greater development in the region.
KEEPING MINERALS FROM THE GREAT LAKES REGION FLOWING;
BLOG 1 – INTRODUCTION TO THE ICGRL RCM SECOND EDITION
June 9, 2020, by Mike Loch (Responsible Trade) and Adam Rolfe (Levin Sources)
This short technical blog series has been developed to help you understand what Regional Certification Manual (RCM) elements have changed, why they were changed, what this means in practice and how the changes represent a significant improvement. The blog series is for anyone with an interest in certifying responsible supply chains in the African Great Lakes Region, and may also be of relevance to other Conflict Affected and High-Risk Areas (CAHRAs). More specifically, it will be of practical value to public institutions (especially mineral producing and mineral importing countries), private sector actors (from producers to traders, exporters, smelters, refiners and end users) and civil society actors / practitioners engaged in the responsible trade of minerals. The series will offer insights that enhance your understanding of the new RCM manual in a time-effective manner.
These blogs mark the publication and entry into force of the Second Edition of the RCM of the International Conference for the Great Lakes Region (ICGLR), in January 2020. Prepared by Mike Loch, Responsible Trade, and Adam Rolfe, Levin Sources, they provide the perspectives of two of the primary drafters and facilitators of the revision process.
What is the RCM and why was it revised?
The RCM of the International Conference of the Great Lakes Region (ICGLR) of central Africa is a regional standard to combat the illicit production and trade of tin, tantalum, tungsten and gold (3TGs), which has been linked to conflict and the perpetuation of gross human rights violations. Drawing on the OECD Due Diligence Guidance for Responsible Mineral Supply Chains, the RCM forms part of the Regional Initiative against the Illegal Exploitation of Natural Resources (RINR) and first entered into force in 2011. Despite some progress in implementation, notably in the Democratic Republic of Congo and Rwanda, and more recently in Burundi and Tanzania, the RCM remains only partially executed and weakly enforced. After 7 years of implementation it was therefore necessary to review and revise the standard with a view to ensuring greater uptake and impact in the years to come.
When and how was the RCM revised?
A comprehensive review and revision of the RCM was undertaken between January 2018 and October 2019, which led to some significant changes being made to the certification scheme.
The revision exercise was conducted by independent consultants from Levin Sources and Responsible Trade on behalf of the ICGLR, and was funded by German development cooperation.
All changes to the existing manual were made on the basis of an inclusive stakeholder consultation process and technical papers assessing the cost and impact of the manual to date. All modifications were further assessed against a list of criteria, developed at the beginning of the process. These were the requirement to:
- Contribute to increasing the credibility of the RCM
- Support implementation efforts and Member State ownership
- Reduce implementation costs
- Provide clarity to requirements of the standard
- Clarify the roles and responsibilities of actors
- Increase the efficiency of the mechanism
- Ensure greater alignment with the OECD due diligence guidance; and
- Provide for appropriate checks and balances
Input was received from international and regional stakeholders from government, industry and civil society, through workshops, information sessions and online consultation platforms.
All feedback and recommendations were compiled into a master matrix and subjected to a technical assessment, taking into account the key criteria.
The Second Edition of the manual went through a total of four iterations before being submitted to the ICGLR Regional Committee for review and validation in October 2019.
What are the main outcomes of the RCM revision process?
The Second Edition of the RCM has not fundamentally changed the purpose of the mechanism, which remains to contribute to, and certify, mineral supply chains that do not directly or indirectly provide support to non-state armed groups and / or public or private security forces, or contribute to serious human rights abuses (as outlined in Annex II of the OECD Due Diligence Guidance on Responsible Mineral Supply Chains).
The new manual does however introduce significant changes to the requirements, processes and roles and responsibilities of actors. We believe that these innovations will make the RCM more user-friendly, ensure widespread uptake in the years to come and strengthen enforcement by focusing on its fundamental elements.
This blog series will serve to provide an overview of the Second Edition of the RCM manual. It will introduce and describe the major changes and their significance:
- Blog 2: Keeping minerals from the GLR flowing: An introduction to “Blue Status” for Mine Sites and Exporters.
- Blog 3: Focussing on the fundamentals: Removal of “Progress Criteria”, Removal of the Independent Mineral Chain Auditor function.
- Blog 4: Other major changes.
Stay tuned for the next blog in the series and find out about the new Blue Status for mine sites and exporters and how this element in the RCM aligns with the OECD Due Diligence Guidance. We will describe what it means and how it helps ensure the flow of responsibly sourced minerals in start-up and low capacity situations – an essential ingredient for ensuring the commercial viability of formal mineral supply chains in the GLR.