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Regional Initiative against the Illegal Exploitation of Natural Resources

Regional Certification Mechanism (RCM)

The Regional Certification Mechanism (RCM) is one of the six tools of the ICGLR Regional Initiative to fight against the Illegal Exploitation of Natural Resources (RINR). 

Its main focus is currently on four minerals, namely tin, tantalum, tungsten and gold (3TGs)_ referred to as “Conflict Minerals” under the Dodd-Frank Consumer Protection Act (1502), and as “Designated Minerals” under the ICGLR mineral certification scheme.

The purpose of the RCM is to provide for sustainable conflict-free mineral chains in and between ICGLR Member States with the aim of  eliminating financial channels supporting armed groups that sustain or prolong conflict, and/or otherwise engage in serious human rights abuses.

The RCM comprises of the following main elements: (1) Mine Site Inspection and Certification; (2) Mineral Chain of Custody (CoC) Tracking; (3) Mineral Export and Certification; (4) Mineral Tracking Database; (5) Third Party Audits (TPA) and (6) the Independent Mineral Chain Auditor (IMCA).

 

  • Mine Site Inspection and Certification

The ICGLR Mine Site Inspection and Certification Standards are designed to ensure that Designated Minerals are sourced only from mine sites that are conflict free and meet minimum social standards (for example, no child labour). The standards for evaluating mine sites (given in further detail in Appendix 3) and the steps outlined to foster improvement or else disengage from unacceptable mine sites are in compliance with the procedures and standards found in the OECD Due Diligence Guidance (especially Annex II: Model Supply Chain Policy For A Responsible Global Supply Chain of Minerals from Conflict-Affected and High-Risk Areas and Annex III- Suggested Measures For Risk Mitigation and Indicators for Measuring Improvement).

 Under the ICGLR scheme, mine sites are inspected annually by a government mine inspector. These government inspections are cross-checked by annual Independent Third Party Audits carried out by an ICGLR accredited auditor. On-going risk assessments of mine sites areprovided by the office of the ICGLR Independent Mineral Chain Auditor. Mines are classified in one of three categories:

  • Certified (Green Flagged) – mine meets all standards (i.e. no conflict, no child labour); Mine can produce minerals for certified export.
  • Yellow Flagged – infractions of one or more important criteria; Mine operator has six (6) months to resolve situation; Mine can produce minerals for certified export.
  • Un-certified (Red Flagged) – grave infractions of one or more critical criteria; mine is prohibited from producing minerals for a minimum period of six months; mine remains Red Flagged until a further inspection shows the infractions to have been resolved.
  • Mineral Chain of Custody (CoC) Tracking

The ICGLR Chain of Custody Tracking Standards are designed to ensure that Designated Minerals are fully traceable and conflict-free from the mine site to the point of export. Member State governments are responsible for implementing and supervising the chain of custody tracking system within their own borders. The integrity of Member States’ chain of custody systems are verified  by the Independent Mineral Chain Auditor within a period not exceeding one year after establishment or modification of the systems. Mineral flows are tracked and analyzed via an ICGLR Regional Database, using the data on individual shipments collected and transmitted to the ICGLR by each Member States’ Chain of Custody system.

Member States must have a chain of custody tracking system. They can have more than one type of chain of custody tracking system in operation (i.e. for different minerals, or different regions, etc.). Member States can opt to delegate the design or operation of their chain of custody tracking system(s) to a non-state actor. In such cases, the chain of custody system must still conform to ICGLR standards – that is, it must track minerals from source to export; ensure mineral shipments are conflict free; cooperate fully with ICGLR Third Party Audits; and Member States must retain ownership of all the data generated by the chain of custody system, and transfer without restriction and in a timely manner to the ICGLR any and all such data (i.e. on mineral purchases, sales, shipments, etc.) as the ICGLR Secretariat may request. Only pricing information is excluded from the data provided to the ICGLR.

As an added measure, the ICGLR Independent Mineral Chain Auditor (or their designate) must verify during its first year of operation that a Member State’s chain of custody system meets ICGLR standards.

  • Export and Certification Procedures

The ICGLR Certificate serves as the assurance to purchasers that a mineral shipment is conflict free, and meets all other ICGLR standards. Member State governments must examine each export of Designated Material, including all the supporting documentation concerning the chain of custody and mine of origin, before issuing a Certificate. The detailed procedures for Export and Certification Procedures are found in Appendix 5.

  • Regional Mineral Tracking via an ICGLR Database

“Tracking of Regional Mineral Flows” via a public ICGLR Database is one of the main pillars of the ICGLR Certification scheme. Tracking and reconciling mineral flows within and between Member States will assure all stakeholders (Member State governments, local and international NGOs, private sector, end users and others) of the integrity of Certified mineral flows from the region. The Database makes it possible to track and balance the production, purchases and exports of Exporters, mines, mining regions, and Member States. Developing and implementing the Regional Mineral Tracking Database is the responsibility of the ICGLR Secretariat. Member States, mines, traders, processors, exporters and other actors in the mineral chain are required to provide all data (except for pricing information, which will remain confidential) on their production, purchases, sales and exports to the ICGLR Secretariat as and when required. The ICGLR Database will be publicly accessible, as a way of establishing and maintaining the credibility of the ICGLR Mineral Tracking and Certification Scheme.

 

  • Third Party Audits

The Independent Third Party Audit system assures independent verification that the entire mineral chain from mine site to exporter remains in compliance with ICGLR regional standards. The Third Party Audit system complies with OECD Due Diligence guidelines on independent verification and on-going risk assessment (in particular the Supply Chain Due Diligence and Upstream Company Risk Assessment sections of the Supplement on Tin, Tantalum and Tungsten).

ICGLR Audits focus on mineral Exporters. The scope of the audit runs from the Exporter all the way back up the mineral chain to the mine site. Non-compliance by any of the upstream traders or suppliers (up to but not necessarily including mine sites, which are covered by mine site inspections) automatically results in a corresponding level of non-compliance being assigned to  the Exporter; that is, if the auditor finds that a trader supplying to an exporter is in major non-compliance (Red Flagged) then the Exporter itself is also found to be non-compliant (Red-Flagged).An Audit finding that a mine site in major non-compliance (Red-Flagged) will not result in an Exporter being Red-Flagged, unless it can be shown that the Exporter was sourcing material from that mine site while its status was Un-Certified (Red Flagged).

The ICGLR Third Party Audit system is managed by a tri-partite Audit Committee, which has representatives from government, local and international industry, and local and international civil society. Local industry and Civil Society representatives on the Audit Committee are democratically elected from and by their peers in each eligible Member State. The Audit Committee accredits auditors, and sets the standards and terms of reference for Third Party Audits. 

ICGLR Third Party Audits require auditors to perform on-site inspections all along the mineral chain, up to and including mine sites. Audits examine each actor’s conformity with the ICGLR standards. Auditors also perform a risk-assessment role, investigating, evaluating and reporting on the ‘conflict environment’ – the risk and factual circumstances of conflict and conflict-financing associated with exporters, traders and artisanal and industrial miners. The detailed standards and procedures for ICGLR Third Party Audits are given in Appendix 8: Third Party Audits.

  • Independent Mineral Chain Auditor

The ICGLR Independent Mineral Chain Auditor (IMCA) is an important guarantee of regional compliance with ICGLR standards, and of on-going conflict monitoring and risk assessment. The ICGLR Independent Mineral Chain Auditor investigations comply with OECD Due Diligence guidelines on independent verification and on-going risk assessment (in particular the Supply Chain Due Diligence and Upstream Company Risk Assessment sections of the Supplement on Tin, Tantalum and Tungsten).

The ICGLR Independent Mineral Chain Auditor is appointed by the ICGLR Executive Secretary for a three year term pursuant to an independent selection process. The IMCA  is a person of high repute, known for integrity and quality of their investigations. The IMCA is expected to establish as needed a team of investigators, with expertise in the mining sector, mineral chain of custody, conflict and conflict financing, risk assessment, and other disciplines.

The Independent Mineral Chain Auditor has three main areas of responsibility:

Firstly, the IMCA and their team inspects Member States’ chain of custody tracking systems (within a year of those systems beginning operation) to ensure that they meet ICGLR Standards; where the systems do not meet the required standard, the IMCA and their team recommend and require modifications as necessary.

Secondly, the IMCA and their team initiate independent investigations into topics such as the involvement of armed groups in the mineral chain (in ways that might not be revealed by a Third Party Audit), or suspected cases of large scale mineral smuggling, or into instances where the production of a mine, region or Member State does not match the likely productive capacity of that mine, region or Member State. The IMCA can also investigate downstream mineral chains out of the region, if there is an indication that Designated Minerals from the region are being clandestinely exported from the region.

Thirdly, the IMCA and their team provide ongoing assessments of the risk of conflict and conflict financing from mineral exploitation and mineral trading in the region. The IMCA and their team perform this task firstly by collating and analysing existing information relevant to conflict in the ICGLR region. This existing information comes from the ‘Conflict Environment’ portion of ICGLR Third Party Audits, from conflict mapping efforts (including those planned by the US State Department, as well as those produced by IPIS, BGR and by the UN), from local NGOs and civil society organisations operating in conflict-affected areas, from MONUSCO reports and information, from media reports, international NGO reports and from information received by confidential informants (via the ICGLR whistle-blowing mechanism). In addition to collating information, the IMCA will undertake field investigations on a needs basis to evaluate actual and potential conflict risks in the region. The ICGLR Independent Mineral Chain Auditor will publish risk assessment reports on a regular basis. These reports will be available to companies in the region, Member States, and the public at large. (Information likely to put informants at risk will not be made public).

 

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