OECD Due Diligence Guidance for Responsible Supply Chains of Minerals

OECD Due Diligence Guidance for Responsible Supply Chains of Minerals
Name	OECD Due Diligence Guidance for Responsible Supply Chains of Minerals
Jurisdiction	Organisation for Economic Co-operation and Development
Adopted	2011
Amended	2016

OECD Due Diligence Guidance for Responsible Supply Chains of Minerals.

The OECD document provides a risk-based, internationally recognized framework devised to assist companies and multinational corporations, non-governmental organizations, ministries of foreign affairs, and parliaments in conducting responsible sourcing from Democratic Republic of the Congo, Central African Republic, Sudan, Sierra Leone, Burundi, and other resource-rich jurisdictions. It draws on precedents from instruments such as the United Nations, International Monetary Fund, World Bank, European Commission, and the United States Department of State, aligning with standards promoted by United Nations Security Council resolutions and regional bodies like the African Union.

Background and purpose

The Guidance originated in response to conflicts linked to mineral extraction in regions including the Great Lakes Region, and was developed by the Organisation for Economic Co-operation and Development with inputs from stakeholders including Amnesty International, Human Rights Watch, International Council on Mining and Metals, Global Witness, International Committee of the Red Cross, Export-Import Bank of the United States, and private sector actors such as Apple Inc., Intel Corporation, Sony Corporation, and Samsung Electronics. Its purpose is to reduce financing of armed groups documented in reports by the United Nations Group of Experts, to support implementation of instruments like the Kimberley Process Certification Scheme, and to complement legislation such as the Dodd–Frank Wall Street Reform and Consumer Protection Act and the EU Conflict Minerals Regulation.

Scope and covered minerals

The Guidance addresses minerals commonly implicated in conflict and human rights concerns, naming examples such as tin, tantalum, tungsten, and gold. It also provides principles applicable to other commodities including cobalt, diamond, copper, and coltan in contexts like Katanga Province in the Democratic Republic of the Congo. The scope targets all actors along global value chains from artisanal and small-scale miners to downstream manufacturers such as Ford Motor Company, Boeing, Tesla, Inc., and electronics assemblers including Foxconn Technology Group.

Five-step due diligence framework

The Guidance sets out a five-step, risk-based due diligence process anchored in standards from the United Nations Guiding Principles on Business and Human Rights and the International Labour Organization. The steps are: (1) Establish strong company management systems drawing on practices from ISO 9001 and OECD Guidelines for Multinational Enterprises; (2) Identify and assess risk in supply chains, using data sources like United Nations Group of Experts reports and civil society monitoring by Global Witness and Sierra Leone-focused NGOs; (3) Design and implement a strategy to respond to identified risks with measures similar to remediation approaches in World Bank safeguard policies; (4) Carry out independent third-party audits drawing on expertise from Ernst & Young, KPMG, PricewaterhouseCoopers, and Bureau Veritas; (5) Report annually and engage in transparent disclosure consistent with norms advanced by Transparency International and the International Organization for Standardization.

Implementation and tools

To operationalize the Guidance, the Organisation for Economic Co-operation and Development developed practical tools including model contractual clauses, implementation templates, and sample reporting templates used by corporations such as Intel Corporation, Johnson & Johnson, Panasonic Corporation, and General Motors. The Guidance is supported by multi-stakeholder initiatives like the Responsible Minerals Initiative, Extractive Industries Transparency Initiative, Public-Private Alliance for Responsible Mineral Trade, and sectoral programs led by United Nations Development Programme and European Bank for Reconstruction and Development. Independent audits and chain-of-custody systems rely on technologies promoted by Blockchain pilots supported by firms like IBM and consortiums including Rwanda-linked traceability efforts.

International and national adoption

The Guidance has been integrated into regional and national measures such as the EU Conflict Minerals Regulation, the U.S. Securities and Exchange Commission's interpretations of Dodd–Frank Act Section 1502, and national legislation in countries including France (Loi sur le devoir de vigilance), Germany (Act on Corporate Due Diligence), and Japan's stewardship codes. International organizations including the United Nations Economic Commission for Africa, Asian Development Bank, and African Union have endorsed alignment efforts, while bilateral initiatives by the United Kingdom Foreign, Commonwealth and Development Office and United States Agency for International Development fund capacity building in producer countries such as Rwanda, Zambia, Peru, and Colombia.

Impact, criticisms, and challenges

Advocates credit the Guidance with improving transparency across supply chains of companies like Microsoft, HP Inc., and Sony Corporation, and with supporting reductions in direct funding to armed groups in some locales documented by United Nations reports. Critics including Global Witness and scholars at Harvard University and London School of Economics argue that unintended consequences include market exclusion of artisanal miners in Ituri District and displacement effects reported in studies from University of Oxford and University of California, Berkeley. Practical challenges include limited state capacity in producer countries, verification difficulties highlighted by Interpol and United Nations Office on Drugs and Crime, and varying enforcement across jurisdictions such as differences between European Commission implementation and United States approaches.

Updates and revisions

The Guidance was first published in 2011 and supplemented by the 2016 update to reflect lessons from implementation, with subsequent revisions and supporting annexes produced through OECD working groups involving stakeholders including civil society, industry associations like the International Tin Association, and national delegations from Australia, Canada, France, Germany, Japan, South Africa, and United Kingdom. Ongoing review processes engage institutions such as the World Bank Group and United Nations Economic Commission for Europe to adapt the Guidance to emerging issues including supply chain due diligence for battery minerals like lithium and nickel and to interface with evolving corporate reporting regimes such as those advocated by the Global Reporting Initiative and the International Sustainability Standards Board.

Category:Organisation for Economic Co-operation and Development