Responsible Extractives Trading
This Draft Methodology of the Responsible Extractives Trading study is now published in five languages for a four-week period of public comment. The comments and recommendations received will be reviewed and carefully considered in the finalisation of the methodology. The outcome of this public consultation will be made public in due course through the RMF website: www.responsibleminingfoundation.org.
Summary versions of this report are available in French, Spanish, Russian and Chinese.
Please send your comments and recommendations to: email@example.com
by Friday 24 July 2020, together with the name of the individual or organisation/company, and contact information in the event of further clarification.
The commodity trading sector, in all its diversity, plays a important role in global value chains. However, the extractives trading sector presents particular risks including that of financial misconduct, particularly in light of the high economic stakes and relative opacity of transactions, the complex business structures and sometimes convoluted trading relationships. Further, companies that trade extractive commodities are exposed to risks of human rights abuses through their supply chains, specifically when associated with extraction, trading, handling and export of minerals from conflict-affected and high-risk areas. In some cases, companies may neglect responsible standards of business conduct in order to gain undue competitive advantage, particularly in environments of limited governance and regulatory oversight.
With the growing awareness of the importance of responsible supply chains, there is a growing recognition among governments, customers and consumers of the need for more transparency and traceability in this sector with respect to extractives trading.
Although some guidance applicable to trading activities has been emerging of late, (for example OECD, EITI and Swiss guidance on human rights due diligence) there is no formal measurement tool to assess the policies and practices of companies that trade extractive commodities, on issues such as human rights due diligence, business integrity and financial integrity.
Objectives of the study
Against this background, the Responsible Mining Foundation is undertaking a Responsible Extractives Trading study with the aim to:
- Support awareness raising on responsible extractives value chains;
- Support capacity building for companies, regulators and others;
- Expand the effectiveness of existing international guidance on responsible value chains; and
- Increase understanding of how to support downstream supply chain customers.
The study sets out to achieve these aims through:
- Development of a simple, evidence-based measurement tool for the purpose of assessing, at corporate-level and on the basis of publicly available information, policies and practices of companies that trade in extractives, with regards to human rights due diligence, business integrity and financial integrity; and
- Piloting the measurement tool by applying it to a selected portfolio of geographically dispersed companies.
Timeframe of the study
Following the public comment period, RMF will finalise the methodology of the study and commence initial public domain data-gathering of evidence related to the indicators and metric questions. Subsequently, there will be a company review and reporting period, followed by final analysis and scoring. The results of the study will be published in early 2021.