Annual Progress Report Metals 2019/2020
The International Responsible Business Conduct (RBC) Agreement for the Metals Sector (hereinafter: the Metals Agreement) came into effect on 1 July 2019. A total of sixteen parties – seven companies, two ministries, two industry associations, five civil society organisations – and six supporting organisations signed the Metals Agreement. The focus of the parties in the first Metals Agreement year has been to set the stage by putting in place processes and systems on due diligence that will enable the companies to begin or continue their journey towards building responsible supply chains. The parties also utilised this time to build constructive working relationships with each other, the supporting organisations, myself and the independent secretariat hosted by the Dutch Social and Economic Council.
This report sets out the progress made and challenges encountered during the first year, from July 2019 to June 2020. On implementation of the Metals Agreement, substantial progress has been recorded. Important to mention is the launch of the due diligence toolbox for the companies. It includes various due diligence tools and templates which are collaboratively developed by the parties. It contains a set of materials with which present – and future – company members can get started with their due diligence journey. In order to assist the companies further with implementing due diligence, several due diligence sessions were organised in which almost all the companies participated.
In addition, several parties have worked on a proposal for a collective project to learn more about the scrap metal supply chains between the Netherlands and scrap producing countries (specifically, Ghana). It is proposed in year 2, to launch a project with companies active in the scrap metal supply chains.
The Metals Agreement attracted international attention during the LME-week in London in October 2019, and at a meeting with members of Eurometaux in March 2020. Most importantly, after a year, the parties confirm the Metals Agreement as being relevant to their organisations in the goal towards a more responsible metals supply chain.
Nonetheless, the first year has not been without challenges. The global breakout of COVID-19 in early 2020, had a substantial impact on the implementation of the Metals Agreement in different degrees for the individual parties, and across the different themes of the Metals Agreement. The companies had to deal with understanding and managing the impact on their own business operations as well as disrupted supply chains. These challenges, though significant, did not affect their determination to continue with their commitments to the Metals Agreement. Extensions of the Metals Agreement deliverables were considered necessary for some of the companies to meet their due diligence obligations. These deadlines have been extended to year 2.
The COVID-19 crisis equally had an impact on the collective responsibilities of the parties. A number of external events which the parties were to attend/organise for outreach purposes were either cancelled or postponed. This also had a negative effect on attracting new companies to join the Metals Agreement in the first year. Progress on this important objective is behind schedule for year 1. At the moment, a number of meetings and presentations with potential new parties for outreach purposes are in progress.
In year 2, the parties are closely following the developments around mandatory implementation of the OECD Guidelines for Multinational Enterprises (hereinafter: the OECD Guidelines) at the European and international level. At the European level, EU Conflict Minerals Regulation which regulates supply chain due diligence obligations for tin, tantalum, tungsten and gold originating from conflict-afflicted and high-risk areas will come into effect in 2021. Furthermore, the London Metals Exchange (LME) Responsible Sourcing Requirements will be implemented from January 2021 onwards. Both will take the OECD Guidelines as a starting point. The Metals Agreement will examine what is necessary, and whether it is possible to become an OECD aligned standard so that companies that join the Metals Agreement can potentially comply with the requirements of both the EU Commission and the LME without needing additional effort.
Please take a closer look at some of the highlights of the past year, the activities completed on different themes of the Metals Agreement, lessons learned so far, quotes by some of the members, and our outlook for the coming year.
It was more than a pleasure working with the parties and supporting organisations on the Metals Agreement over the last year and I look forward to intensively supporting the Metals Agreement to deliver great results in year 2.
Independent chair of the International RBC Agreement for the Metals Sector