Gold& conflict

Gold and conflict

 Responsible gold miners have been working for some time to ensure that the gold production does not directly or indirect support conflict. Gold should be a source of economic and social development wherever it is found; any possibility for gold to fund conflict needs to be eradicated. The following paragraphs provide an introduction to the subject of ‘conflict-free gold’.

 What is conflict gold?

 The World Gold Council defines conflict gold as "Gold which enables, fuels or maintains conflict through directly or indirectly financing or benefiting armed groups" Production of gold that fuels conflict is sometimes linked to human rights abuses, such as forced labour and extreme violence.

 What is conflict-free gold?

 Conflict-free gold is defined as gold that has been mined and refined in line with standards that mean its production has not helped to enable or sustain armed conflict or fund armed groups.

 What is being done to eliminate gold that fuels conflict?

 In June 2011 the World Gold Council published a draft Standard designed to combat gold that enables, fuels or finances armed conflict. Following further consultation, an ‘Exposure Draft’ of the Standard, reflecting input from stakeholders and learnings from pilot projects, was published in March 2012. The World Gold Council is undertaking another round of consultation on the Exposure Draft, prior to a final version of the Standard, expected to be published later in 2012.   

 The Standard sets out a framework for tracking conflict-free gold from the mine to the end of the refining process and a framework for ensuring that where gold is mined in a conflict or high-risk zone, its production or transportation does not finance or benefit armed groups.

 The current focus of concern about gold as a factor in fuelling armed conflict is on the Democratic Republic of Congo (DRC) and adjoining countries. The World Gold Council’s Standard addresses this situation for large-scale producers. The framework is designed to be applicable to armed conflicts globally and responds to the requirements of section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Act focuses specifically on gold that fuels conflict, which emerges out of the DRC.

 Other initiatives to counter gold that fuels conflict

 The London Bullion Market Association’s (LBMA) initiative, has introduced its Responsible Gold Guidance, which sets out the due diligence steps to be taken by refiners to ensure that they avoid processing gold that is tainted by conflict.

 The Responsible Jewellery Council has also developed Standards, covering a range of topics including environmental, health and safety, labour and social issues as well as conflict.

 Defining 'conflict'

 In 2011, the Organisation for Economic Co-operation and Development (OECD) published its reported Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. This gives the following definition of conflict-affected and high-risk areas:

 “Conflict-affected and high-risk areas are identified by the presence of armed conflict, widespread violence or other risks of harm to people. Armed conflict may take a variety of forms, such as a conflict of international or non-international character, which may involve two or more states, or may consist of wars of liberation, or insurgencies, civil wars, etc. High-risk areas may include areas of political instability or repression, institutional weakness, insecurity, collapse of civil infrastructure and widespread violence. Such areas are often characterised by widespread human rights abuses and violations of national or international 

 

 

 

law.”

 Through its Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, the OECD is seeking to establish a global framework to help companies to manage their mineral supply chains. The objective is to enable companies, through due diligence, to put in place risk-based processes that will enable continued sourcing of minerals from so-called “red-flag locations” if the appropriate processes and controls are in place.

 The Heidelberg Institute also provide guidance about which areas should be considered ‘conflict-affected or high risk’ through its Conflict Barometer.

 Where to find out more about conflict-free gold

 Industry

World Gold Council conflict-free standard

London Bullion Market Association

 Government / International Organisations

SEC - Materials on conflict minerals rules

SEC - Submissions on proposed rules

OECD Working Group on a Gold Supplement to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas

Launch of the Public-Private Alliance for Responsible Minerals Trade

 

 

The International Conference on the Great Lakes Region – Regional Initiative Against the Illegal Exploitation of Natural Resources