On 5th October, Mondo Visione published a release from the London Metal Exchange (LME) saying that the LME had published a position paper consulting on new proposed requirements for listed brands regarding the responsible sourcing of metals, which align with the principles set out by the OECD “Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas”.
In summary, LME is proposing that –
- a requirement that all brands undertake an OECD “red-flag” assessment to determine “higher” or “lower” focus classification (except for “automatic higher-focus metals” which include cobalt and tin); and
- a special transitional provision for cobalt to enable LME to take action against brands where the market already demonstrates responsible sourcing concerns.
LME says it will require all relevant producers to assess their risk factors in respect of responsible sourcing – and, where appropriate, to provide evidence of their adherence to the OECD Guidance (or equivalent). It says that LME will work together with producers to assist them in assessing and identifying the “red flags” (as prescribed in the OECD Guidance). Metals will be classified as either “higher-focus” or “lower-focus”. Higher-focus brands – which will automatically include all cobalt and tin brands due to their higher risk of being affected by responsible sourcing concerns – will be required to adopt a standard that is aligned with the OECD Guidance and must demonstrate via an external “alignment assessment” and audit process the respective compliance of the standard to the guidance and of the brand to the standard. Aluminium, both aluminium alloys, copper, lead, molybdenum, nickel and zinc), brands will be classified subject to the results of the red flag self-assessment. If any red flags are triggered in the self-assessment process, brands will be classified as higher-focus and will be expected to comply with the corresponding obligations. Lower-focus brands will not be required to undertake formal standards or brands compliance by the LME. The LME says that for cobalt and tin, chosen standards must be identified by the 4th quarter of 2019 and full compliance with standards will be required by the end of 2020. For all other higher-focus brands, standards must be identified by the 4th quarter of 2020 with compliance by the end of 2021. Non-compliant brands will be eligible for delisting once the relevant deadlines have been passed. However, because of concerns over cobalt, it may be subject to action at an earlier date.
The position paper is at –
The OECD due diligence guidance, which provides a framework for detailed due diligence as a basis for responsible supply chain management of minerals, including tin, tantalum, tungsten and gold, as well as all other mineral resources, is available at –