OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected & High-Risk Areas
Step 1 – Establish strong company management systems
Accounting: All Company accounting is managed by trained and experienced personnel and kept for a minimum of ten years. A complete digital record is maintained with 100% receipt and invoice verification and compliance and audited internally on a yearly basis. The transactional accounting of material, purchases, in the supply chain are completed using electronic fund transfers and a new more in-depth mobile money system is currently in development. This helps provide full accountability of payments being made throughout the supply chain. This also improves the Company’s security as it reduces what is typically a cash business.
Mine Site Selection: Currently, Fair Congo (‘Origins’) only works at mine sites supported by one of our development partners.
Site Compliance: Once a site has been validated ‘green’, compliance begins with the in-house agent de conformité (compliance officer), the ‘on the ground’ company officer who is tasked with site visits and gathering of all due diligence documentation including ASGM SC Evaluation, KYC, land title documents, taking pictures and randomly interviewing individual miners (a process largely designed by the partners of the USAID funded CBRMT and later reviewed by the LBMA and OECD). During this site visit a small sample of material is taken from each pit to be analyzed using XRF technology and kept on file to reference future material shipments to ensure no foreign material enters that sources supply chain (An amended process similar to that of the fingerprinting initiative by BGR).
Supplier Information: Fair Congo (‘Origins’) keeps a file of all active and non-active suppliers which includes KYC documentation, site inspection forms and any related financial transactions. Each supplier also undergoes extensive background checks through our development stakeholders and is checked against all known sanction lists.
Record Keeping: Fair Congo (‘Origins’) keeps all records for a minimum of ten years.
Site Monitoring: Fair Congo (‘Origins’) is implementing a self-monitoring tool developed in partnership with USAID. This tool is used at all levels of the supply chain and enhances the midstreams capacity to monitor and report on supply chain incidents. Beginning at the cooperative level and extending to the export, this tool engages everyone along the way as well as third parties like civil society and local government actors. Information collected from this tool is then verified through semi-annual site inspections.
Step 2 – Identify & assess risk in the supply chain
Community Reporting Mechanism: Fair Congo (‘Origins’) has established an anonymous disclosure and reporting mechanism which can be accessed by anyone, at any time. This allows anyone from cooperative members, government officials, and stakeholders to report and identify issues within the supply chain. The reporting form can be found at: www.faircongo.org/reporting.
Audits: Fair Congo (‘Origins’) currently conducts only internal audits on a regular basis. This includes random reinspection of sourcing site locations, points of sale and transportation routes. The directeur des finances and gérant regularly audit the company’s finances and conduct security tests to check for weaknesses in the supply chain. This can even include engaging 3rd parties to attempt to infiltrate the supply chain and test our security measures, to test it for weaknesses which can then be repaired before an actual breach occurs.
Supply Chain Integrity: The Fair Congo (‘Origins’) supply chain is controlled through several different layers of security to ensure compliance and ‘Origin’ brand integrity. The first layer is a bagging system used to transport the material, ensuring no mixing of materials along the transport route (An amended process similar to the ITOA and the BGR bagging systems). The second is a ‘fingerprint’ of each mine site, as noted above, recorded and re-analyzed during each transaction to verify provenance. (Please note, fingerprinting transactions can only happen at the processing facility. Purchases made at a PDV, ‘point de vente’, are not yet analyzed in this manner. However, since all material is bagged, and not mixed, the Company analyzes the material once it has arrived in the main processing and export facility in Bukavu. Any material purchased at these PDVs not matching the Company’s fingerprint records for the mine site it is claimed to come from shall be flagged for re-inspection by the agent de conformité (compliance officer))
Step 3 – Design & implement a strategy to respond to identified risks
As risks are identified by the multitude of checks and balances put into place they will be analyzed on a case by case basis to determine the best approach of remediation and possible adaptation of Fair Congo’s (‘Origins’) current due diligence measures.
Management’s Response: The Company management team meets weekly to review all matters of business including the review of any identified risks. Any risks that are considered to be beyond the capacity of the management team are then referred to the Company development stakeholders for their assessment and recommendations.
Fingerprinting audits of purchases: As noted above, all transactions are reverified by the use of XRF technology. Any material found to not match the ‘fingerprint’ are flagged and an audit is begun on the entire supply chain from the source to the point of testing.
Bagging: The Company uses tamper-evident bags to prevent mixing and contamination of material as it transits to the main export office. These bags are inventory controlled by use of the bag’s individual serial number. Bags are issued to each collection point or buying agent and inventoried regularly. Any bag damaged or missing is barred from the system to ensure no future use of that bag. All bags are tamper-evident and all employees issued bags will be held accountable for any loss of inventory.
Step 4 – Carry out independent 3rd party audit of supply chain due diligence
Currently, no 3rd party audits have been completed on a gold supply chain from the DRC. However, Fair Congo (‘Origins’) is currently in the process of joining RJC and, as the key co-investment and implementing partner of the new USAID funded CVCFG, an audit will be conducted for this membership. Additionally, as all supply chain data is recorded within the Consensas® platform, a desktop audit will be conducted by Consensas® prior to completing the RJC audit.
As part of the USAID funded CVCFG, Levin Sources will be assisting Fair Congo (‘Origins’) to enhance its due diligence measures and prepare for the audit process.
Chambers Federation also completes financial audits annually by certified CPAs along with numerous physical and desktop internal audits.
Step 5 – Report annually on supply chain due diligence
A general report is prepared for each year on due diligence practices, challenges and specific supply chain incidents. Any reported incidents, including those reported by 3rd parties as well as internally reported incidents, will be documented in this report. While the first year of export 2018 is complete it has not yet been made public as it is still under review and redaction to ensure privacy rights of those within the reported incidents is respected.
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