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 recorded by using QuickBooks, providing a 100% receipt and invoice verification and compliance, audited on a yearly basis. These accounting files are open to our stakeholders for inspection at any time. The transactional accounting of material, purchases, in the supply chain are completed using digital or electronic means, either by wire transfer, in the case of larger transactions, or through an M-Pesa system (likely Orange and Airtel). This helps provide full accountability of payments being made throughout the supply chain. This also improves the Company’s security as little to no cash will be on hand at any of the Company locations and all material payments can be controlled through the head office, including the PDV, ‘point de vente’, purchases.
Mine Site Selection: Mine sites, material sources, are chosen through standards set by the Fair Congo Foundation and verified through stakeholder engagement including civil society. In fact, most sites begin as referrals from civil society. This process is also used to help identify sites for potential ‘green site validation’, new PDV, ‘point de vente’, locations as well as review of the Company’s random audits of existing sites.
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, 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).
Step 2 – Identify & assess risk in the supply chain
Community Reporting Mechanism: Fair Congo has established an anonymous disclosure and reporting mechanism which can be accessed by anyone, at any time. This allows anyone from cooperative miners, government officials, and stakeholders to report and identify issues within the supply chain. The reporting form can be found at: www.faircongo.org/communityreporting.
Audits: Fair Congo conducts both internal and 3rd party audits regularly. This includes random re-inspection 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. Furthermore, Fair Congo conducts annual 3rd party audits by certified a CPA to review the company’s finances and a separate audit by approved ICGLR supply chain auditors, to inspect the integrity of the ASM gold supply chain.
Supply Chain Integrity: The Fair Congo supply chain is controlled through several different layers of security to ensure compliance and 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 soon to be launched 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 ensure immediate compliance, before the purchase is made at the comptoir. (Please note, fingerprinting transactions can only happen a comptoir level purchase at this time. 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 will analyze 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). This re-inspection will include an audit of the entire supply chain from the site to the PDV.)
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 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 to handle are then referred to the Company stakeholders and Fair Congo board of advisors 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. Any material sources found to be ‘contaminated’ are suspended and referred to stakeholders engaged in the site certification process.
Bagging: The Company uses security bags to prevent mixing and contamination of material as it transits to the main export office. These bags are inventory controlled and audited by use of the bags individual serial number. Bags will be issued to each collection point or buying agent and inventoried every week. Any bag damaged or missing will be 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
A 3rd party, ICGLR approved auditor will be chosen through a bidding process, to begin after the first 9 months of export operations. This audit will be made available to the public upon its completion. Any recommendations made by the 3rd party auditor will be reviewed by the Company’s management team as well as the Fair Congo board of advisors.
Fair Congo 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 will be issued each year on due diligence practices and challenges. Any reported incidents, including those reported by 3rd parties as well as internally reported incidents, will be documented in this report as well as reported on this link, updated regularly.
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