Responsible Minerals: Adding a Compliance Clause to Supplier Agreements

Q: My company would like to update agreements we have with our suppliers, so the suppliers know about our responsible minerals compliance program and commit to providing the necessary information as a condition of the agreement. How should we do this?

A: While every company's situation is different, there are guidelines and best practices that are broadly applicable. We recommend that you DO: 

  • State the problem, just as you would in a policy statement.
    • For example, "ABC Corporation recognizes the need for Responsible Minerals due diligence to address concerns over human rights in the DRC...."
  • Next, make a clear commitment statement and identify the relevant compliance standard.
    • For example, "To address concerns over labor rights related to children working in mines within the supply chain, we engage in Responsible Minerals due diligence and follow the OECD Responsible Minerals due diligence framework."
  • Explain what you expect from your suppliers. 
    • For example, "We expect our suppliers to also conduct appropriate due diligence based on the OECD framework, and annually disclose material source of origin in accordance with the Conflict Minerals Reporting Template. Additionally, we expect suppliers to act upon any risk issues identified in their disclosures and communicated back with them through ABC Corporation's process."

We recommend that you DO NOT:

  • Explicitly state or cite a regulation. Depending on the situation, responsible minerals due diligence may be driven by various regulatory requirements and/or by market expectations, public pressure, or other factors. Citing a specific regulation may lead to confusion in cases where you are in scope for its requirements but your suppliers are not. 
  • Give absolute statements, bans, or demands. The complexity of global mineral supply chains means that absolute statements are difficult to make with any degree of certainty. Instead, the focus should be due diligence and identifying and addressing risks. Improvements in these areas over time are how real progress is made.

References:

Article is current as of 2022-03-03.

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