Graz Stork Metals recognises the risks associated with our mineral supply chain, and incorporates ESG factors into our business decisions to reduce risk, enhance financial returns and meet the expectations of our stakeholders.
We commit to refraining from any action which contributes to the financing of conflict and we commit to comply with relevant United Nations sanctions resolutions or, where applicable, domestic laws implementing such resolutions.
We want to ensure that our increasing participation in the flows of metals commodities around the world enhances the lives of the communities in which we operate, and helps to preserve land and resources for future generations.
It is our objective to:
We also hope to influence other market participants to improve their performance in these areas.
We aim to have a multi-stakeholder approach to supply chain due diligence by collaborating with other industry members (even upstream and downstream), and building partnerships with civil society organisations.
Our supply chain policy is:
1) While sourcing from, or operating in, conflict-affected and high-risk areas, we will neither tolerate nor by any means profit from, contribute to, assist with or facilitate the commission by any party of human rights abuses, especially including:
We will not tolerate any direct or indirect support to non-state armed groups through the extraction, transport, trade, handling or export of minerals.
We agree to eliminate direct or indirect support to public or private security forces who illegally control mine sites, transportation routes and upstream actors in the supply chain; illegally tax or extort money or minerals at point of access to mine sites, along transportation routes or at points where minerals are traded; or illegally tax or extort intermediaries, export companies or international traders.
2) We will not offer, promise, give or demand any bribes, and will resist the solicitation of bribes to conceal or disguise the origin of minerals, to misrepresent taxes, fees and royalties paid to governments for the purposes of mineral extraction, trade, handling, transport and export.
3) We will support efforts, or take steps, to contribute to the effective elimination of money laundering where we identify a reasonable risk of money-laundering resulting from, or connected to, the mineral supply chain derived from the illegal taxation or extortion of minerals at points of access to mine sites, along transportation routes or at points where minerals are traded by upstream suppliers.
4) We support the implementation of the principles and criteria set forth under the Extractive Industry Transparency Initiative (EITI) for the public disclosure, on a disaggregate basis, of all information on taxes, fees, and royalties related to mineral extraction, trade and export from conflict-affected and high-risk areas are paid to governments.
5) In accordance with our position in the supply chain, we commit to engage with suppliers, central or local governmental authorities, international organizations, civil society and affected third parties, as appropriate, to improve and track performance with a view to preventing or mitigating risks of adverse impacts through measurable steps taken in reasonable timescales.
6) We will suspend or discontinue engagement (after failed attempts at mitigation) with upstream suppliers where we identify a reasonable risk that they are involved in, sourcing from, or linked to, any party committing serious abuses.
Graz Stork Metals is committed to maintaining compliance with all applicable national and international environmental laws and regulations as well as continuously improving its environmental footprint. This commitment drives us to identify and consider new opportunities to monitor and minimize the impact of our operations on the environment, as well as to join global efforts in the fight against climate change. We ensure the integration of sound environmental practices in our day-to-day activities and long-term business management and strategy.
Graz Stork Metals fulfills this commitment by:
Implement a ‘Risk based approach’ (measures that a company takes to conduct due diligence should be commensurate to the severity and likelihood of the identified risks) with explicit application to conflict-affected and high-risk areas. Take reasonable steps and make good faith efforts to implement the OECD’s due diligence framework.
1) Company management systems
And incorporate the supply chain policy and due diligence processes into commercial contracts and/or written agreements with suppliers which can be applied and monitored, including, if deemed necessary, the right to conduct unannounced spot-checks on suppliers and have access to their documentation.
Support the capabilities of suppliers to improve performance and conform to our company’s supply chain policy.
Establish, where practicable, long-term relationships with suppliers as opposed to short-term or one off contracts in order to build leverage over suppliers.
2) Identify & Assess risks in the supply chain
Identify and assess actual or potential risks by evaluating the circumstance against our supply chain policy, and any applicable national laws.
Identify the factual circumstances (using an evidence-based approach) in the ‘mineral supply chain’ of products originating from conflict-affected and high-risk areas, concerning chain of custody or traceability (mine of material origin);
Make reasonable efforts to obtain through incorporation of the below disclosure requirements into commercial contracts with local producers or exporters:
And readily disclose this information to immediate downstream purchasers when requested.
Facilitate auditor contact and logistics with other upstream actors and local stakeholders.
When buying directly form the miners or local traders, the risk assessment may be supported by:
When buying from smelters/refiners assess whether they have carried out all elements of due diligence for responsible supply chains of minerals from conflict-affected and high-risk areas.
3) Manage risks
The independent compliance team report finding to the company’s senior management outlining the information gathered and the actual and potential risks identified in the supply chain risk assessment.
The internal accountability with respect to the implementation of the supply chain due diligence process lies with the commercial team.
Implement a risk management plan, that includes continuing to trade or temporarily suspend trading while pursuing ongoing risk mitigation; or disengage with a supplier after failed attempts to mitigation (or mitigation is not feasible, or risks unacceptable).
Ongoing risk mitigation should state clear performance objectives within a reasonable timeframe (3-6 months) and include qualitative and/or quantitative indicators to measure improvement.
4) Publicly report on due diligence
Monitor Red Flags
Risk response strategies – for minerals with risks of fraudulent information, unknown/insufficient information on origin or chain of custody:
Responsibility for determining the actions that a company undertakes in response to identified risks rests with the company's management.
| Risk | Risk Response |
|---|---|
| Type 1 (low risk) |
Accept or dispatch any segregated minerals. Continue to monitor the supply chain. Collaborate with upstream participants and other stakeholders to strengthen due diligence. Publicly report on due diligence in accordance with Step 5 of the Guidance. |
| Type 2 (indeterminable) |
Work with national authorities, suppliers, service providers, regional or industry due diligence programs and other stakeholders to implement stronger chain of custody or traceability systems; Accept or dispatch segregated minerals if relevant (see paragraph 1 above); Improve internal due diligence systems, e.g. improve internal data-management, any chain of custody or traceability systems, and identify and manage any risks over time; Support efforts of national authorities to improve governance of the mineral sector, for example in the inspection and classification of mine sites (e.g. as green-, yellow- or red-flagged) for sourcing purposes; establishment and implementation of chain of custody or traceability and due diligence systems; mineral export certification; data management and exchange; Consider applying a share of mineral sales, as agreed by stakeholders, to help finance implementation of due diligence, through nationally, multi-stakeholder or industry programs; and Publicly report on due diligence. |
| Type 3 (mitigation risk) |
Same risk response as Type 2 above; also Alert authorities and national, multi-stakeholder or industry due diligence programs of the risk |
| Type 4 (risk of contributing to conflict) |
Suspend or discontinue engagement with the supplier for a minimum of three months. Suspension may be accompanied by a revised risk management plan, stating the performance objectives for progressive improvement that should be met before resuming the trade relationship; Alert authorities and national, multi-stakeholder or industry due diligence programs of the risk and involve them and other affected stakeholders in risk management; Work with national authorities, suppliers, service providers, regional or industry due diligence programs and other stakeholders to implement stronger chain of custody or traceability systems, risk assessments and on-going monitoring; Improve internal due diligence awareness and capacity, e.g. improve internal data-management, chain of custody or traceability systems, and identify and manage any risks over time; Support other efforts of national authorities to improve governance of the mineral sector, for example in the inspection and classification of mine sites (e.g. as green-, yellow- or red-flagged) for sourcing purposes; establishment and implementation of national chain of custody or traceability and due diligence systems; mineral export certification; data management and exchange; Publicly report on due diligence. This includes, among others, a description of the nature of the risks identified (e.g. number of type 4 risks identified), and the risk response measures put in place, including the actions described above, as well as the monitoring and risk prevention efforts. If minerals are segregated and secured by the upstream company already, [sell minerals to authorities at cost for later sale with profits used to finance implementation of due diligence, through nationally, multi-stakeholder or industry programs]; If the identification of type 4 risks occurs after the mineral has been traded downstream and initial due diligence performed (i.e. during the minerals’ subsequent progression down the supply chain), companies and on-the-ground due diligence programs should consult with central and local authorities, civil society and other affected stakeholders to see if any further risk management measures are expected. In general, follow-up measures to identify the minerals downstream which are associated with type 4 risk should be avoided, so as to enable constructive engagement of all companies in the supply chain in the implementation of due diligence. Specifically:
Companies are not in breach of OECD guidance, so long as companies have carried out the due diligence and risk management mentioned, if:
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Specific steps to be taken when there’s insufficient information on origin or chain of custody:
Engage with central and local authorities, civil society and other affected stakeholders to collect any missing origin and chain of custody or traceability information on the minerals where it exists.
Reach out to suppliers of minerals with incorrect or fraudulent information and on-the-ground due diligence programs and request details, including an explanation of due diligence conducted on the minerals and any other (documentary or qualitative) evidence of risk, origin and chain of custody. The supplier’s willingness to engage and take corrective action will help determine the appropriate risk response strategy.
ASM metal
The rising awareness about ‘conflict minerals’ and regulatory pressure to report on sourcing practices have led to reluctance by some international buyers and users of minerals to source from conflict-affected and high-risk areas, given the risks involved. This, for example, has led in some cases to companies effectively sourcing ‘Africa-free’, or expecting “100% conflict-free” product guarantees, instead of putting in place due diligence systems to ensure responsible sourcing from conflict-affected and high-risk areas, as is the aim of the Guidance. These types of expectations and the risk-averse behavior are counterproductive, and based on a misperception of international standards. The Guidance encourages companies to engage responsibly in sourcing minerals from conflict-affected and high-risk areas. Responsible sourcing of minerals is about good faith efforts to work and improve conditions in the supply chain. Unless a buyer finds evidence of armed group involvement or serious human rights abuses in the mine or trader, on-going engagement through sourcing relationships, in particular with artisanal miners, is the recommended course of action. Otherwise, there’s a risk that the trade will become even more hidden, leaving the miners in a worse-off position. While legislation across countries varies, the Due Diligence Guidance encourages buying ASM metal, provided that ASM activities are legitimate and that adequate due diligence is carried out and risks identified and managed accordingly.
Last updated: November 2021
Policy owner: Ajay Ramchandani, Head of Compliance, Insurance & Risk