1.
Alignment Assessment of industry programmes
against the OECD Due Diligence Guidance
Hannah Koep-Andrieu – Policy Advisor, OECD
Andrew Britton – Managing Director, Kumi Consulting
June 2017

2.
Presentation contents
Project background and participants
Alignment Assessment methodology
Key findings – across all programmes
Broader themes and considerations
Q&A

3.
Industry programmes in the Due
Diligence Guidance
The OECD Guidance encourages collaboration and cooperation
of companies and the setting up of due diligence initiatives
Advantages of collaborative initiatives:
• Cooperation builds capacity on due diligence, common risks and mitigation strategies
• Cost-sharing when programmes take on specific due diligence tasks
• Coordination between programme members on risk assessment and mitigation for
those who share suppliers or operate in the same areas
• Increased cooperation between upstream and downstream, smaller and larger,
experienced and less experienced companies
• Building partnerships with civil society organisations, government agencies and
international organisations
Companies can outsource some due diligence tasks or use industry programmes
but they retain individual responsibility for carrying out adequate due diligence!

4.
Project objectives
Design and test a methodology for assessing the alignment of industry programmes
with the OECD Due Diligence Guidance
Pilot test the methodology with key industry programmes, assessing:
 The alignment of industry programmes’ standards and systems with the OECD
Due Diligence Guidance
 The alignment of the industry programmes’ implementation efforts with the
OECD Due Diligence Guidance
The Alignment Assessment methodology developed by this project
will inform a Delegated Act of the EU Regulation on mineral supply
chain due diligence

5.
Pilot nature of the project
Draft assessment methodology will be revised after pilot assessment
of the five industry programmes
• Lessons-learnt on both the criteria of the assessment tool and the assessment
process will be fed back through the informal Advisory Group
• A finalised methodology (tool and narrative) will be issued and will be the basis for
the Delegated Act of the European Union
• Aim: to have a finalised methodology by Q3 2017

6.
Alignment Assessment: participants
Participating industry programmes
Informal Advisory Group
Oversight
and delivery
With support
from

7.
Presentation contents
Project background and participants
Alignment Assessment methodology
Key findings – across all programmes
Broader themes and considerations
Q&A

8.
Alignment Assessment methodology (1/4)
Alignment Assessment of programme design
and implementation
 Overarching due diligence principles
 Alignment with the five-step framework
 Specific responsibilities of programmes
Programme governance review
 Assessment of programme management and
governance (separate from Alignment with
the OECD Guidance)

9.
Alignment Assessment methodology (2/4)
Alignment Assessment Tool accompanied by a descriptive Alignment
Assessment Methodology – available on the OECD website

10.
Alignment Assessment methodology (3/4)
Alignment Assessment rating
Do audits challenge whether companies
implement the criteria?
If outside of audit scope, is there evidence
that the criteria are being implemented as a
direct result of programme interventions?
ImplementationPolicies and standards
Are the assessment criteria clearly
addressed in the programme’s policies,
standards, procedures or other formal
documentation?
Fully Aligned | Partially Aligned | Not Aligned Fully Aligned | Partially Aligned | Not Aligned
Fully Aligned (Section A = 100%) + (Sections B and C = 80% or higher) + (no ‘Not Aligned’ criteria)
Partially Aligned All other combinations between Fully Aligned and Not Aligned
Not Aligned (Section A = <50%) OR (Sections B and C = 20% or higher of criteria are ‘Not Aligned’)

11.
Alignment Assessment methodology (4/4)
Confirm scope
of the
assessment
Appoint an
external
evaluator
Engage
relevant
stakeholders
1. Planning
Technical
guidance and
protocols
Performance
and audit
reports
Internal
governance
External
communication
and training
2. Document
review
Programme
staff and
management
Board and
committee
members
Company
stakeholders
External
stakeholders
(e.g. CSOs,
government)
3. Interviews
Observation of
third party
audits at
company
facilities
Interviews with
company
management
Interviews with
auditors
4. Audit
shadows
Completion of
Alignment
Assessment Tool
Develop
conclusions and
recommendations
External
distribution of
report to relevant
stakeholders
5. Analysis
and reporting

12.
Presentation contents
Project background and participants
Alignment Assessment methodology
Key findings on 5-step due diligence – across all programmes
Broader themes and considerations
Q&A

13.
Step 1: Establish strong management
systems
Ensure that due diligence extends beyond Tier 1 (direct suppliers) for
red-flagged supply chains
Build risk assessment and management capacity of suppliers
Develop and implement effective processes for risk mitigation
Key areas for improvement
Establish a policy applicable to the company and its suppliers
Ensure internal management accountability for due diligence
Maintain documentation and records of due diligence
Common strengths across programmes

14.
Step 2: Risk assessment
Map the supply chain – including both origin of minerals and activities
of suppliers
Perform enhanced due diligence on red-flagged locations, suppliers or
circumstances – including on the ground assessments
Consider the full scope of Annex II risks within risk assessments
Key areas for improvement
Identify if minerals are primary (mined) or secondary (recycled)
Common strengths across programmes

15.
Step 3: Respond to identified risks
Report risk assessment findings to senior management
Common strengths across programmes
Implement measurable risk mitigation, and monitor progress
Build or use leverage within the supply chain to mitigate risks
Engage with external stakeholders to support risk mitigation activities
Key areas for improvement

16.
Step 4: Audit
Subject-matter knowledge of audit personnel – mineral supply chains
and OECD Due Diligence Guidance recommendations
Emphasis of risk-based evaluation of due diligence performance over
collection of documentation
Programme and stakeholder oversight on audit findings and outcomes
Key areas for improvement
Formalised audit mechanisms in place, with programme-specific audit
standards and auditor accreditation processes
Audit scope and activities specified by programmes in line with the
recommendation set out in the OECD Guidance
Common strengths across programmes

17.
Step 5: Reporting
Ensure consistent, annual and public reporting by companies on due
diligence processes and performance
Ensure public reporting describes companies’ due diligence
management approach, risk assessment findings and risk mitigation
measures undertaken – in a meaningful level of detail
Key areas for improvement
Some form of company reporting requirements in place at most
programmes, but there were no common areas of strength

18.
Programme governance review
Monitoring of emerging risks and communicating these to companies,
auditors or relevant stakeholders
Oversight and challenge on the technical rigour of auditors’ work
Monitoring and communicating programme results and impacts
Key areas for improvement
Public, up-to-date lists of accredited companies
Defined processes for when audits find non-conformance issues
Processes for vetting prospective member companies
Support for cross-recognition with other programmes
Common strengths across programmes
Additional to the OECD Alignment Assessment criteria

19.
Presentation contents
Project background and participants
Alignment Assessment methodology
Key findings – across all programmes
Broader themes and considerations
Q&A

20.
Broader themes and considerations
Relating to industry programmes
• Programmes report that the rigorous assessment process in itself was a
helpful evaluation for the programmes themselves and helped them
prioritize ongoing or planned changes to standards and implementation
• As part of this process, several programmes already made changes to their
programme standards and the Advisory Group is currently discussing how
those changes can be reflected in the report (as some of them fall outside
the assessment period (calendar year 2016))
• A challenge for programmes is that the assessment looks at all standard
and guidance documents that were used in the 2016 assessment period;
this includes guidance that might have been drawn up well before 2016

21.
Broader themes and considerations
Relating to companies
• Importance of due diligence implementation – particularly beyond
Tier 1 (direct) suppliers
• Risk considerations not to be limited to geographical or conflict
risks – may need to build capacity/awareness of suppliers
• Encouragement to favour mitigation over disengaging as a response
to identified risks
• Encouragement to engage with ASM supply chains
• Encouragement to report transparently on supply chain risks,
challenges, and successful mitigation measures

22.
Broader themes and considerations
Relating to audits
• Urgent need to improve the mineral supply chain and due diligence
knowledge of many auditors
• Programmes need to clarify with auditors and companies that due
diligence is not just collecting documents and going through an
audit
• Stakeholders should recognise the scope, purpose and limitations
of industry programme audits
• There needs to be a mature debate about the balance between
seeking to reduce audit costs and the need to maintain quality

23.
Broader themes and considerations
Relating to civil society
• CSOs play a critical role in monitoring risks and company behaviour
and can be very influential in impacting company decision-making
on mineral sourcing
• CSOs are encouraged to provide evidence from investigations to
programmes so they can follow up on allegations relating to their
members
• If criticising individual companies’ sourcing practices ensure that
publicised claims are supported by evidence to avoid unintended
consequences
• Encouragement to engage constructively and realistically with
companies on responsible ASM sourcing

24.
Hannah Koep-Andrieu
hannah.koep-andrieu@oecd.org
Andrew Britton
abritton@kumi.consulting
http://mneguidelines.oecd.org/
https://mneguidelines.oecd.org/mining.htm