The World Gold Council (WGC) recently produced the Responsible Gold Mining Principles (RGMPs), a framework that outlines the Council’s expectations as to what constitutes responsible gold mining and consolidates existing standards and instruments under a single framework.1 The RGMPs are grouped into environmental, social and governance (ESG) related topics that are increasingly important to a broad range of stakeholders including investors, customers, governments and communities.
Understanding the scope of implementation
The full implementation of systems, policies, procedures and performance levels for the RGMPs will require a significant commitment of time and resources, demanding a comprehensive and ongoing effort that spans multiple functions and involves a high level of collaboration, governance and project management. Deep subject matter expertise will need to be sourced across the company or externally in alignment with the RGMP’s core areas of commitment (i.e. health and safety, human rights, labour rights, anti-bribery and corruption, environment, supply chain management and other related topics).
Some companies may achieve implementation more quickly than others, but by the third year after initiating adoption, all implementing companies’ internal systems and processes should conform to the RGMPs and this, as well as their underlying performance, will need to be independently assured annually at both corporate and site-level. In addition, implementing companies will need to issue an annual public report on RGMP implementation (prepared by the company) and the annual Independent Assurance Report (prepared by the assurance provider). During the first and second years, companies will report on their progress toward achieving conformance, and the assurance providers’ work in these years will be adjusted accordingly.
Risks and challenges for implementing companies
Implementing companies are expected to maintain systems that identify, prevent or manage both the risks related to their operations and those risks that their activities may pose to others.
Companies need to consider an appropriate governance structure to ensure effective oversight of processes to achieve and maintain RGMP conformance.
2. Project management and planning
Key internal stakeholders need to be identified and their buy-in should be secured at the outset.
3. Processes and controls
Companies must design and implement appropriate processes and controls to capture, compile and analyze relevant information. These efforts need to be part of a repeatable and auditable process applied consistently across the organization, from mine sites to the corporate level.
4. Audit trail and evidence
Critical to implementation is the creation and retention of audit trails and evidence to support reporting and proof of conformance. Equally important is the ability to demonstrate compliance across supply chains.
5. Training and communication
As with governance, socialization of the RGMPs through training and communication involves an enterprise wide effort to ensure implementation.
Three questions boards and companies should be asking about implementation of the RGMPs
- Does the organization have the right resources and subject matter expertise in the areas covered by the RGMPs?
- Are the organization’s existing processes and procedures sufficient to appropriately report on the RGMPs or are changes required?
- What, if any, additional risks would conformance introduce to the organization and what measures are being implemented to mitigate such risks?
The key to successful implementation is successful planning. Download the full article for more detail on risks, planning and best practices for implementing the RGMPS.
Let’s do this.
1 Source: https://www.gold.org