Responsible sourcing and transparency in supply chains are increasingly important issues for businesses in the jewellery industry as they have become aware of the risks of poor mining practices and the negative impact this may have on their reputation.
Organizations like the Alliance for Responsible Mining (ARM) and the Responsible Jewellery Council (RJC) have developed standards and certification systems to help businesses make their supply chains more transparent and responsible.
RJC launched its Chain-of-Custody (CoC) certification in 2012 to support businesses who wish to provide independent assurance to customers and stakeholders that their gold is traceable from responsible sources, which comply with rigorous environmental, labour and ethical standards such as the RJC Code of Practices (COP).
The Fairmined Standard developed by ARM certifies gold and associated precious metals from responsible artisanal and small-scale mining (ASM) organizations. The delivery of Fairmined certified gold to the market provides confidence for the sector and contributes to the integration of ASM into the formal economy.
The assurance systems of both RJC’s Chain-of-Custody (CoC) certification and ARM’s Fairmined Standard demand that the various supply chain actors undergo regular third party audits to validate compliance with standard requirements. However, the companies often struggle with the audit burden when they participate in various initiatives, as these audits require a significant investment of time and money.
In response to the industry’s demand for reduction of audit burden, ARM and RJC have decided to harmonize their assurance systems where possible and pilot combined Fairmined and CoC audits. This shall as well contribute to reducing barriers towards more responsible supply chains and facilitating engagement with ASM, without compromising the quality and rigour of the initiatives.
Solution of joint auditing
ARM and RJC invited Swiss-based precious metals refiner Metalor Technologies SA, RJC member since 2006 and Fairmined Supplier since 2014, to participate in the pilot, given that the audits for both initiatives were due around the same time.
UL Responsible Sourcing was the third party certification body that conducted the audit in October 2016 after being trained and provided with harmonized audit material and tools. The outcome of the combined pilot was positive for all the involved parties:
“Metalor Technologies SA is proud to be the very first RJC member and Fairmined Supplier to have successfully achieved the demanding requirements set by RJC and Fairmined Standard”, Stated Jose Camino, Group General Counsel at Metalor.
Camino also pointed out that the joint audit approach enabled Metalor to schedule all the audit activities during one period, reducing audit burden in terms of time and costs, and decreasing disruption to normal business activities. “We strongly support the combined audit approach for consistency and efficiency purposes, and will continue with this approach for future audits”.
UL’s Consumer and Retail Services stated that, although RJC and Fairmined have different processes, operating methods and areas of research, they both pursue a common goal: ensuring ethical development. “In this perspective we might say that RJC and Fairmined complement each other. Efficiencies in the auditing process were realised by conducting one site tour and a single interview session and document review with key departments to cover topics from both standards. For example, the combined audit reduced travel expenses by 50%”.
ARM and RJC appreciate the interest and willingness of the actors involved in the first combined audit pilot, and are pleased with the results of the process. Both organizations will continue to collaborate, identifying further opportunities to harmonize and improve the delivery and efficiency of combined audits, and encourage other companies and auditors who are interested to get in contact and join their efforts towards more ethical, sustainable and efficient mineral supply chains.
Read the entire case study about the first Fairmined and RJC combined audit here.
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