sharing in governance of extractive industries
Artisanal miners produce 20% of the world’s gold, but the complexities of risk management for artisanal sources often deter refiners, brands, and other customers committed to responsible supply chain management. At the same time, international norms such as the Organisation for Economic Cooperation and Development (OECD) minerals sourcing guidance encourage proactive engagement with the artisanal sector to support development. While general guidance exists, along with leadership-level standards for top-performing mines such as Fairmined and Fairtrade, there has not been a set of objective criteria for baseline “market acceptability” of artisanal gold.
The Code of Risk mitigation for Artisanal and small-scale miners engagi... (CRAFT) bridges this gap and can help expand trade between legitimate artisanal producers and refiners, jewelers, electronics companies, banks, and other supply chain actors. The code helps both buyers and miners to assess critical social and environmental risks – such as child labor, illicit trade, and uncontrolled use of chemicals, among others – in artisanal supply chains. The code is progressive, defining clear criteria for critical risks while assessing opportunities for – and making commitments to – mitigate risks and improve on other social, environmental and safety practices.
“For global minerals supply chains, change and market engagement is most critically needed in the places that face the greatest challenges,” said Jennifer Peyser, Director of the Ethical Resource Program at RESOLVE. “CRAFT is innovative as a multi-stakeholder vetted, open source tool to help companies support the economies of artisanal communities, while following good risk management practice and ensuring they are not contributing to illicit trade or human rights abuses.”
At the same time, CRAFT offers a road map to help artisanal miners understand practices and systems needed to engage with global markets, thereby offering access to legitimate buyers and better trading conditions. In 2017 and 2018, ARM piloted the code at two artisanal gold sites in Colombia, including a women’s association who recently completed their first CRAFT sale in July to a local refiner who supplies global refiners. The code can be used by implementing organizations to support their work in formalizing and improving conditions for artisanal miners who live in vulnerable situations and their communities.
“Our pilot with a women’s mining association in Colombia demonstrates the feasibility of entering into formal trade through better collective organization and performance. The experience illustrates the positive impacts of accessing markets, such as better revenues and livelihood conditions,” said Yves Bertan, Executive Director of Alliance for Responsible Mining. “The version 1.0 of the CRAFT Code creates a great array of possibilities of support to formalization processes and fostering better livelihoods for artisanal miners globally, extending this initial experience in other environment and producing countries."
CRAFT was designed to closely reflect the risks outlined in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, as well as other major issues of concern from industry and civil society.
The code was developed under guidance from artisanal miners from 5 countries; non-profit organizations like Pact and Solidaridad who work directly with miners; industry organizations such as the London Bullion Market Association, Responsible Jewellery Council, Intel, Responsible Minerals Initiative, Swiss Better Gold Association, Valcambi, and Argor-Heraeus; United Nations Environment Programme; the Initiative for Responsible Mining Assurance; and several independent technical experts.
“We see CRAFT as one of the cornerstones to drive responsible ASM mining and sourcing,” said Simone Knobloch, COO of Valcambi, a gold refinery. “It is the first industry tool that empowers miners to understand the market sourcing and due diligence requirements, assess their practices and how to address potential gaps, so that they can comply and report conformance with those needs, while providing supply chain actors with the instrument to engage with miners. It will facilitate due diligence by all along the value chain. Using CRAFT schemes, we will be able to support mines improve their practices so they can access global market”.
"We are very excited to see the CRAFT Code being launched now, as our project mines - as well as many other ASM mines - can now be recognized as operating responsibly,” said Boukje Theeuwes, Senior Program Manager for Solidaridad. “For miners, this new code can provide the very necessary gateway into the formal market. Until now this was only possible through international certification against standards which are difficult to achieve for many ASM miners, as it requires significant financial investments, time and training.”
RESOLVE and ARM sought additional input through a global stakeholder consultation process involving over 400 individuals from industry, mining communities, civil society, and governments from over 18 countries spanning 6 continents.
Under CRAFT, buyers, governments, NGOs, and private sector companies working with artisanal supply chains can organize “CRAFT schemes,” which apply the code to reflect the specific legal and technical requirements of the geographies and minerals in which they are working. Miners will produce a CRAFT report to demonstrate conformity with the requirements of CRAFT, to support further due diligence by clients further downstream in the supply chain.
The European Partnership for Responsible Minerals (EPRM) provided funding to ARM and RESOLVE to develop and consult the CRAFT. EPRM has also pledged support for a second phase, during which ARM and RESOLVE will develop further criteria on medium and lower risk issues, and develop a “CRAFT Impact Marketplace” to help potential buyers, donors, and impact investors connect with CRAFT-conformant mines.
Susi Huisman, Advisor at RVO, the EPRM Secretariat said, “The EPRM is proud to have financed the innovative and promising CRAFT Code and believes it has the potential to bring about a systemic change for responsible mineral supply chains that EPRM believes in. The CRAFT Code is well aligned with the key objectives of the EPRM since CRAFT is facilitating market access for artisanal and small-scale miners and enables companies to source from ASM while following good risk management practices. The EPRM will continue its engagement and will further support the implementation of CRAFT.”
CRAFT is now available for download in English, French, and Spanish at craftmines.org. To encourage uptake, alignment, and expanded support for the artisanal sector, CRAFT was developed as an open-source code and released under the Creative Commons CC BY-SA 4.0 license; it may be used and adapted by any stakeholder in artisanal supply chains under the terms of this license.
Alliance for Responsible Mining
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