beyond conflict: reconfiguring supply chain approaches for gold and diamonds · 2020-05-18 ·...
TRANSCRIPT
BeyondConflict:ReconfiguringSupplyChainApproachesforGoldandDiamonds
‐NicholasGarrett
(ResourceConsultingServicesLimited)www.resourceglobal.co.uk
‐ResponsibleJewelryCouncil
London,May18,2010
ResourceConsultingServicesLimited(RCS)
• RCS is a London‐based research, strategy development and implementationconsultancythatprovidesconsideredsolutionstoclients’challengesinextractiveandagriculturalsectors.
•RCSemploysworld‐classanalysisskillstodeveloppracticalstrategiesthatarefactbasedandacademicallysound.
• RCSmatchestheseskillswithadvisory, implementationandevaluationservicesthroughoutaproject’slifespan.• RCShasglobal reachdrawingoncorestaff expertiseandspecialist in countryassociates.
• Examplesare: investmentfacilitation, economic impactassessments, adviceongovernmentintegrityissues.,etc.
NicholasGarrett
• DirectorofResourceConsultingServicesLimited(RCS);• ResearchAssociatewiththeLondonSchoolofEconomics(LSE);• PhDCandidateatFUBerlin(MininginDRC);• BasedinSouthAfrica
• Widelypublishedspecialistintheresearchandin‐depthanalysisofeconomic,political,andsocialstructuresinAfricannaturalresourcessectors;
• Practicalstrategydevelopmentformultilateraldevelopmentorganisations,governmentsandmulti‐stakeholderinitiatives;
• Investmentfacilitationandpracticaladvicetotheprivatesectoronwhereandhowtoconductbusinessinhigh‐riskareas
BackgroundtoPresentation
• PartofRCS’workistoanalyse,advise,implementandaudit‘chainofcustody’assuranceschemesinhighrisk‐areasfortheprivateandpublicsectors;
• RCScurrentlyworksontheissueonthegroundinAfricaandAsia;
• Thispresentationfocusesonpointoforiginassurance(minelevel)inthegoldtradingchainfromEasternDRC
Addsomepracticalpointstothetheoreticaldebate
AreaofInterest
TheGoldTradingChainfromEasternDRC
• EasternDRC’sgoldproductioniscurrently100%artisanal
• Industrialgoldexploitationtoresumeoverthenext1‐2yearsinOrientaleandSouthKivuProvinces
SimplifiedArtisanalGoldTradingChainfromSouthKivu,EasternDRC:
Mine Refining / Consumer
Destinations e.g. India
Urban Export Hub, e.g. Bukavu
Regional Export Hub e.g.
Bujumbura
International Trading Hub e.g Dubai
Rural Trade Hub e.g.
Shabunda
SomeIssueswiththeGoldTradingChainfromEasternDRC
•PrincipleChallengesoccurontheNationalandSub‐NationalLevels:
• VestedInterestsBenefittingfromtheStatusQuo(i.e.Potentialspoilers)
• MilitaryPredationonTrade
• HumanRightsAbuses
• WorkingConditions
• Informality
• LittleTransparency
DivergentViewsonHowtoRespondtoIssueswiththeGoldTradingChainfromEasternDRC
• Westernadvocacyinalliancewithpopularmedia:
“It’sthemineralsfault‐Naturalresourcesendowmentsfuel conflict,facilitaterapeandsustainpoverty!” Industrywillcontinuetobeconfronted!
• Therealityontheground(exampleofarmedgroups): “Thecausalitycounts:a)Mineralsdonotcauseconflict,butconflict andunderdevelopmenthavemadepopulationdependenton resourceextraction;andb)Armedgroups,incl.thenationalarmy preyonpartsoftheminingandothereconomicsectors‐butitistheweakstate structuresfacilitatetheseactions.”
Mixofsecuritysector‐andstate‐,andnaturalresourcemanagement reformisrequired.
HowtoRespondtoIssueswiththeGoldTradingChainfromEasternDRC
•Short‐termandLong‐termgoalshavetobecombinedincentivesarekey!!
• Communitiesneedtradetocontinue(livelihood);
• Stateneedsassistancetoreformsecuritysector(armedgroups)andbuildstateorganisationalcapacity(taxationandminingsectoroversight);
• Responsibleinternationalprivatesectorneedsassurance(socialandpoliticallicensetooperate);
• Domesticprivatesectorneedsprofessionalisationandformalisation(becomepoliticallyacceptablestakeholder)
• Internationaladvocacygroupsneedtoshowtheirdonorstheyarebeingrecognisedandworktoretainaseatatthetable(mediaexposure;participationindiscussionroundsetc.)
IndustryNeedsforGoldTradingChainfromEasternDRC
• Industryneedspointoforiginassurancedowntotheleveloftheminetobeabletosourcewithconfidence;• Therearesignificantchallengestodevelop,effectivelyimplementandsustainablyoperatepointoforiginschemes(seeDiscussionPaperandFiona’sPresentation)
WARNING:KimberleyProcessLegacyIssues
• AdvocacyGroupshavewokenuptothefactthattheKPCSisunabletodeliveronitspromisetoguaranteeoriginandconflict‐freestatusinweakstates!• Weakstates/KPCShavelittlevisibilityinto‐andcontrolover–thedomestictradingchain‐thisisanimmenseintegritythreat
Managestakeholderexpectationsofwhatoriginassuranceschemescanachieve;Theyarenotconflictresolutiontools,butpartoflargermineralsectorprofessionalisation,formalisationandgovernancereformprocesses.
SelectedLessons:MakinganAssuranceSchemeintheGoldTradingChainfromEasternDRCwork
• Needtohaveatransparentpointoforiginassuranceschemedesignprocess,subjecttostakeholderscrutinyandinput;• Needtohaveatargetedapproachonquickwinareasforpilotimplementationwithapossibilityforupscaling;• Needtoaccessandassesstargetminesandupdatethisinforegularly;• Needtobuild,manageandmaintainrelationshipswithdomesticandinternationalstakeholders;• Needtohaveasustainablesecurityelement;• Needtohaveformallyoperatinglocalcompaniesinthevaluechaintobeabletocomplywithchainofcustodyprovisions(subjecttoaudit);• Needindependentverificationandverificationresponsemechanism;• Needtomanagestakeholderexpectationsinternationally,sothattheprocessdoesnotmeetwiththesamedisillusionmentastheKPCS;• NeedtorecovercostsImportantly(andtricky)needGovernmentcommitmentandleadership