certified trading chains (ctc) in mineral production€¦ · · 2013-02-22certified trading...

Certified Trading Chains in Mineral Production (CTC)

Certified Trading Chains (CTC)in Mineral Production

Pilot Project Rwanda: Gudrun Franken, Philip Schütte, Jürgen VastersMineral Certification DRC: Dirk Küster, Uwe Näher, Bali BarumeAnalytical Fingerprint: Frank Melcher, Torsten Graupner, Thomas Oberthür

Tervuren, December 2, 2010


• civil wars in central Africasince the late 1990s havelead to militarisation ofmineral production andtrade in eastern DRC

• tin, tantalite, tungsten(TTT) minerals and gold,mainly mined in easternDRC

• human right violations aswell as illegal taxation byarmed groups

Conflict Minerals – Regional Perspective

International Alert (2009)


Conflict Minerals – Trading Chain

Artisanal mining

Trader A

Trader B

Trading center

Export/(import)

Upstream DRC Upstream Rwanda

Artisanal mining

Company

(Trading center)

Export

Refiner

Industrialmanufacturer

Electronicindustry

End user

Downstream

risks

Illegalexploitation/trade taxes

Fraud/smuggling

Mixing ofmaterial

Due

dili

genc

e


Conflict Minerals – Mining Conditions

• labour intensive, low degree of mechanisation• very low productivity, lack of investment• difficult market access, low added value• poor working and security conditions• high environmental impact• undesireable social developments (migration, child labour)• usually informal, often illegal, partly associated with armed conflicts• often the only source of income in the region

Formalisation and legalisation of ASM is neccessary to utilize itspotentials for poverty reduction and sustainable development

Artisanal gold mining inKilo Moto, Ituri (DRC)


reportscommissions

requestsNa#onalCer#fica#on Unit

reportsIndependentAuditor

Client:Industrial consumer

feedback

dialogueaccompanies

Interna0onalpartnership

Government ofproducer country

consult, support supports

ExpertsGovernment of

consumer country

supervision

evaluatestraceability

Producer:Coopera0ve,

Small-‐scale mining

evaluatesperformance

income

requests

Trading chain


• certify producers of conflict minerals (Sn, Ta, W, and Au ore) inRwanda & DRC against CTC standards– origin and traceability– corporate social responsibility– evaluation of mineral producer performance and mineral

traceability along the trading chain by independent auditor

• funding by BMZ (DRC), BMZ/BMWi (Rwanda)

CTC Mineral Certification – Key Elements

→ improved market access and working conditions for ASM

→ fosters stability and may augment state revenues through ASM formalization

→ supply security for downstream trading chain stakeholders through constructive engagement


traceability, transparency

labor &working

conditions

security communitydevelopment environment

mineral origin

fiscal obligations

revenuetransparency

opposecorruption

salary level

child labor

workersorganization

protective &productionmeans

health &safety

training

risk assessment

capacity structureddialoguelocal business

integratedsupport

free, priorinformedconsent

gender

EIA

waste disposal

provisions forrehabilitation

5 pr

inci

ples

20 s

tand

ards

Certification Standards (Rwanda)


• qualified auditor, independent 3rd party• in line with ISO 19011:2002 (ICGLR

requirement)• in-depth review of

– trading chain structure,transparency, conformitywith national law

– mineral traceability from mine toexport

– performance evaluation of corporatesocial responsibility

• data analysis report– recommendations for improvement

CTC Audit Procedure


• based on verifiable documentation, siteinspections, interviews

• includes mining, transport, storage, export– may evaluate any given traceability system

(e.g., iTSCi-based tagging)• includes all organizational levels

– artisanal miners & subcontractors– mining companies & security forces– traders & export handlers– government (e.g., reports, mine inspections)

• plausibility check of production figures• AFP verification possible

– extensive database available in Rwanda forTa (Sn, W in development)

– discourage illegitimate actors for fear of beingexposed

– regular integrity control of trading chainsor/and follow-up on anomalies possible

Rutongo, Rwanda

CTC Audits – Mineral Traceability


• Government– OGMR (mine inspections, oversight)– BGR (technical assistance)– MINIFOM (mining sector governance)– MINICOM (mineral trade & export)– RBS (standards & certification)

• Industry (voluntary)– Natural Resources Development / [H.C. Starck (Sn, Ta, W)]– Rutongo Mines, Eurotrade Int. (Sn, W)– Gatumba Mining Concessions / Kivu Resources (Ta, Sn)– Wolfram Mining & Processing / Wolfram Bergbau &

Hüttengesellschaft (W)– Pyramides (Ta)/ Ningxia * certification workgroup Rwanda

Rutsiro

GatumbaNemba

Rutongo/Ny.

Gifurwe

Cyubi*

Major mines in Rwandaparticipating in CTC

CTC Rwanda – Stakeholders


Project focus• Structure of mining sector

– OGMR reliable partner with improving capacities(but still needs more people…)

– Artisanal mining, but in cooperation with smallmining companies = concession holder

• Building of best practice in Rwandanmining sector– as realistic for ASM conditions (standards)– improve competitive image

• Cooperation with ITRI on mineraltraceability through OGMR– iTSCi is being implemented at CTC mines

• Certification available in Q1/2011

Rutsiro

GatumbaNemba

Rutongo/Ny.

Gifurwe

Cyubi

Major mines in Rwandaparticipating in CTC

CTC Rwanda – Key Elements


• 2007-2009: development of CTC standard draft in internationalconsultation process– initiated at the G8 summit in Heiligendamm, April 2007

– further standard revision on-going (RBS, workgroup)

20092008 2010 2011

CTC Rwanda – Roadmap & Milestones


• 2007-2009: development of CTC standard draft in internationalconsultation process

• 09/2008: cooperation OGMR-BGR on CTC starts

20092008 2010 2011





• 03/2009: planning workshop „Mineral Certification in Rwanda“ withnational stakeholders in Kigali

20092008 2010 2011






• 05-08/2009: 5 major Rwandan mineral producers volunteer toparticipate in CTC as project partners

20092008 2010 2011






• 05-08/2009: 5 major Rwandan mineral producers volunteer toparticipate in CTC as project partners

• 08/2009-03/2010: baseline audits of 4 Rwandan mineral producersby independent auditor– suggestions for improvement

20092008 2010 2011



• 05/2010-on-going: improvement of mining practice, mineraltraceability and transparency in Rwanda– certification workgroup (OGMR, BGR, RBS, MINICOM, MINIFOM) formed in

August 2010

20092008 2010 2011



• 05/2010-on-going: improvement of mining practice, mineraltraceability and transparency in Rwanda

• 10-12/2010: certification audits of 4 Rwandan mineral producersby independent auditor– baseline audit for 5th producer

20092008 2010 2011




• 10-12/2010: certification audits of 4 Rwandan mineral producersby independent auditor

• Q1 2011: decision on certification status of Rwandan mineralproducers– RBS in cooperation with the certification workgroup

20092008 2010 2011




• 10-12/2010: certification audits of 4 Rwandan mineral producersby independent auditor

• Q1 2011: decision on certification status of Rwandan mineralproducers– RBS in cooperation with the certification workgroup

• 04/2011: certification conference in Kigali– In cooperation with ICGLR

20092008 2010 2011



pilot sites

Nyabibwe:Sn, Ta, W;ITRI coop.

Mineral Certification DRC – Stakeholders

Mukungwe: AuLulingu: Sn

Misisi: Au

• partnering with DRCMinistry of Mines, e.g.– SAESSCAM– CEEC

• focus on South KivuProvince– extension possible

• Objectives:– develop/implement

traceability system– capacity building of DRC

sectoral institutions– integration of certification

scheme into nationallegislation


Project status• planning workshops in Kinshasa and Bukavu (Feb/March 2010)• established Kinshasa & Bukavu offices; Goma office planned (North Kivu extension; Q1/2011)• certification workgroup at the DRC Ministry of Mines

• definition of standards• development of national certification concept

• preparation of certification manuals for (1) Sn-Ta-W and (2) Au (Oct 2010)

Mineral Certification DRC – Roadmap


Planned/on-going activities• capacity development of Congolese sector institutions in Kinshasa and S. Kivu (on-going):

• SAESSCAM• Mines Administration Bukavu

• auditing CEEC‘s internal risk control and assurance mechanisms• consultancy to small-scale miners, traders, and comptoirs on certification (on-going)• baseline audits of pilot mines in South Kivu (Q1/2011)

• problem: access to pilot sites (security)

Mineral Certification DRC – Roadmap


Mineral Certification DRC – Ideal Scheme

DR Congo

World Market(via Tanzania/Kenya)

Artisanalmines

Centre deNégoce Comptoirs Traders

Import/Export

Refiners

IndustrialManufacturersSAESSCAM

records prod.;CTC certif. of

mine sites

CEECIssues exportcertificates

RwandaBurundiUganda

Adm. des Mines Sud Kivu

oversees trade near ASM sites

data exchange

External auditor assesses trading chain

Traceability: docs, sealing, transport surveillance, statistics, AFP


• RINR (RegionalInitiative against theIllegal Exploitation ofNatural Resources)– OECD guidance as

additional RINR tool?• ICGLR provides

framework (regional)– ICGLR aims to

coordinate initiatives inthe region

– implementation up tomember states

• CTC = contribution toICGLR’s regionalmineral certificationscheme

Mineral Certification – Regional Perspective


• Phase 1: harmonized export documentation• Phase 2: mineral traceability

– Tagging system– Tracking of mineral flow through data base– Implemented at Kalimbi (South Kivu) from March-September 2010– Implemented at Rutongo (Rwanda) since October 2010– Channel Research: develop 3rd party audits to check validity of iTSCi

scheme• Phase 3: CSR standards (planned)

• There is no direct competition between iTSCi (traceability scheme) andCTC (certification system on multiple standards)– complementing each other

Some facts about ITRI/iTSCi


country-specific certification standards developed- adjusted to ASM reality

contribution to ICGLR certification scheme

- coordination with other initiatives

RWANDA certification audits done/underway

- covering the major Rwandan Sn, Ta, and Wore producers

- implementation into national structures on-going

initial decision on certification expectedfor Q1/2011

DRC acceleration of activities in Q1/2011

- once eastern provinces mining ban stops- baseline audits

CTC – Conclusions


Webhttp://www.bgr.bund.de/[email protected]

CTC RwandaDr Gudrun [email protected] Philip Schü[email protected]

Mineral certification DRCDr Dirk Kü[email protected] Nä[email protected]

CTC Contacts

THANK YOUFOR YOURATTENTION


Standard 1.1: Origin and production volume of minerals fromthe mine site throughout the trading chain are traceable.

4 = Producer and buyer plausibly declare amount, type, and origin of mineral shipments clearly, correctly and verifiably at the mine, at points where material is aggregated, as well as at export and import sites. Producer and buyer take appropriate measures to ensure the integrity of mineral shipments and allow for an independent third party to take any mineral sample at any time for AFP analysis.

Assurance of origin by means of CTC: compliance level 4 is a prerequisite for passing CTC certification data are verified on site by independent auditor plausibility check by auditor: site inspections, key informant interviews compatible with any traceability system provided it is efficient and verifiable AFP: Analytical Fingerprint – independent checking instrument available

certified trading chains (ctc) in mineral production€¦ · · 2013-02-22certified trading...

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