Responsible supply chains

The EU Conflict Minerals Regulation – relevance for China and for more sustainable mineral supply chains

15.12.2020 |

On 1 January 2021 the EU Conflict Minerals Regulation (EU CMR) will come into application. It seeks to curb the trade of the so-called ‘conflict minerals', and thus the financing of armed conflict and human rights abuses such as child and forced labor. The EU CMR covers the four minerals tin, tantalum, tungsten and gold (3TG). The regulation requires importers of these minerals to meet due diligence requirements based on the Due Diligence Guidance by the Organization for Economic Co-operation and Development (OECD). This makes the EU CMR another step towards increased mandatory due diligence in the mineral sector.

Against this background, the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC) hosted the International Forum on Sustainable Mineral Supply Chains in Beijing from 2-4 December 2020. Participants from governments, multilateral organizations, NGOs and leading Chinese enterprises attended the event.

Together with the Sino-German Center for Sustainable Development (CSD) and CCCMC, sector programme Extractives and Development (X4D) organized an online session on "The EU Conflict Minerals Regulation - Significance for Chinese Stakeholders", on 4 December. The event provided a platform for policy dialogue and knowledge exchange among relevant stakeholders, aiming to improve mineral supply chain due diligence.

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In her welcome remarks, Johanna Wysluch, Head of the GIZ Sector Programme Extractives and Development, highlighted that "the sustainable sourcing of minerals and metals and the t responsible extraction of resources are key to protect human rights and for the economic development of many partner countries". 

Philipp Dupuis of the EU Commission's DG Trade provided an overview of the EU CMR. He emphasized that "companies that have to carry out due diligence also can resort to individual supply chain due diligence schemes" which will be certified as being compliant with the EU CMR. In time, taking into account these due diligence schemes, there will also be a list of responsible smelters and refiners.

Andrew Britton, Managing Director of Kumi Consulting, shared his insights on the significance for Chinese stakeholders along the supply chain. "The identification of ‘conflict-affected and high-risk areas' (CAHRAs) is a critical early step", said Britton. As there is no official list of CAHRAs yet, the identification of those areas is a frequently voiced concern and Chinese companies are no exception. "Many industry stakeholders consider 'CAHRA' to simply mean 'Democratic Republic of Congo' and its bordering countries, as these are the focus of the Conflict Minerals Rule contained within the US Dodd Frank Act. However, the OECD Guidance applies globally. There are plenty of other countries on other continents that would also fit that classification."

The BMW Group engages in different initiatives to increase cooperation, standardization, certification, and auditing in mineral supply chains such as Drive Sustainability, the Responsible Minerals Initiative, the Responsible Business Alliance and the Initiative for Responsible Mining Assurance. Samara Madjid, Sustainability Manager from BMW Group, said: "We work with around 12,000 suppliers in 70 countries. It is important to us that our partners meet the same high environmental and social standards by which we measure ourselves. All suppliers must undergo a sustainability performance check. Only those companies receive orders who meet all of the BMW Group's sustainability requirements, including those relating to conflict minerals."

For a better understanding of the regulation, more exchange and capacity building are still very much needed. Sun Lihui, Director of the Development Department in CCCMC, emphasised in his intervention that "there still remain a number of questions unanswered, trainings to narrow the gap in capacities and clarify some misconceptions need to follow".

Hagen Ettner, German Director of CSD, highlighted the relevance of cooperation between the public and private sector, between EU, China and resource-rich countries to increase sustainability in supply chains. "Our Center identifies areas where we can combine business operations and development cooperation and where China, Germany and other European partners can join forces with partners in Africa and Asia."

The relevance of the EU CMR for stakeholders along the value chain became clear from various perspectives throughout the session. More than 500 registrations, primarily from China, reflect the high interest in the implications of the EU CMR. 

For further information please contact Christina Ankenbrand or Johannes Lohmeyer.

More information and links:

For a deep-dive into the EU CMR please be invited to join the multi-stakeholder conference "The EU Conflicts Minerals Regulation: Perspectives from Producer Countries" which is convened by the German Federal Ministry for Economic Cooperation and Development (BMZ) and the Responsible Minerals Initiative (RMI) on January 13-14 2021.


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