'Supply chain due diligence is key to managing the extractive sector'

Rashad Abelson works at the OECD (Organisation for Economic Co-operation and Development), for the Responsible Business Conduct Unit, where he implements the OECD Due Diligence Guidance for Responsible Mineral Supply Chains. He is also working on the development of an online Risk Portal. The OECD Portal for Supply Chain Risk Information will be a one-stop shop for information on 38 different mineral supply chains. EITI country assessments and information will be included on the platform.
We spoke with him on the sidelines of the EITI’s gathering of partner organisations, dedicated to discussing priorities for strengthening extractive industry governance, which was held in Oslo in September 2018.

What do you do and is there a project you're currently working on that you're particularly excited about?

I work for the OECD Responsible Business Conduct Unit, specifically on the team tasked with the implementation programme of the OECD Due Diligence Guidance for Responsible Mineral Supply Chains. As a bit of background, this Guidance was developed to help companies in the minerals supply chain identify and address risks of contributing to human rights impacts, financial crime, and conflict finance, in order to harness the positive potential of the mining sector for development. The Guidance applies to all supply-chain actors (from the miner, to the trader, to the refiner, all the way to the manufacturer and consumer) and all minerals (e.g. gold, cobalt, diamonds, 3T, etc.). The Guidance is referenced in numerous UN Security Council Resolutions as well as regulations in the US (Dodd Frank Act Section 1502) and EU (Regulation 2017/821). 

We work mostly with businesses and industry associations applying the Guidance in their supply chains as well as government on efforts to promote implementation of the Guidance.  One of most exciting projects I am working on at the moment is the development of the OECD Portal for Supply Chain Risk Information (also known as the Risk Portal). This will be a practical, free-of-charge website for companies looking to kick off or bolster their due diligence efforts. The Risk Portal will be a one-stop-shop for information on 38 different mineral supply chains, as well as country-level and mineral-specific risk information related to human rights abuses, money laundering, corruption, tax evasion, gender equality, and natural resource governance. Country assessments under the EITI standard will obviously be featured on the Risk Portal as part of the country level risk profiles.

How is the EITI process and data relevant to your work?

The OECD Guidance recommends that companies focus on particular, priority risks in their supply chains to identify and address. Some of the key risks prioritised in the Guidance are risks of contributing to the non-payment of taxes, fees, and royalties owed to the government, risks of supporting bribery and corruption, and risks of supporting groups that illegally control or benefit from mineral trade and production. Obviously, this is where the EITI's work on financial disclosure and beneficial ownership are key. Companies and countries providing this information will allow for more transparent, less risky supply chains, and thus, more engagement and a better investment climate for the minerals sector. Recognising this, the Guidance directly references the EITI principles and calls on companies to “commit to disclose such payments in accordance with the principles set forth under the Extractive Industry Transparency Initiative (EITI).” And where companies are operating in non-EITI countries, the OECD encourages engagement local stakeholders to support EITI principles and disclosure according to EITI principles.

What are the policy areas the EITI should prioritise in the run up to next year's Global Conference?

From the OECD’s perspective, we really think it should be pushing companies to implement international standards – UN standards, EITI standards, OECD standards – to meet international  expectations of doing business responsibly, particularly in the extractives sector. In order to push companies, states themselves should take a more proactive role to promote and enforce these standards, reduce negative externalities in the supply chain (e.g. prosecuting bribery cases and taking steps to stop smuggling), and support international institutions to achieve these goals.