Chain-of-Custody Certification

RJC Chain-of-Custody Certification

In March 2012, the RJC launched its Chain-of-Custody (CoC) Standard and supporting documents for the precious metals supply chain. The CoC Standard is applicable to gold and platinum group metals (platinum, palladium and rhodium).

The CoC Standard aims to support the identification of responsibly-sourced jewellery materials produced, processed and traded through the jewellery supply chain. RJC defines responsibly-sourced as:

conflict-free as a minimum, and
responsibly produced – human rights, labour standards, environmental impact, and business ethics (as articulated in the RJC Code of Practices, applicable to the jewellery supply chain from mine to retail).

For information on RJC’s continuing work on chain-of-custody and diamonds, click here.

To view a 20 minute recorded webinar – click RJC Chain-of-Custody Certification – Overview March 2012 - which will take you through to the GoToWebinar platform.

Downloads

Download the Board approved versions of the RJC Chain-of-Custody certification documents, applicable to gold and platinum group metals, below. These documents can be used by interested companies to support the RJC CoC Certification process.

Chain-of-Custody Standard
Chain-of-Custody Standards Guidance
Chain-of-Custody Certification Handbook
Chain-of-Custody Assessment Questions and Evidence (revision 0.1)
Chain-of-Custody Assessment Toolkit (Excel spreadsheet – revision 0.1)
Outsourcing Contractors Assessment Form (Excel spreadsheet)

Also available: Download Frequently Asked Questions on Chain-of Custody Certification

Overview of the RJC CoC Standard for Precious Metals

The CoC Standard is voluntary for RJC Members. It is also publicly available as a resource for good practice for chain-of-custody type systems.
Companies throughout the supply chain – mine to retail – can be certified against the CoC Standard, using third party, RJC-accredited auditors.
The CoC Certification Scope can be defined to cover all or some of a company’s Facilities, with one or more of gold, platinum, palladium and rhodium, in some or all of their production.
Implementation of the CoC Standard is supported by a guidance document, assessment handbook, assessment toolkit (an audit protocol) and training.

Download a PDF Overview of the RJC CoC Standard (June 2012).

Eligible Material under the CoC Standard

The CoC Standard sets out requirements for the identification and tracking of ‘Eligible Material’, which once declared by a CoC Certified Entity, becomes ‘CoC Material’. The following types of gold and platinum group metals are eligible to become “CoC Material”, and may be declared as such by CoC Certified companies:

Conflict-free Mined Material produced by a CoC Certified Entity, by ASM on its concessions, or under a Recognised Responsible Mining Standard, or Mining Byproduct declared by a Refiner;
Recycled Material sourced from Eligible Recyclable sources, screened according to KYC principles to avoid illegitimate sources;
Grandfathered Materials in existence in their current form prior to 1 January 2012.

These different types of Eligible/CoC Material can be mixed. Certified companies must have systems in place to segregate CoC Material from non-CoC Material (either temporal and/or physical segregation), and to reconcile movements of CoC Material in their custody over a given time period.

CoC Material may be transferred by CoC Certified companies to other companies as CoC Material by issuing CoC Transfer Document containing information required by the Standard.

Recognised Responsible Mining Standards

Part A of Fairtrade and Fairmined Standard: The formal recognition of this ASM standard aims to further the work of the Alliance for Responsible Mining (ARM) and Fairtrade International (FLO) with certified artisanal and small-scale producers, particularly in conflict areas. The benefits for these producers will include expanded access to chain-of-custody pathways through to RJC’s Membership in the jewellery supply chain. RJC CoC Certified refiners can source from certified ASM producers, confident in the practices at the mine, and thus contribute to the further integration of ASM into the formal economy. This builds on the recommendations of the ‘OECD Due Diligence Guidance for Responsible Supply Chains – Supplement on Gold’ that all gold supply chain participants support legitimate ASM producers.
Download Q&A – Click here

Due Diligence in the Supply Chain – OECD Due Diligence Guidance

Due diligence to support conflict-sensitive and responsible sourcing practices is of increasing importance to jewellery supply chains, particularly gold. The RJC CoC Standard allows for the tracking of gold and platinum group metals from their starting points in the supply chain, thereby reducing risk and avoiding the need to retrospective inquiries. RJC CoC Certification can therefore assist companies to conform with the OECD Due Diligence Guidance, LBMA Responsible Gold Guidance and the EICC Smelter/Refiner Validation Program, and to comply with the provisions of the US Dodd-Frank Act (Section 1502, Conflict Minerals). Section 10 of the CoC Standard includes particular requirements for Gold Refiners to apply due diligence towards all sources of gold, in line with the OECD Due Diligence Guidance – Supplement on Gold.

Miners must determine by due diligence that mined material has not provided financial or other benefit to Illegal Armed Groups or their affiliates operating in a Conflict-Affected Area. Conflict is defined as “Armed aggression, widespread violence, and/or widespread human rights abuses”. Conformance with the World Gold Council (WGC) Conflict-Free Standard can be used by miners as objective evidence of appropriate due diligence for the RJC CoC Standard.

Any gold sourced from the DRC and adjoining countries must always be identified in CoC Transfer Documents. This is to assist Dodd Frank Act compliance for those companies impacted by the legislation.

A CoC Certified company will need to:

Have a complaints mechanism for concerns about CoC Material.
Have a supply chain policy for materials from conflict-affected areas. It should be communicated to suppliers and made publicly available.
Consider the risks of non-compliance by its suppliers with its supply chain policy, and take action to prevent or mitigate the risks.
Use the OECD Due Diligence Guidance as the key reference for due diligence screening for mined gold, particularly from conflict-affected areas.

Cross-Recognition of Gold Refiner Audits

The Responsible Jewellery Council, the London Bullion Market Association and the EICC-GeSI Conflict Free Smelter program have agreed to cross-recognise audits of gold refinery due diligence. The agreement aims to reduce duplication for refiners and to support broader supply chain efforts to implement Section 1502 of the Dodd-Frank Act for Conflict Minerals. RJC’s recognition of the LBMA and EICC audits as fulfilling parts of Section 10 of the RJC Chain-of-Custody (CoC) Standard is included in the CoC documentation published in March 201. The LBMA and EICC-GeSI CFS recognition of RJC CoC Certification for Gold Refiners means:

CoC Certified Gold Refiners will also be added to the EICC Conflict-Free Refiner list.
LBMA will accept RJC CoC Certification as demonstrating conformance with the LBMA Responsible Gold Guidance applicable to London Good Delivery refiners.
The additional benefit of RJC CoC Certification for refiners and their customers is how it can be used to differentiate types of gold sources (mined, recycled, grandfathered). The SEC rule for Dodd Frank has different supply chain inquiries and disclosure requirements for these different types of sources.

RJC welcomes enquiries from Gold Refiners and their stakeholders about RJC CoC Certification and the cross-recognition agreement.

Please note: Under the cross-recognition, all London Good Delivery gold is not automatically Eligible / CoC Material under the RJC CoC Standard. Other aspects of the CoC Standard continue to apply, including criteria for declaring Eligible / CoC Material.

Conflict-Free Due Diligence Assurance for Mining Companies

Due diligence carried out by mining companies in accordance with the World Gold Council Conflict-Free Standard can be used as objective evidence for the Due Diligence requirements of the RJC CoC Standard 4.2 under ‘Eligible Mined Materials’.

Refiners sourcing from mining companies who have implemented the World Gold Council Conflict-Free and Chain-of-Custody standards can use this as objective evidence for compliance of that supplier/material with RJC CoC Standard 10.4 under ‘Conflict-Sensitive Sourcing’.

More information on standards harmonisation can be found in the RJC Chain-of-Custody Certification Handbook and Standards Guidance.

Section 1502 Conflict Minerals – Dodd-Frank Act

On August 22 20012 the US Securities and Exchange Commission (SEC) released the final rule for Section 1502 on Conflict Minerals in the Dodd-Frank Act. Key points for the gold supply chain include:

OECD Gold Supplement: The final rule endorses the OECD Due Diligence Guidance on Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (May 2011) as a “nationally or internationally recognized due diligence framework” for fulfilling Dodd-Frank requirements of conflict mineral due diligence. The Supplement on Gold is highlighted the only currently available framework for gold due diligence.
Recycled gold: Under the rule, recycled gold is deemed to be “DRC conflict free” and is now equivalent to other sources of gold for SEC reporting purposes. If a reasonable inquiry confirms that it is from recyclable material, its use does not trigger an obligation to file a Conflict Minerals Report.
Grandfathered gold: Existing stocks of refined gold are exempt from application of the rule if they are “outside the supply chain” prior to January 31, 2013. Gold is “outside the supply chain” if it “has been fully refined”, or is located outside of the DRC and adjoining countries (even if not yet fully refined), by the date specified. Thus the very large stocks of existing refined gold held in banks and vaults as well as manufacturers’ inventories are grandfathered as conflict free.
Mining: Mining is no longer considered to be manufacturing, thus removing gold mining companies themselves from the new SEC reporting obligations. Gold mining is, of course, part of the gold supply chain, so reasonable inquiries as to origin and any necessary conflict-sensitive due diligence will continue to apply.

The Due Diligence required under the RJC CoC Standard for both mined and recycled Gold follows the OECD Due Diligence Guidance for Responsible Supply Chains for Minerals from Conflict-Affected and High-Risk Areas. The advantage of RJC CoC Certification is that an independently verified Chain-of-Custody for Gold is established from the relevant starting points in the supply chain, and information to support ‘reasonable country of origin inquiries’ is provided to customers via CoC Transfer Documents.

Under the SEC rule, a “reasonable” country of origin inquiry can accept the representations of a supplier of gold if those representations are reliable and are believed to be true. A company would have reason to believe a processing facility’s (e.g. a gold refiner) representations if the facility received a “conflict-free” designation from a recognized industry group that requires an independent private sector audit. RJC CoC Certification fits the SEC description of a recognised industry group and can thus provide certified assurance to support a facility’s representations. Mining companies, gold refiners, gold traders, jewellery manufacturers and retailers and associated service industries are eligible to achieve RJC CoC Certification via independent third party audit.

The RJC CoC Standard requires CoC Transfer Documents for mined Material to include a Conflict-Free warranty and identify the country of origin of the mined Material. If any Gold originated in or was transported through the DRC and Adjoining Countries, any subsequent CoC Transfer Document for that Gold must identify the country/ies of origin, along with the Refiner/s. Similarly the inclusion of any Recycled and/or Grandfathered Gold is identified in the CoC Transfer Documents. Distinguishing the type of source may be very relevant for SEC disclosures.

The CoC Standard adopts the same cut-off date (1 January 2012) for Grandfathered Gold as the OECD Guidance. This date is before the January 31 2013 date expressed in the SEC Rule. However for companies sourcing gold between January 1 2012 and January 31 2013, the date of receipt of CoC Gold will be documented in CoC Transfer Documents. This period before application of the SEC rule formally commences can thus be used by companies to establish relevant sourcing and records systems.

The SEC final rule can be found at: http://www.sec.gov/news/press/2012/2012-163.htm

Download an RJC Fact Sheet on Section 1502 Conflict Minerals (September 2012) En Français

Download a PDF Overview of the OECD Due Diligence Guidance and Supplement on Gold (June 2012).

Live Training

Webinar training on RJC CoC Certification for gold and platinum group metals is available to Members and Auditors. Please contact training@responsiblejewellery.com for more information and any questions about the standards.

Recorded Webinars

Click the links below and you will be taken to the GoToTraining platform where you can view a recorded webinar at any time.

RJC and Estelle Levin Ltd developed the webinars on the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, and how CoC Certification might assist. Upstream companies are those in the gold supply chain up to and including gold refiners (e.g. large-scale and small-scale miners, mineral traders and exporters, etc); downstream companies are those after gold refiners (e.g. banks and gold traders, and jewellery manufacturers, wholesalers and retailers).

Contact RJC for more information on RJC Chain-of-Custody Certification and how it can be used to support implementation of the OECD Guidance and the SEC rules: consultation@responsiblejewellery.com

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