Incident Review Process for Ethical Sourcing in the Precious Metals Industry Explore the comprehensive incident review process designed to ensure ethical sourcing practices within the precious metals sector. This process is critical for maintaining transparency, accountability, and sustainability in sourcing operations. By systematically assessing incidents, we safeguard against unethical practices and promote responsible sourcing standards in the industry.
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The world of precious metals, especially gold and silver, functions within a sophisticated framework that emphasizes ethical standards and responsible sourcing. The London Bullion Market Association (LBMA) is central to this framework, ensuring that all participants, including refiners and community stakeholders, follow these important guidelines.
A significant aspect of this system is the Incident Review Process (IRP), designed to tackle concerns related to unethical conduct and to uphold the integrity of the supply chain.
Reporting unethical incidents
All stakeholders involved in the supply chain, including those listed on the Good Delivery List (GDL), are encouraged to voice concerns regarding any incidents of wrongdoing.
These concerns may range from illegal activities to grievances affecting community members. Reports can be made confidentially and anonymously for those who feel threatened or victimized for raising these issues.
The submission process
To initiate a review, stakeholders must submit their concerns in writing, along with any supporting evidence, to the LBMA’s compliance team at [email protected].
This initial step is crucial as it establishes the foundation for a thorough investigation into the reported incident.
Understanding incident reviews
Upon receiving a report, the Head of Responsible Sourcing initiates an initial assessment. The severity and implications of the incident will dictate whether the matter requires escalation to the Compliance Panel. This panel plays a crucial role in deciding if the Independent Review Panel (IRP) should be involved. The IRP is vital for evaluating the actions of refiners and ensuring adherence to the stringent standards set by the London Bullion Market Association (LBMA).
Gathering corroborative evidence
The Independent Review Process (IRP) may be initiated from various sources, such as media reports, community feedback, or internal monitoring by the London Bullion Market Association (LBMA). The organization aims to validate the information received, although it may decide to keep specific details confidential due to the sensitive nature of the allegations. Supervised by the General Counsel, this process seeks to ensure fairness and thoroughness in examining the activities of the refiner involved.
Transparency and outcomes
Throughout the IRP, the Compliance Panel assesses whether the issues necessitate public disclosure. If deemed appropriate, the refiner in question is notified about the allegations before any public announcement is made on the LBMA website. This procedure is essential for fostering transparency and accountability within the industry.
What refiners should communicate
The London Bullion Market Association (LBMA) calls on refiners to transparently address the recent allegations. They are encouraged to provide insights into the challenges encountered, the risks identified, and the strategies implemented to mitigate these risks. The association emphasizes its commitment to thoroughly reviewing the assurance engagement report from refiners in response to the incident. This approach aims to establish an ongoing process that evolves with new information.
The implications of the independent review process
The independent review process (IRP) concludes with a thorough quality control check conducted by the London Bullion Market Association (LBMA) Sub-Board Group. This group is made up of independent non-executive directors, the Chief Executive, and Executive Directors, whose collective decision is final.
The outcomes of this process can vary widely. A refiner may be removed from the Good Delivery List (GDL), or an independent Assurance Provider might be appointed to create a Corrective Action Plan (CAP) aimed at enhancing future operations. Furthermore, the IRP may initiate a special review of previously assessed activities to ensure continued adherence to ethical standards.
Mandatory audits for compliance
To uphold integrity in the precious metals market, all GDL refiners and new applicants must engage an independent third-party auditor from the LBMA’s Approved Assurance Providers List. This annual Responsible Sourcing audit is crucial for verifying the legitimacy of sourcing practices.
The LBMA’s unwavering commitment to responsible sourcing and ethical practices is reflected in its comprehensive incident review process. By promoting a culture of transparency and accountability, the LBMA ensures that all stakeholders can trust the integrity of the gold and silver supply chain.
