01 Apr 2016

DIGITALEUROPE Statement Public Private Partnership for Responsible Sourcing Regulation

DIGITALEUROPE Statement Public Private Partnership for Responsible Sourcing Regulation

As European policymakers debate the merits of a responsible sourcing regulation, DIGITALEUROPE would like to communicate its position that it is important for any effective scheme to address three issues: (1) break the link between sourcing minerals and conflict financing; (2) create conditions that enable responsible in-region sourcing in order to support livelihoods and drive local development; and (3) establish or partner with incountry resources to achieve meaningful and long-standing change.

Regulation alone cannot achieve the three goals outlined above. To have a real impact, deliver positive changes on the ground, and prevent economic boycott of high-risk regions, it is imperative that the Regulation is accompanied by strong supporting measures. In this context, the European Private Public Partnership (EPPP) for Responsible Mineral Sourcing will focus on concrete actions designed to complement existing regulation and initiatives, at the same time helping to implement and enforce the EU scheme. Priorities include fostering knowledge leadership; expanding existing initiatives; securing the commitment of more downstream sectors; planning and implementing effective in-region projects; and collectively defining conflict-affected and high-risk areas.

We strongly believe that the EU proposal for a Regulation on responsible sourcing of minerals is aimed at the right part of the supply chain – upstream mining and refining entities. That is the point in the supply chain where “Red Flags” for non-conflict-free sourcing can effectively be identified.

However, options of risk mitigation on an individual company level (in the downstream, but also in the upstream segment of the supply chain) are very limited. A multi-stakeholder approach involving governments, civil society groups as well as all minerals supply chain actors is required in order to successfully address issues especially in regions with higher risks related to mineral trade.

There might be increased risk of smuggling, tax avoidance, human rights abuses, or involvement of armed groups in such regions. Downstream companies as well as many smelters/refiners have demonstrated a clear commitment to source responsibly. However, this is only possible when supporting frameworks enabling responsible in-region sourcing, such as traceability schemes, have been developed.

If such schemes are not in place, sourcing from volatile regions will be impossible for smelters and other responsible supply chain actors. This in turn could create a de-facto embargo for minerals and metals originating from any volatile region that could be deemed a crisis or conflict area.

We believe that the EPPP would be a good platform for promoting in-region schemes in volatile countries and therefore, creating the conditions for responsible sourcing of minerals. Our goal is to continue to improve our due diligence activities that are now part of our sourcing processes and to mitigate risks identified upstream as a part of a strong multi-stakeholder coalition offered by the EPPP.

To make the EPPP a success, information, experience and resources are needed. Therefore, we encourage industry across the board, civil society groups, European regulators and other member states to support and actively contribute to the EPPP.

We urge all involved in the trilogue negotiations to take this into consideration and put in place effective and workable rules that have global impact.

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