In a previous blog post, we explained why the Conflict-Free Gold Standard is important and how it benefits both gold mining companies and the regions in which they operate.
To provide guidance for companies on how to mine gold responsibly – especially in high risk regions – the Conflict-Free Gold Standard can be generally described as a five-part process.
First and foremost, the geographic area where gold operations are to take place is assessed for international sanctions and civil conflict.
This applies to the company proposing to extract and refine gold in the area. It must demonstrate that it has the right policies in place (security, commitment to human rights, community engagement, whistle-blower programs, and more) to operate responsibly in the area.
This refers to tracking the gold produced in the area. The purpose of the commodity assessment is to create appropriate management systems to ensure that the gold is secure, that theft is minimized, and that transporters of the gold are vetted and committed to conflict-free gold.
Externally Sourced Gold Assessment
It isn’t common, but sometimes gold from somewhere else is brought onto the site in question. This part of the CFGS ensures that externally sourced gold is also conflict-free.
Statement of Conformance
Finally, the mining company makes a declaration to refiners and other gold industry members that they comply with the CFGS.
Corporate transparency is required to remain compliant with the CFGS. While the company is operating in the region, they must adhere to 3rd party auditing and transparent public disclosures. Because of this, if a company becomes non-conformant with the CFGS, every other member of the gold supply chain is notified – which can seriously impact business and profitability. Fortunately, miners, refiners, and international NGOs all describe the CFGS as a major step forward in providing trust and transparency in the gold supply chain.