This report evaluates the Regional Certification Mechanism (RCM) of the International Conference of the Great Lakes (ICGLR), and makes recommendations for the RCM’s improvement. This includes the following components of the RCM: (1) mine site inspections and certification, (2) chain of custody (CoC) systems, (3) export and certification; (4) mineral tracking database, (5) independent third party audits, and (5) the independent mineral chain auditor (IMCA).
Research was conducted between October–December 2015 and included a thorough literature review; desk-based interviews with over 40 stakeholders (including ICGLR staff, relevant national government officials; private sector stakeholder; industry associations, donor representatives and civil society) as well as in-country fieldwork in the DRC and Uganda.
The results conclude that the RCM provides the ICGLR with a solid basis for improved public sector governance of the tin, tantalum and gold (3TG) mineral trade in the Great Lakes Region. The assessment however, also concludes that the RCM and associated appendixes – which total more 155 pages – is in inconsistent, duplicative, overly complex, onerous and costly to implement and lacks a sustainable plan for funding. As a result, the credibility of the system itself, particularly from the perspective of downstream end users, is in urgent need of strengthening.
It is important to note that the drafting of the RCM manual in 2010/2011 was based on an amalgamation of the German Federal Institute for Geosciences and Natural Resources (BGR) Certified Trading Chains (CTC) program and the OECD’s Due Diligence Guidance. This combination may have suited Rwandan circumstances, but is far less suited to the circumstances in Eastern DRC where 3TG supply chains are orders of magnitude more complex, and state capacity far more limited.
Furthermore, the OECD Due Diligence Guidance is intended to provide a model for the implementation of due diligence by the private sector. In contrast, the CTC provides a model for state and donor-funded projects implementing certification schemes, primarily by BGR. The blending of the two models in the RCM has resulted in an unwieldy manual that confuses private and public sector responsibilities. It also means the forms used for certification are complicated and unclear. A single model ICGLR certification form – developed on the basis of a streamlined manual – would go a long way to improving the prospects of more cost effective and credible mine site certification. In particular, the OECD Due Diligence Guidance should provide the basis for that streamlining. The ‘progress criteria’ that form part of the present RCM should be made an individual member state responsibility, or made part of the formalization tool of the ICGLR’s RINR.
The need to clarify the boundaries of private and public sector responsibility has also become increasingly clear as there is an unresolved issue regarding the status of private sector audits for the ICGLR, and the status of RCM audits for the private sector in fulfilling its due diligence obligations. The report concludes now is the time to streamline and harmonize the RCM on the basis of OECD Guidance, clarify private and public sector responsibilities, and increase the RCM’s credibility and cost effectiveness.
Additionally, it is critical to ensure the RCM is self-financing before a deadline is imposed for regional implementation. Particularly given the falling international price of minerals, exporters are likely to resist a new levy on exports to fund RCM certification unless it is matched by a reduction in the cost of the iTSCi levy, or that of any other provider. Moreover, if RCM certification becomes mandatory in the region before audit harmonization has been established, this will in effect impose an audit duplication requirement on 3TG exporters in the region. We therefore recommend that private sector and RCM audits be harmonized – or mutually recognize one another – before making RCM audits mandatory. Finally, this report concludes if the RCM is to reduce conflict financing to any significant degree, it must be able to impact the trade in artisanal gold. The gold industry, however, appears unlikely to develop its own Chain of Custody tracking and due diligence assurance for ASM gold in the region. This makes government, private sector and NGO efforts at establishing the responsible gold pilot projects essential. Member States need to support such efforts and address the fiscal and legal circumstances to support a viable RCM conformant model for artisanal gold; likewise an ICGLR RCM ‘gold supplement’ should be drafted.
In sum, while significant progress has been in establishing various elements of the RCM, as with any system it must evolve and adapt if it is to remain credible and effective. To address these challenges, the report strongly recommends that Member States adjust certain aspects of the RCM’s scope and procedures and identifying a sustainable plan for the sustained financing of the mechanism into the future. The results of these recommendations are anticipated to yield significant improvements in the RCM’s effectiveness, efficiency, and credibility.