Responding to Risks in OECD Due Diligence Guidance
Step 3 of
the OECD Due
Diligence Guidance for
responsible sourcing
of minerals from
conflict-affected and
high-risk areas
(OECD Guidance)
Design and
implement a
strategy to
respond to
identified risks
Content
1.
Steps to respond to risks
2.
Risk mitigation
Step 3 of the OECD DDG: Respond to
risks
How can you respond to risks?
•
Report findings
of the risk assessment to senior
management.
•
Devise and adopt a
risk management plan (to
mitigate risks).
•
Implement the risk management plan.
•
Fact and risk assessment for risks requiring
mitigation or after change of circumstances.
Possible mitigation measures (risk
management)
•
CONTINUE
the relationship with a supplier
throughout the course of risk mitigation efforts.
•
TEMPORARILY SUSPEND
the relationship while
pursuing ongoing risk mitigation.
•
Or, as a last resort,
DISENGAGE
with the
supplier either after failed attempts at mitigation,
or where the enterprise deems mitigation not
feasible, or because of the severity of the
adverse impact.
If you are an upstream company
•
Enhance engagement with suppliers.
•
Enhance engagement with internal system of
transparency, information collection and control
of supply chain (establish a chain of custody and
traceability systems – check the
Due Diligence
Toolbox
on the Due Diligence Ready! Portal for
suggestions).
•
Segregate and secure shipments.
•
Incorporate the right to conduct unannounced
spot-checks on suppliers.
If you are a downstream company
•
Identify the smelters or refiners in your supply chain.
•
Include confidential supplier disclosure requirements into
supplier contracts or use confidential- information sharing
system (check the
Due Diligence Toolbox
on the Due
Diligence Ready! Portal for suggestions).
•
If a red flag is identified in a refiner’s or smelter’s suppliers:
consider mitigation measures in slide 4.
•
If a refiner or smelter has not responded to risks as per risk
management: consider mitigation measures in slide 4.
Thank you
For further information visit the
Due Diligence Ready! portal
Develop and implement a strategic response to identified risks in accordance with the OECD Due Diligence Guidance for responsible sourcing of minerals. The process involves reporting findings to management, devising a risk management plan, implementing the plan, and assessing ongoing risks. Mitigation measures include continuing, suspending, or disengaging supplier relationships based on mitigation success. Upstream companies focus on supplier engagement and supply chain transparency, while downstream companies identify and address risks in their supply chain. Visit the Due Diligence Ready! portal for more information.
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Presentation Transcript
Step 3 of the OECD Due Diligence Guidance for responsible sourcing of minerals from conflict-affected and high-risk areas (OECD Guidance) Design and implement a strategy to respond to identified risks
Content 1. Steps to respond to risks 2. Risk mitigation
Step 3 of the OECD DDG: Respond to risks How can you respond to risks? Report findings of the risk assessment to senior management. Devise and adopt a risk management plan (to mitigate risks). Implement the risk management plan. Fact and risk assessment for risks requiring mitigation or after change of circumstances.
Possible mitigation measures (risk management) CONTINUE the relationship with a supplier throughout the course of risk mitigation efforts. TEMPORARILY SUSPEND the relationship while pursuing ongoing risk mitigation. Or, as a last resort, DISENGAGE with the supplier either after failed attempts at mitigation, or where the enterprise deems mitigation not feasible, or because of the severity of the adverse impact.
If you are an upstream company Enhance engagement with suppliers. Enhance engagement with internal system of transparency, information collection and control of supply chain (establish a chain of custody and traceability systems check the Due Diligence Toolbox on the Due Diligence Ready! Portal for suggestions). Segregate and secure shipments. Incorporate the right to conduct unannounced spot-checks on suppliers.
If you are a downstream company Identify the smelters or refiners in your supply chain. Include confidential supplier disclosure requirements into supplier contracts or use confidential- information sharing system (check the Due Diligence Toolbox on the Due Diligence Ready! Portal for suggestions). If a red flag is identified in a refiner s or smelter s suppliers: consider mitigation measures in slide 4. If a refiner or smelter has not responded to risks as per risk management: consider mitigation measures in slide 4.
Thank you For further information visit the Due Diligence Ready! portal
