IUMI facilitates the dialogue and raises awareness concerning environmental, social and governance issues within the maritime industry that have direct impact on marine insurers, focusing on the new regulatory requirements related to conflict minerals.
Accordingly, the European Union launched the Regulation 201/821 which places the framework for EU based importers of certain metals and minerals originating from conflict-affected and high-risk areas (CAHRAs).
To remind, the EU – the Conflict Minerals Regulation aims to help stem the trade in four minerals – tin, tantalum, tungsten and gold – which sometimes finance armed conflict or are mined using forced labour.
The EU regulation aims to:
- Ensure that EU importers of 3TG (tin, tungsten, tantalum and gold) meet international responsible sourcing standards, set by the Organisation for Economic Co-operation and Development (OECD)
- Ensure that global and EU smelters and refiners of 3TG source responsibly
- Help break the link between conflict and the illegal exploitation of minerals
- Help put an end to the exploitation and abuse of local communities, including mine workers, and support local development.
IUMI notes that the key requirements will come into force on January 1st, 2021.
In the meantime, importers, traders, smelters and refiners of the following materials have to carry out obligatory due diligence checks on their suppliers and origin of the products:
- Concentrates and ores containing 3TG (tin, tantalum, tungsten and gold).
- Metals containing or consisting of 3TG.
Importers should also declare minerals and/or metals for release and circulation in the EU. This includes companies which are not legally established within the EU.
Downstream users who do not directly import do not fall under the due diligence obligation. On the contrary, smelters and refiners who exercise any form of extraction or metallurgy processing aiming at producing a metal from a mineral are required to comply with the due diligence obligations.
These obligations can be summarised as follows:
- Adopt a supply chain policy for 3TG and communicate this to suppliers and the public. This includes risk assessment, a strategy to respond to identified risks, and third-party independent audits in the supply chain.
- Implement due diligence standards as per OECD guidance.
- Senior management to establish strong company management systems to control and hold records of the process, and to report about the process.
- Incorporate appropriate contractual provisions in the supply chain.
- Provide information and disclosure to relevant authorities.
- Establish a complaint procedure for stakeholders, including access to an external expert.
With the EU regulation coming into force soon it is recommended that marine insurers check with concerned insureds if due diligence procedures will be in place
… IUMI concludes.
