Due diligence in Gold supply chain management

Welcome back Readers I’m Sivakami - A final year MBA student from Amrita School Of Business majoring in Marketing and operations. I have found my space to explore on the various verticals in the area of  Logistics and supply chain and of course not limited to theories and  empirical studies 😅. So come lets discover on our never ending territory 😇 

Exploring more on supply chain management, it was eye opening for me to know how important due diligence is. In fact, in today’s globally connected world, companies no longer simply compete company-to-company, rather they compete supply chain-to-supply chain. Modern companies are discovering that third-party relationships are a cornerstone of most of their day-to-day operations, providing them with a critical edge over their competitors. The supply chain risk is mitigated when companies take effort to investigate potential business partners or the entities in the supply chain. 

Recently I read an article which said ‘Natural resources organisation Impact and the European Union (EU) have successfully implemented a traceability and due diligence system from mine site to the international market for artisanal gold from Côte d’Ivoire as part of the Just Gold project’. This provides the evidence of traceability supporting the artisanal gold miners as well as enables international buyers to track their gold to the pit it was mined at. The other motive to implement the project was to support private sector actors to complete due diligence on their supply chain to identify, mitigate and publicly report on risks such as human rights abuses, forced and child labour and corruption.

The first responsible export of artisanal gold comprised a 755 ingot of gold mined in Dabakala and was traced to Abidjan, where the exporter is located, with full due diligence completed on the supply chain. The Just Gold project has continued to operate throughout the Covid-19 pandemic, during which time artisanal mining communities have been severely affected, as prices paid for gold have dropped, while the cost of living has drastically increased.

Due diligence system guaranteed that the cooperative and its members are paid a fixed price, which is calculated based on a method which minimises the impact of local price fluctuations in times of pandemic. Adding to it this offered Côte d'Ivoire unexplored opportunities for economic activity and development. The consumer market nowadays pays more attention to the conditions in which the products are manufactured and when they purchase gold, they want to be sure it isn’t tied to illicit trade or human rights violations.

On the whole, Ivorian government recognises the importance of due diligence in contributing to sustainable development and increasing artisanal gold production, and is taking important steps in this direction. This is even more important under new European regulations coming into force in 2021 where European importers of minerals such as gold will be required to complete due diligence on their supply chain.

Happy Reading from Sivakami :)