CAPAZ Passport to Markets Program

CAPAZ Passport to Markets Program

The Artisanal and Small-scale Gold Mining (ASGM) sector provides employment for an estimated 20 million people in the developing world, contributing to the livelihoods of over 100 million people, many of them living in Conflict and High Risk Areas (CAHRA). Due to the lack of resources, training and support, this economic activity suffers from widespread informality and is linked to various social and environmental problems.

Following the introduction of the OECD Due Diligence Guidance and legislation in the United States and European Union, the industry has been adopting mandatory and voluntary responsibility frameworks related to sourcing gold from CAHRA and beyond. Although industry stakeholders have expressed interest in contributing to economic and social development in conflict-affected areas through responsible sourcing of minerals, an operational and standardized risk management mechanism is necessary combined with support in capacity building, to make sourcing from ASGM viable for the industry.

We have observed that efforts to establish artisanal gold supplies in CAHRAs are frequently delayed by uncertainty about how the due diligence principles of OECD and others should be applied in an artisanal environment, and which supply chain partners are responsible for various information and assurances. This uncertainty increases the time and resources required for each new prospective source, and serves as a deterrent to downstream companies who might otherwise be willing to source from artisanal miners.

With initial support from the European Partnership for Responsible Minerals (EPRM), CAPAZ is therefore seeking to develop and pilot an open source and globally applicable Market Entry Standard for commercial engagement with artisanal and small scale gold mining, especially in Conflict Affected and High Risk Areas (CAHRAs). The standard will ensure conformance with OECD due diligence guidance, providing a “passport to markets” for artisanal miners while establishing efficiency and confidence for downstream companies and refiners seeking to engage with artisanal miners while meeting their due diligence responsibilities.

By establishing clear, appropriate, and widely-accepted criteria and expectations – and by demonstrating their efficacy through pilots – CAPAZ expects the Market Entry Standard to reduce the cost and time required for upstream and downstream partners to navigate these questions, while increasing the speed with which high quality due diligence can be conducted and new artisanal gold supply brought online.

The draft standard will be developed in the first half of 2017, with broad stakeholder consultation to take place in late 2017 and early 2018. At the same time, ARM and RESOLVE will pilot the standard in Colombia, to test the standard, and as a demonstration of Colombia’s ability to produce OECD-conformant minerals. For regular updates, please see the Market Entry Standard website.