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London Metal Exchange launches consultation on the introduction of responsible sourcing standards

Author: London Metal Exchange, Published on: 23 April 2019

"LME launches consultation on the introduction of responsible sourcing standards across all listed brands", 23 April 2019.

...The London Metal Exchange (“LME”) today launched a formal market-wide consultation on proposed rules for the application of responsible sourcing principles to all LME-listed brands. These rules build on the strong engagement with market stakeholders to the LME’s October 2018 position paper...

The LME’s proposed rules will require all of its listed brands to undertake a Red Flag Assessment, based on the Organisation for Economic Co-operation and Development (“OECD”) Guidance, by the end of 2020. If this assessment demonstrates potential responsible sourcing red flags, then that brand will be classified as a Higher-Focus Brand and will also need to be audited as compliant with an OECD-aligned standard by the end of 2022...

The LME’s requirements are consistent with the OECD Guidance...the LME’s proposals adopt a broad interpretation of the core OECD requirements in certain key respects. In addition to transparency standards, these requirements include a more comprehensive set of potential risks which may trigger red flags, as well as requiring ISO, OHSAS or equivalent standards for environmental management and occupational health and safety...the Red Flag Assessment will require producers to confirm whether they facilitate the disclosure of potential financial crime and corruption risks under the Extractive Industries Transparency Initiative (“EITI”).

...the LME has allocated an initial contribution of US$2 million, from the proceeds of fines levied on the LME market, to charitable initiatives in the responsible sourcing sector...

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