Hide Message

Updating the Resource Centre Digital Platform

The Business & Human Rights Resource Centre is at a critical point in its development. Our digital platform is home to a wealth of information on business and human rights, but hasn’t had a visual refresh for a number of years.

We will soon be updating the site to improve its usability and better serve the thousands of people that use our site to support their work.

Please take an advance peek at our new look, and let us know what you think!

Thank you,
Alex Guy, Digital Officer

Find Out More Hide Message

London Metal Exchange will only allow trading of responsibly sourced metals by 2022

Entrance of the London Metal Exchange

The London Metal Exchange (LME) announced on 23 April 2019 that it will be introducing responsible sourcing standards across all brands, requiring all metals traded on the exchange to be responsibly sourced from 2022 onwards. This announcement came after civil society campaigning for enhanced transparency requirements and increased international focus on mineral sourcing, in particular the risks of child labour from cobalt sourced in the Democratic Republic of Congo. The LME is looking to implement its new rules through a phased approach. The proposed rules will require all brands to undertake a Red Flag Assessment based on the OECD guidance by 2020, and require brands considered particularly at risk to be audited as compliant with an OECD-aligned standard by 2022.

In this story learn more from the LME's consultation announcement and press coverage of the new rules.

Get RSS feed of these results

All components of this story

23 April 2019

Global Witness statement on launch of London Metal Exchange responsible sourcing roadmap

Author: Global Witness

...Sophia Pickles, supply chain investigator for NGO Global Witness said: 

“Global Witness welcomes responsible sourcing rules for LME brands and particularly requirements for brands to publicly report on financial crime and corruption risks in line with EITI and OECD standards, and on named individuals directly responsible for supply chain due diligence within their supplier networks...The LME’s final responsible sourcing rules should not turn around lists of conflict-affected and high-risk areas but rather ensure that LME-listed brands and their producers have processes in place that can spot and respond to risk wherever it arises...

The metal sector must be more ambitious in its endeavour to demonstrate its responsible business: named company directors already sign off on reports under money-laundering regulations: why shouldn’t the same apply to supply chain due diligence reports, including for LME brands?...

The LME must also go further when it comes to tackling the impacts of its brands on the planet. The Exchange must require companies to report on environmental and climate risk, too...

Finally, we caution the LME against over-reliance on industry schemes as a means of demonstrating responsible business...Our research, and that of a 2018 OECD study, consistently shows that membership of or coverage by an industry scheme does not guarantee that an entity is undertaking responsible sourcing in practice...the LME should focus on the individual, independent annual reporting published by brands and producers, and use this as the means of scrutinising and testing corporate efforts to identify and respond to supply chain risks...

Read the full post here

23 April 2019

LME to ban metal tainted by child labor or corruption

Author: Zandi Shabalala, Reuters

The London Metal Exchange (LME) could ban or delist brands that are not responsibly sourced by 2022 under an initiative launched on Tuesday to help root out metal tainted by child labor or corruption. But the LME, seeking to avoid overly punishing small mining brands to the benefit of larger miners such as Glencore, said it would not single out cobalt and tin for accelerated auditing...The proposal is the largest step yet by the LME, the world’s biggest market for industrial metals, to clean up global supply chains and marks a shift from the exchange’s traditional role of requiring its suppliers to meet only metallurgical standards...the exchange would by 2022 audit brands identified as higher-risk with a view to banning them if they do not comply with requirements on responsible sourcing...Brands would be forced to publish fully all of their supply-chain information by 2024, the LME said...

Read the full post here

23 April 2019

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

Author: London Metal Exchange

"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...

Read the full post here

23 April 2019

UK: Pressure from investors and consumers pushes London Metal Exchange to introduce new responsible sourcing rules

Author: Neil Hume, Financial Times

"LME to shake up rules on responsibly sourced metals", 22 April 2019.

The London Metal Exchange will only allow responsibly sourced metals to be traded from 2022, as rising demand from consumers and investors for sustainable products prompts one of the biggest shake-ups in the organisation’s history...The plans, which will be announced on Tuesday, mark a significant departure from the exchange’s history in which metallurgical standards have determined the brands of metals eligible to trade on the LME, the world’s biggest marketplace for the likes of copper, zinc and aluminium.

However, responsible sourcing has come into focus after it emerged in 2017 that some of the cobalt — a key material in the batteries of smartphones and electric vehicles — traded on the LME could have been mined by children in the Democratic Republic of Congo...

The overhaul of the rules will require all producers to take a “Red Flag” assessment, and those brands considered by the LME to be riskiest must then adopt an OECD-aligned responsible sourcing standard by the end of 2022. If they fail to, they risk being delisted from the exchange...Initial proposals released by the LME in October were sharply criticised by more than a dozen campaign groups and non-governmental organisations, which called for more achievable timelines, an assessment of corruption risks and a transparency requirement over the sourcing of metals...To ensure corruption and bribery risks are captured by the new rules, producers will have to confirm whether they “facilitate disclosure of financial crime and corruption risks” under the Extractive Industries Transparency Initiative...However, the LME has stopped short of adopting broader UN principles on human rights and OECD guidelines for multinational enterprises...

For companies such as Rio Tinto and Rusal, which produce low-carbon aluminium...the LME was looking at ways those brands could be identified in its system...

Read the full post here