OECD handbook reinforces environmental protection in raw material

Drohnenansicht eines kontaminierten, giftigen Wasserlaufs in Geamana, RumänienClick to enlarge
The procurement of minerals could result in environmental damage

Drone view of a contaminated, toxic water stream in Geamana, Romania

Source: belyaaa /Adobe Stock

The new OECD Handbook on Environmental Due Diligence in Mineral Supply Chains is a milestone for environmental protection in global value chains. For the first time, a clear description is given of how companies can identify, assess and prioritise environmental issues at the beginning of their global supply chains and take measures to prevent, mitigate or find solutions to arising problems.

Mining is indispensable for the energy transition as well as achieving the United Nations' Sustainable Development Goals, but it is a high-risk sector marked by human rights infringements  and  severe environmental pollution. Many companies, particularly in the automobile and engineering sectors, are dependent on metals from global supply chains. At the same time, they also consider themselves obliged to meet stringent social expectations for responsible business conduct.

These are increasingly reflected in statutory requirements such as the German Supply Chain Act or the new EU Battery Regulation: Companies are now legally obligated to identify and counteract human rights abuses and environmental problems within their supply chains. Companies are also expected to account for such and  together with their business partners, to contribute to sustainable development by continously improving their performance on such matters.

What this specifically means in terms of safeguarding human rights is already described in a multitude of standards and handouts, as well as being increasingly integrated in corporate procurement practice. In the light of the triple planetary crisis  of global warming, loss of biodiversity and pollution, there is severe pressure to act, but in environmental terms  very little practical guidance has been available. This gap is now closed off with the new OECD Handbook for Environmental Due Diligence in Mineral Supply Chains.

The handbook describes environmental aspects in the extraction and processing of mineral and metallic raw materials. It aims to support companies within the “downstream” part of global supply chains (manufacturers of final products and semi-finished products, metal traders, metal exchanges, retailers) to integrate environmental aspects within their procurement and supply chain management. It also aims to support companies within the “upstream” part (mining, raw material traders, metal works, refineries and recyclers) to fulfil the expectatios of their “downstream” clients.

Over four chapters, it describes why risk-based environmental due diligence for companies in global value chains are important, what adverse environmental effects may occur in the upstream part, and how environmental aspects can be taken into account with step-by-step implementation of the 6-stage OECD due diligence framework.

Development of the handbook is as a result of a policy recommendation from the German Environment Agency. The Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) has initiated development of this handbook by the OECD Center for Responsible Business Conduct as part of the federal government’s raw materials strategy. The German Environment Agency (UBA) and the Federal Institute for Geosciences and Natural Resources (BGR) have accompanied and provided specialist support for the international multi-stakeholder process at the OECD.

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