Code of Risk-mitigation for ASM engaging in Formal Trade
- A tool that makes it easier for buyers to apply due diligence in the sector, with a focus on a continuous development and improvement.
- A gateway into the formal market for artisanal and small-scale miners, focused on the mitigation of the main artisanal and small-scale mining (ASM) risks.
- A code of progressive compliance for ASM producers. It adopts the definitions of “ASM” and “legitimacy” offered in the OECD Due Diligence Guidance.
- Intended to be globally applicable; no areas are excluded.
- Designed to apply to artisanal gold in any tradable form. However, it can be adapted for other minerals.
- Closely aligned with the OECD Due Diligence Guidance. Modules 3 and 4 are directly linked to the risks outlined in “Annex II” of the Guidance.
- An open-source code released under the Creative Commons CC BY-SA 4.0 license. Just like any other open-source standard, CRAFT may be used by any stakeholder in the ASM supply chain, as well as by development organizations, among others.
Opinions about CRAFT: Passport to Markets
“For global minerals supply chains, change and market engagement is most critically needed in the places that face the greatest challenges. CRAFT is innovative as a multi-stakeholder vetted, open source tool to help companies support the economies of artisanal communities, while following good risk management practice and ensuring they are not contributing to illicit trade or human rights abuses.”
“CRAFT is an important stepping stone that will further enable due diligence for ASM gold supply chains globally. As CRAFT is based on the OECD Due Diligence Guidance, it will be included as a key reference in the Responsible Minerals Assurance Process to encourage companies to use the CRAFT process and reports in their sourcing practices.”
“CRAFT comes at the perfect time as UN Environment and its partners are embarking on the implementation of a 45mil$ GEF Programme on Artisanal and Small-Scale Gold Mining in which formalisation is one of 4 components.”
“The LBMA was actively engaged in developing the CRAFT Standard and fully supports initiatives enabling refiners to establish responsible, sustainable supply chains across all forms of mining.”
“The EPRM is proud to have financed the innovative and promising CRAFT Code and believes it has the potential to bring about a systemic change for responsible mineral supply chains that EPRM believes in. The CRAFT Code is well aligned with the key objectives of the EPRM since CRAFT is facilitating market access for artisanal and small-scale miners and enables companies to source from ASM while following good risk management practices. The EPRM will continue its engagement and will further support the implementation of CRAFT.”
“We are very excited to see the CRAFT Code being launched now, as our project mines – as well as many other ASM mines – can now be recognized as operating responsibly. For miners, this new code can provide the very necessary gateway into the formal market. Until now this was only possible through international certification against standards which are difficult to achieve for many ASM miners, as it requires significant financial investments, time and training.”
“The Swiss Better Gold Association has been member of the CRAFT advisory group since its inception. The aim of this approach is to make possible the entry of early stage ASMs into the gold value chains and it goes hand in hand with SBGA Sourcing Criteria released back in 2017. This new CRAFT tool proves once more that real impact and true positive advances within ASM sector are only possible if stakeholders are involved into the process at a very early stage. We look forward working together with ARM in implementing this new tool on the ground.”
“Our pilot with a women’s mining association in Colombia demonstrates the feasibility of entering into formal trade through better collective organization and performance. The experience illustrates the positive impacts of accessing markets, such as better revenues and livelihood conditions. The version 1.0 of the CRAFT Code creates a great array of possibilities of support to formalization processes and fostering better livelihoods for artisanal miners globally, extending this initial experience in other environment and producing countries.”
“We see CRAFT as one of the cornerstones to drive responsible ASM mining and sourcing. It is the first industry tool that empowers miners to understand the market sourcing and due diligence requirements, assess their practices and how to address potential gaps, so that they can comply and report conformance with those needs, while providing supply chain actors with the instrument to engage with miners. It will facilitate due diligence by all along the value chain. Using CRAFT schemes, we will be able to support mines improve their practices so they can access global market”.
“CRAFT brought everyone to the table with the common goal of creating simplified compliance. It is a think tank of regulators, compliance experts, companies, and global miners. Whether it will be utilized in South America, Africa or Central America; CRAFT considered you. It is a comprehensive and considerate approach to compliance.”
CRAFT implementers wish to obtain gold from ASM to support the development of miners (and their communities) who live off of this trade.
The implementation of CRAFT will involve a shared responsibility between CRAFT implementers and ASM producers. CRAFT does not put the burden of third-party auditing on miners, but instead facilitates the application of due diligence. Independent audits by third parties are still the responsibility of mineral buyers.
In line with the growing public interest in improving transparency and the application of standards in supply chains, the industry has increasingly adopted voluntary and mandatory accountability frameworks related to the supply of gold and other minerals. However, there are no widely accepted criteria or procedures in relation to the manner in which these due diligence regulations should be applied to artisanal and small-scale mining (ASM) supply chains, in a way that takes the specific opportunities, conditions and challenges of the sector into account.
Some responsible supply standards, such as Fairmined, encompass much more than these due diligence aspects, because they involve elite standards with high organizational, social and environmental performance requirements and count with an incentive-based certification process (such as additional premiums for complying with stringent demands).
However, most artisanal miners around the world are unable to attain or get started with the process complying with the requirements established by these certifications without a significant time, resource, training and support investment.
The proposed solution: the CRAFT Code
Financed by the European Partnership for Responsible Minerals, ARM and RESOLVE have developed the Code of Risk mitigation for ASM engaging in Formal Trade (CRAFT). This code facilitates the relationship between the gold industry and the ASM sector, since it is a detailed tool that enables the application of the OECD Due Diligence Guidance while laying out a progressive path toward the improvement of industry practices.
CRAFT takes this guidance as a starting point, but instead of being limited to it, it considers further aspects toward the improvement of conditions in ASM.
This code was developed as per the ISEAL Standards, guaranteeing that its creation was accomplished by means of a participative, diverse and planned process that involved all levels – from producers to the last stakeholders in the supply chain. In order to guarantee this, as well as its legitimacy, two governance groups were established for the Code: CRAFT Advisory Group and CRAFT Technical Committee.
The creation of CRAFT involved a two-month consultation period with various actors of the gold supply chain with the purpose of accomplishing the final 1.0 version of the CRAFT Code. Additionally, a second public consultation is currently planned, thereby satisfying the two rounds of consultation as recommended by ISEAL.
What is due diligence?
Due Diligence describes an ongoing process to identify, evaluate, report, mitigate, and monitor the risks present at a mining site or within the sector (such as legal risks or the lack of human rights). The miners must demonstrate that they have made reasonable efforts, in good faith and toward continuous improvement, addressing the risks with the support of local, national, and international players.
Key components of the CRAFT Code
- 1. Scope and affiliation
- 2. Legitimacy
- 3. Immediate conformance
- 4. Conformance (6-month mitigation)
- 5. Continued improvement
- Scope: Artisanal and Small-scale Mining
- Required for membership: General datasheet and description
- Contact person
- Diagram and description of internal supply chain
- Forced labor
- Worst forms of child labor
- Sex violence and gender discrimination
- Worst human rights violations
- Influence of armed stakeholders
- War crimes
- Support to non-government armed forces – extortion
- Involvement with public or private security forces
- Money laundering
- Bribery / false representation of mineral source
- Tax, duty or royalty evasion
- Handling of mercury and water
- Dumping and contamination of water sources
- Mining health and safety
- Children’s and women’s rights
- Rights to the mineral and the land
- Peaceful coexistence with other production activities
- Organizational strengthening
*additional modules on non-OECD medium / low risks will be added in phase 2 of the project – late 2019.
As part of the framework of the CAPAZ project, a pilot is being implemented in Colombia involving two groups of miners in the municipalities of Suárez and La Llanada, with the purpose of accomplishing gold sales under the CRAFT Code. From now on, more industry stakeholders are expected to start applying it as part of their supply and project policies.
If you are a member of an organization or wish to implement the CRAFT Code, you need to follow the steps outlined in the Creative Commons CC BY-SA 4.0 license
And if you want to learn more, e-mail us at: firstname.lastname@example.org