RESPONSIBLE SOURCING REVIEW COMMITTEE
NEWSLETTER
NOVEMBER 2024
The London Platinum and Palladium Market (the “LPPM”), through its Responsible Sourcing Review Committee (the “RSRC”), announced the launch of a consultation process over the drafting of Version 5 of its Responsible Platinum / Palladium Guidance (the “Guidance”) in March 2024.
The consultation process and drafting are now complete. The RSRC is deeply grateful to all who have articipated in this process, in particular those Assurance Providers and Refiners of Platinum Group Metal (“PGM”) who devoted considerable time and effort to reviewing the draft and submitting their comments and suggestions. It is no exaggeration to say that Version 5 would lack validity without their help.
Two of the main targets that the RSRC announced in April have been addressed in the new Guidance:
1. Inclusion of Rhodium
Following the successful introduction of Sponge Accreditation Rules for Rhodium (Sponge Accreditation Rhodium List), the LPPM has included it in the new version of its Guidance. The fifth version of the Guidance for the LPPM Responsible Sourcing Programme is therefore the first to be called the Responsible PGM Guidance (the “RPG”).
2. Increased Due Diligence on secondary supply.
The March 2024 Newsletter alluded to media coverage of events that highlighted the risk to the PGM industry and PGM Refiners of stolen PGM-containing material, including that which had been acquired through autocatalytic converter theft. The RPG still follows the Five Step Risk Assessment model of Annex II of the OECD Due Diligence Guidance - Model Policy for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (“CAHRAs”)¹. However, the RSRC recognises that PGM Refiners must recognise and assess the risks to their business and reputation of metal that has not been sourced from recognised CAHRAs yet has been involved in criminal activity. The RPG therefore requires that PGM Refiners should consider adding to their Responsible Sourcing Supply Chain policy a statement underscoring their commitment to performing Enhanced Due Diligence and eliminating full or part payment of cash for autocatalytic material.
As highlighted in the March 2024 Newsletter, the RPG informs PGM Refiners that all supply and suppliers must be evaluated for potential High-Risk issues and that closed-loop and toll-refined material, or that which is sourced from subsidiaries, joint-venture companies, traders and banks, for example, are not exceptions.
¹OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas 2016 / Third Edition Annex II
RESPONSIBLE SOURCING REVIEW COMMITTEE
Consequent on the consultation process for the drafting of the RPG, the RSRC has decided to continue with the requirement that Reasonable level audits should be performed at least every three years.
The RSRC recommends that PGM Refiners discuss the RPG with their Assurance Providers and move to implement its recommendations during 2025. The audit requirements will become mandatory from 1 January 2026.
LPPM RESPONSIBLE SOURCING REVIEW COMMITTEE
12th November 2024