Responsible Mineral Supply Chain Policy

1. Introduction

As a raw material to its refining process, GG Refinery sources gold exclusively from Tanzania in which the refinery is located. With the aim to build long relations with our suppliers, we as GG Refinery conduct due diligence on our suppliers to ensure conformity to our supply chain related  procedures and policies. Hence, considering the Organization for Economic Co-operation and Development (OECD) Five steps Framework Due Diligence Guidance for Minerals (OECD Due Diligence 5 Step Framework). GG Refinery is committed to ensuring that the supply chain is free of any mineral which was gathered for the support or benefit of armed conflict groups or involving serious abuses of human rights.

In addition, abusive practices from public or private security forces or support to non-state armed groups will not be tolerated. As part of our supply chain due diligence, GG Refinery shall be watchful for and assess the severity of various risks as recommended in the Organization for Economic Co-operation and Development (OECD) Guidance Annex II Model Supply Chain Policy (OECD Due Diligence Guidance) and as outlined in the London Bullion Market Association (LBMA) Supply Chain Standards. (LBMA Responsible Sourcing Guidelines).

Specifically, this policy will address:

  •  Serious abuses associated with the extraction, transport, or trade of minerals.
              • Any forms of torture, cruel, inhuman, and degrading treatment.
              • Any forms of forced for compulsory labour.
              • The worst forms of child labour.
              • Other gross human rights violations and abuses such as widespread sexual violence.
              • War crimes or other serious violations of international humanitarian law, crimes against humanity or genocide.
     
  • Direct or indirect support to non-state armed groups.
  • Direct or indirect support to public or private security force.
  • Bribery and fraudulent misrepresentation of the origin of minerals.
              • Money laundering.
              • Non-payment of taxes, fees, and royalties to governments.

2.  Management

The Compliance Officer will be tasked with designing, updating, and implementing all facets of the Supply Chain Due Diligence Policy. As the Compliance Officer he/she has the authority to make decisions that might be contrary to those of other managers but that protect the company from vulnerability to criminal influence.

The company’s Chief Financial Officer is responsible to assess the Anti-Money Laundering (AML) program and risk management design and implementation annually for effectiveness and is duty bound to issue quarterly reports on the assessments and measures taken in compliance with the company directive.

Opportunities for obtaining sources of supply are generally presented to the company by representatives of our Sales Department based upon their contacts in the industry. Each of these contacts will have to be approved as qualifying under the terms of the company’s’ Supply Chain Policy.
All employees of GG Refinery will be required to participate in AML and Supply Chain Due Diligence training annually. Members of the sales, refining, office, lot entry, and senior management will participate in additional trainings as improvements and updates are made to our policies and procedures.

3. OECD Due Diligence

GG Refinery will refuse any material which we believe was obtained involving serious human rights violations or which benefitted or supported armed rebels or terrorist groups through illegal finance or other activities. This is in accordance with U.N. resolutions and Section 1502 of the Dodd Frank Act.

In addition, the (“OECD”) Organization for Economic Cooperation and Development has released guidelines for due-diligence for sourcing from Conflict-Affected and High-Risk Areas (“CAHRAs”). GG Refinery endorses their guidance and use their recommendations as the model for our own due diligence.

3.1     Serious abuses associated with the extraction, transport, or trade of minerals:

  1. While sourcing from, or operating in, conflict-affected and high-risk areas, GG Refinery will neither tolerate nor by any means profit from, contribute to, assist with, or facilitate the commission by any party of: –
  • Any forms of torture, cruel, inhuman, and degrading treatment.
  • Any forms of forced or compulsory labour, which means work or service which is exacted from any person under the menace of penalty, and for which said person has not offered himself voluntarily.
  • The worst forms of child labour.
  • Other gross human rights violations and abuses such as widespread sexual violence.
  • War crimes or other serious violations of international humanitarian law, crimes against humanity or genocide.

3.2     Risk management of serious abuses:

  1. GG Refinery will immediately suspend or discontinue engagement with upstream suppliers where GG Refinery identifies a reasonable risk that they are sourcing from, or linked to, any party committing serious abuses as defined in Section 3.1 (paragraph 1).

3.3     Direct or indirect support to non-state armed groups:

  1. GG Refinery will not tolerate any direct or indirect support to non-state armed groups through the extraction, Transport or export of minerals. “Direct or indirect support” to non-state armed groups through the extraction, transport trade, handling, or export of minerals includes, but is not limited to, procuring minerals from making payments to, or otherwise providing logistical assistance or equipment to, non-state armed group or their affiliates who:
  • Illegally control mine sites or otherwise control transportation routes, points where minerals are traded and upstream actors in the supply chain; and/or
  • illegally tax or extorted money or minerals at points of access to mine sites, along transportation routes or at points where minerals are traded; and/or
  • illegally tax or extort intermediaries, export companies or international traders.

3.4     Risk management of direct or indirect support to non-state armed groups:

  1. GG Refinery will immediately suspend or discontinue engagement with upstream suppliers where GG Refinery identifies a reasonable risk that they are sourcing from, or linked to, any party providing direct or indirect support to non-state armed groups as defined in Section 3.3 (paragraph 3).

3.5     Public or private security forces:

  1. GG Refinery agrees to eliminate, in accordance with Section 3.6 (paragraph 10), direct or indirect support to public or private security forces who illegally control mine sites, transportation routes and upstream actors in the supply chain; illegally tax or extort money or minerals at point of access to mine sites, along transportation routes or at points where minerals are traded; or illegally tax or extort intermediaries, export companies or international traders.
  1. GG Refinery recognizes that the role of public or private security forces at the mine sites and/or surrounding areas and/or along transportation routes should be solely to maintain the rule of law, including safeguarding human rights, providing security to mine workers, equipment, and facilities, and protecting the mine site or transportation routes from interference with legitimate extraction and trade.
  1. Where GG Refinery or any company in its supply chain contract public or private security forces, GG Refinery commits to or will require that such security forces will be engaged in accordance with the Voluntary Principles on Security and Human Rights. In particular, GG Refinery will support or take steps, to adopt screening policies to ensure that individuals or units of security forces that are known to have been responsible for gross human rights abuses will not be hired.
  1. GG Refinery will support efforts, or take steps, to engage with central or local authorities, international organizations, and civil society organizations to contribute to workable solutions on how transparency, proportionality and accountability in payments made to public security forces for the provision of security could be improved.
  1. GG Refinery will support efforts, or take steps, to engage with local authorities, international organizations, and civil society organizations to avoid or minimize the exposure of vulnerable groups, in particular, artisanal miners where minerals in the supply chain are extracted through artisanal or small-scale mining, to adverse impacts associated with the presence of security forces, public or private, on mine sites.

3.6     Risk management of public or private security forces:

10. In accordance with the specific position of the company in the supply  chain, GG Refinery will immediately devise, adopt, and implement a risk management plan with            upstream suppliers and other stakeholders to prevent or mitigate the risk of direct or indirect support to public or private security forces, as identified in Section 5                      (paragraph 5), where GG Refinery identifies that such a reasonable risk exists. In such cases, GG Refinery will suspend or discontinue engagement with upstream                      suppliers after failed attempts at mitigation within six months from the adoption of the risk management plan. Where we identify a reasonable risk of activities                          inconsistent with  Section 3.5 (paragraphs 8 and 9), we will respond in the same vein.

3.7     Bribery and fraudulent misrepresentation of the origin of minerals:

  1. GG Refinery will not offer, promise, give or demand any bribes, and will resist the solicitation of bribes to conceal or disguise the origin of minerals, to misrepresent taxes, fees and royalties paid to governments for the purposes of mineral extraction, trade, handling, transport, and export.

3.8     Money laundering:

  1. GG Refinery will support efforts, or take steps, to contribute to the effective elimination of money laundering where GG Refinery identifies a reasonable risk of money-laundering resulting from, or connected to, the extraction, trade, handling, transport or export of minerals derived from the illegal taxation or extortion of minerals at points of access to mine sites, along transportation routes or at points where minerals are traded by upstream suppliers.

3.9     Payment of taxes, fees, and royalties due to governments:

  1. GG Refinery will ensure that all taxes, fees, and royalties related to mineral extraction, trade and export from conflict-affected and high-risk areas are paid to governments and, in accordance with the company’s position in the supply chain, GG Refinery commits to disclose such payments in accordance with the principles set forth under the Extractive Industry Transparency Initiative (EITI).

3.10     Risk management of bribery and fraudulent misrepresentation of the origin of minerals, money-laundering and payment of taxes, fees, and                               royalties to goverments

  1. In accordance with the specific position of the company in the supply chain, GG Refinery commits to engage with suppliers, central or local governmental authorities, international organizations, civil society and affected third parties, as appropriate, to improve and track performance with a view to preventing or mitigating risks of adverse impacts through measurable steps taken in reasonable timescales. GG Refinery will suspend or discontinue engagement with upstream suppliers after failed attempts at mitigation.

4    Strategy

To ensure compliance with our commitment to a “non-conflict affected” and OECD aligned supply chain, GG Refinery has integrated the following due-diligence protocol for analysing and assessing our mineral suppliers and supplies:

4.1     Controlling the Origin of Minerals (Gold)

Currently GG Refinery sources unrefined Gold (in the form of Dore Bars) from ASM (Artisanal & Small-Scale Miners), Medium, as well as Large Scale Miners. For most of GG Refinery’s suppliers, their supply chain is simple, and the point of origin is the Gold Centers run by the Government of Tanzania where they purchase Doré from the public. GG Refinery will provide each potential supplier with a copy of our Supply Chain Due Diligence policy and requires the supplier to contractually obligate themselves to the policy and to develop similar policies of their own that are proportionate to the level of risk in their own supply chain.

When materials are received in a form that is not easily identifiable as Doré, GG Refinery requests that the customer provide additional information about their supply chain due diligence procedures including:

  • What form the material was originally in.
  • Information on chain of custody
  • A commitment from the supplier to provide additional documentation if requested by our auditors.

For some suppliers and certain materials this information may be requested for each transaction or at a minimum on an annual basis.

4.2     Record keeping and Retention of Documentation:

GG Refinery will maintain a formal record retention policy to assure current and future customers of our desire to be in compliance with market standards as they evolve. The final step for a customer/supplier checklist is to ensure that all documents are stored electronically. GG Refinery will maintain an electronic document capture system which allows us to “scan” or save documents into an individual customer/supplier file. These files are easily viewable by senior management and the office personnel tasked with assisting in the due diligence process. The files are encrypted to protect sensitive information and only few employees have the ability to edit the stored documents.

To ensure proof of verification GG Refinery will maintain, and secure due diligence documentation related to our compliance with our Responsible Mineral Supply Chain Policy for a minimum period of five years.

GG Refinery will maintain, and secure due diligence documentation related to our compliance with our Responsible Supply Chain Policy for a minimum period of five years to ensure proof of verification.

GG Refinery will also be utilizing a combination of QR codes, BlockChain Technology and proprietary software tracking systems that will identify each production and its relation to its source. No other refinery will have such an all-inclusive tracking system in place. To ensure a unique and reliable software tracking system, this is not outsourced neither is it from a third-party but rather implemented by an internal team within GG Refinery.

4.3     Know Your Materials Process:

Product Entry is a key part of GG Refinery’s Supply Chain Due Diligence process. All packages are opened in the Product Entry room under security surveillance cameras. All materials and paperwork are reviewed as per GG Refinery defined procedures and protocols to ensure that they are consistent with the materials described and weights given by customer before shipment.

The materials are then entered into the tracking system and assigned unique lot numbers. At this point our system may automatically determine, based on the material type, that additional due diligence is needed. Simultaneously the system will send out an automatic e-mail to alert the sales department and members of the compliance group that additional action is required to release the materials to be processed. The materials will then be set aside until the additional due diligence is completed.

The Product Entry personnel will also set aside other materials for which there are inconsistencies, or “Red Flags” identified. They will then notify the compliance officer of their concerns and the compliance officer will determine what steps need to be taken before the materials can be processed or if the materials need to be rejected. Based on the “Red Flags” determined during the basic due diligence process, GG Refinery will further engage in assessing each supplier and their respective supply chain.

Once it is determined that a supplier is sourcing from or transiting sourced materials through a High Risk location and not via the Gold Centers or directly from the mine sites, the GG Refinery will be required to evaluate the “Risks” as defined by the “OECD Due Diligence Guidelines”, specifically Annex II, and determine if the identified “Risks” represent actual risks in the supply chain.

Since GG Refinery is sourcing gold, and gold itself has a higher potential for money laundering, the company collects and evaluates AML and purchasing procedures from all “High-Risk” suppliers as per the AML/Know Your counterparty (KYC) compliance documentation and guidelines. GG Refinery also makes efforts to understand each government’s requirements for taxes, fees, and royalties related to the sourcing and export of gold and will collect evidence of such payments being properly remitted for all “High-Risk” customers/suppliers.

Given the complexity and historic business practices in the main markets in Africa, when GG Refinery cannot collect sufficient information to reasonably eliminate all risks through the above method, the company – should it prove commercially viable – can plan to visit the supplier’s sites and observe all parts of the supply chain to identify actual risks. Such plans will be formatted on a one-by one basis and executed by the Compliance Officer and/or by other members of management in conjunction with a member of the company’s staff who speaks the native language. Our representatives will visit and make observations about mines, traders, transporters, and transportation routes. When possible, they visit all mines in the area to obtain a yardstick as to the depth of the problem.

They will also collect photographic evidence and written documentation as well as collecting other evidence to support their observations and each case shall be reviewed by a team in the company consisting of – but not restricted to – the Compliance Department, The Security Manager and other Senior Managers.

4.4     Grievance Mechanism

Employees or any external stakeholders are encouraged to use GG Refinery’s grievance mechanism. This facilitates ease in voicing out concerns about any identified risks in the supply chain. Any such reports are strictly confidential and handled discreetly i.e., anonymously.

Contact Information:

Should you have any questions or concerns regarding this policy or its implementation as well as to report any risks in the gold or silver supply chain, please submit your concern via our grievance mechanism:

Furthermore, in relation to any other concerns to this policy, GG Refinery encourages any parties involved in gold or silver supply chains to contact the LBMA.

On behalf of the Senior Management, this policy has been approved by the Head of Compliance of GG Refinery Limited.

Policy Acknowledgment

GG refinery requires all its employees and external stakeholders (such as agents, consultants, suppliers, and business partners) to fully comply with this policy.

 

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