Delegates from government ministries, the UN and diplomatic bodies, Chinese businesses and international NGOs gathered in Chengdu from Sept 20 to 22 to discuss issues related to ESG aspects of critical mineral supply chains.
The Sustainable Mineral Supply Chain International Forum 2023 (SMISC Forum), organized by China Chamber of Commerce for Import & Export of Minerals and Chemicals (CCCMC) and Responsible Critical Mineral Initiative (RCI), was held in Chengdu, Sichuan Province.
SMISC Forum, focusing on ESG in the mining industry and compliance management in mineral supply chains, welcomed participants from more than 30 countries. A wide range of issues including human rights, labor practices, occupational health and safety, supply chain management, environmental conservation and community development were on the agenda.
Sun Lihui, founder of RCI, indicated that the forum served as a professional, authoritative dialogue platform, and covered the whole life cycle of critical minerals, ranging from mining, refining, processing, manufacturing and recycling. Sun also convened the first SMISC Forum in 2020.
This year’s forum had the support of the Sino-British Cooperation in International Forestry Investment and Trade (InFIT), the Sino-German Center for Sustainable Development, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the International Labor Organization (ILO), the World Gold Council (WGC), and the Central South University.
Central South University is a cradle of China’s talents and professionals on mining and metallurgy. The university will launch a Mining Biodiversity Research and Promotion Center with support from CCCMC and the Wildlife Conservation Society (WCS).
The two-day forum covered hot topics such as the current status and trends of due diligence legislation, policies and rules in the mineral supply chain, ESG risks and standardized governance in the mining industry, the resilience of new energy mineral supply chains and multi-stakeholder cooperation mechanisms, mining industry and human rights protection, biodiversity mainstreaming and low-carbon mining, and responsible sourcing to promote the improvement of supply chain governance.
The forum also shared cutting-edge knowledge, tools and good practices on ESG and supply chain due diligence management in the mining industry. Stakeholders in the mineral supply chain exchanged their views and reflected on recent developments in critical mineral supply chains.
The forum explored topics such as global policy trends in due diligence management of mineral supply chains, ESG risks in mineral supply chains, and mineral resources development mechanisms in the Great Lakes region of Africa.
The forum showcased the industry’s due diligence management efforts, showing the progress made by industry and international organizations in recent years in standards development and capacity building. It also unveiled notable achievements made by upstream and downstream enterprises in addressing ESG risks in the supply chain since 2016, which was labeled as the “first year” of due diligence management in China’s mineral supply chain.
A “Joint Action Initiative for High-Quality Development of Critical Mineral Supply Chains” was initiated by companies in attendance. Later, a multi-stakeholder roundtable discussion explored how to build resilience and partnerships in new energy mineral supply chains.
Four thematic workshops occurred on the second day of the forum. Speakers from the UNDP in China, RCI, the Pontifical Catholic University of Valparaiso in Chile, Wuhan University, and the Norwegian Pension Fund (KLP) discussed how to strengthen practices to enhance human rights protections in the mining sector.
The International Labor Organization and RCI featured a discussion around labor relations to help companies understand responsible labor practices, and explored the key challenges and needs of companies in the area of labor relations by sharing case studies of multinational companies in the area of labor relations and good practices of Chinese companies in overseas labor relations.
The Tropical Forest Alliance, ClientEarth and GEM Co. explored biodiversity mainstreaming practices in the mining sector and feasible paths and nature-based solutions for a low-carbon transition.
The Sino-German Center for Sustainable Development and GIZ hosted the last session focusing on the New Batteries Act adopted by the European Union (EU) in June 2023, exploring how to effectively respond to the impacts of the new regulation, and how to promote effective cooperation between the upstream and downstream areas of the supply chain, so as to create a responsible battery supply chain.
ESG related issues in the mining and mineral supply chain have received extensive attention from the international community. Many countries have launched or updated their key minerals strategies, and have also introduced or are planning to introduce a series of measures, including the EU’s Batteries and Waste Batteries Regulation, the Critical Minerals Raw Materials Act, the Sustainable Development Due Diligence Directive (SDDGD), and Germany’s Supply Chain Due Diligence Management Obligation (SCMO) Act. A range of supply chain human rights and environmental due diligence legislation emphasizes a fair and green energy transition.
Against this backdrop, ESG governance in the mining industry and mineral supply chain needs to deal with more difficult issues, and international agencies, governments, NGOs, and industry organizations have started to seek solutions to help companies strengthen their capabilities to carry out due diligence on their supply chains, enhance transparency, and identify, prevent, and mitigate the serious ESG risks that may be posed.
As a major source of investment in key global mineral resources, the largest importer and processor, and exporter of primary products, China plays an important role in the construction and governance of the key global mineral value chain. More and more stakeholders recognize that building upstream and downstream collaborative governance partnerships is the key to preventing and mitigating ESG risks in the supply chain.
Representatives from the Chinese Ministry of Commerce, Ministry of Foreign Affairs, Organization for Economic Cooperation and Development (OECD), Secretariat of the International Conference on the Great Lakes Region of Africa (ICGLR), Geneva Center for Security Governance (DCAF), and the Responsible Business Alliance (RBA) were also present at the forum.
Article photo taken by Wen Bo.