World Gold Council unveils new principles of responsible mining

As gold mining executives gather in Colorado for back-to-back conferences this month, the World Gold Council is hoping to polish the sector’s image with the release of a new responsible mining framework.

Released on Thursday, and nearly two years in the making, the Responsible Gold Mining Principles aim to create a set of global standards certifying that bullion has been extracted, processed and refined with a nod to environmental, social and governance issues.

The principles come at a time when all corporations are facing increasing scrutiny of their operations and supply chains from investors, consumers and activists. The gold mining sector in particular has been trying to clean up its reputation in the wake of environmental disasters, such as the Mount Polley Mine tailings dam failure in British Columbia in 2014, as well as reports of human rights abuses at mines abroad.

“Undoubtedly, a part of this is continuing to build the trust in gold,” said Terry Heymann, chief financial officer of the World Gold Council, “and helping consumers to understand the products that they buy, and where they come from and how they’ve been produced.”

The new standards draw parallels to the diamond industry, which in 2003 created a certification process to assure consumers that they were not purchasing rocks that were financing rebel movements seeking to undermine legitimate governments.

Known as the Kimberley Process Certification Scheme, and established with the aid of the United Nations, the process has drawn criticism for not covering the broad range of human rights risks posed by the diamond trade.

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Heymann noted that the gold mining principles were not developed with any governmental organizations, but by his organization, an advocacy organization for the gold mining sector.

He likened it to the trend of providing greater information about supply chains, noting supermarkets in the United Kingdom, where he is based, as well as in some parts of Canada now provide more information about where their produce was grown.

If successful, the principles could create new global standards for mining companies, Heymann said. His organization’s membership, which includes North American companies such as Barrick Gold Corp. and Newmont Goldcorp Corp., as well as Chinese companies like Shandong Gold Corp. and China Gold Inc., are all expected to adopt the principles.

The principles, which run about 10 pages, call on mining companies to make specific and general pledges about their operations and supply chain, and then publicly report on their progress once a year.

One principle calls on mining companies to disclose their political contributions, whether financial or in-kind, and whether they are made directly or through an intermediary. Another principle asks companies to publish tax, royalty and other payments by project and country.

Other principles appear more aspirational, such as the pledge to not use abusive labour practices, and to establish “fair, effective and timely mechanisms” to resolve grievances, both of which are open to interpretation.

An artisanal miner climbs out of a gold mine with a bag of rocks broken off from inside the mining pit at the unlicensed mining site of Nsuaem Top in Ghana. REUTERS/ZOHRA BENSEMRA/FILE PHOTO

Joanne Lebert, executive director of Ottawa-based Impact, a non-profit that helps empower local communities around mines, said the principles won’t resolve one of the biggest issues for the gold industry: artisanal mining.

Many gold mines, particularly in impoverished parts of Africa and Latin America, attract artisanal miners, who sort through mine waste in search of gold or develop small-scale operations on a mining company’s property. Those miners sometimes process their ore with mercury, a dangerous pollutant, sell their bullion into the black market, or end up in violent conflict with mining security forces.

“You would expect a member organization representing large-scale mining to try to find long-term solutions to this,” Lebert said. “This is a pressing issue that’s not being tackled.”

Lebert said she had hoped the principles would call on mining companies to recognize a responsibility to work with artisanal miners, possibly through agreements to process their ore, or buy their gold at market prices, as some companies such as Vancouver-based B2Gold Inc. have reported doing.

The principles do touch on artisanal mining, stating mining companies should “support access to legitimate markets” for artisanal miners, but that leaves room for interpretation. They also state miners should “consider supporting” government initiatives to reduce the use of mercury.

Heymann acknowledged that artisanal mining is an “important issue,” but said his organization was not in a position to address it.

“I just don’t feel it is the right role for the World Gold Council to take head on,” he said.

The principles, he said, will help clarify and define what constitutes responsible gold mining.

“I’m really hopeful that this will be broadly supported by the entire gold mining industry,” Heym