DUE DILIGENCE PLAN 0. DECLARATION OF COMPLIANCE TO CONFLICT-FREE MINERAL POLICY. 1. Establishing Robust Internal Risk Management System.

Transcription

1 DUE DILIGENCE PLAN 0. DECLARATION OF COMPLIANCE TO CONFLICT-FREE MINERAL POLICY The Company declares that it will comply to its Conflict-Free Mineral Policy which adheres strictly to OECD Guidance on Sourcing Minerals from Conflict-Affected and High Risk Areas, as well as the UN Security Council s Resolutions on Conflict Minerals. In following the above mentioned Guidelines we aim to adopt the Five-Step Due Diligence and Implementation Framework, viz.: 1. Establishing Robust Internal Risk Management System. 2. Establishing Supply Chain Risk Identification and Assessment Process. 3. Designing and Implementation of a Risk Mitigation Plan to respond to identified risks. 4. Carry out an Independent Third-Party Audit of Supply Chain Due Diligence 5. Report on the Supply Chain Due Diligence The Company will maintain and adopt an Internal Risk Management Systems including Policies and Procedures that will be clearly communicated to the Supply Chain. The Company will not tolerate the minerals whose extraction, transport or trade is related to/or contributed to: a. Any forms of Torture, Cruel, Inhuman and Degrading Treatment; b. Any forms of Forced or Compulsory Labour; c. The worst forms of Child Labour; d. Other Gross Human Rights Violations and abuses such as widespread sexual violence; e. War Crimes or other Serious Violations of International Humanitarian Law, Crimes Against Humanity or Genocide.

2 f. Direct or Indirect support for Non-State Armed Groups through the Extraction, Transport, Trade, Handling or Export of Minerals. The Company recognizes the Risks which may be associated with Extracting, Transportation, Trading, Handling and Exporting Minerals from Conflict-Affected and High- Risk Areas, and recognizes that it has the responsibility to respect Human Rights and not contribute to Conflict. The Company undertakes to incorporate in Legal Contracts and/or Agreements with Suppliers the following Policy on Responsible Sourcing of Minerals from Conflict-Affected and High-Risk Areas. The Company will ensure to adopt a Common Reference for Conflict Sensitive Sourcing Practices and Suppliers' Risk Awareness from the Point of Extraction and throughout the Upstream Supply Chain until end user. The Company commits to refraining from any action which contributes to the Financing of Conflict and commits to comply with relevant United Nations Sanctions Resolutions or, where applicable, Domestic Laws implementing such resolutions. Regarding Bribery and Fraudulent Misrepresentation of the Origin of Minerals: The Company 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, Trading, Handling, Transportation and Exportation. Regarding Money Laundering: The Company will support efforts, or take steps, to contribute to the effective elimination of Money Laundering where we identify a reasonable Risk of Money-Laundering resulting from, or connected to, the Extraction, Trading, Handling, Transportation or Exportation 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. Regarding the Payment of Taxes, Fees and Royalties due to Governments: The Company will ensure that all Taxes, Fees, and Royalties related to Mineral Extraction,

3 Trading and Exportation from Conflict-Affected and High-Risk Areas are paid to governments and, in accordance with the company's position in the Supply Chain, the company commit to disclose such payments in accordance with the principles set forth under the Extractive Industry Transparency Initiative (EITI). 1. ESTABLISHING OF INTERNAL RISK MANAGEMENT SYSTEM The Company plans to: 1.1. Establish, adopt and clearly communicate to Suppliers and the Public, the company s policy for the Supply Chain of Minerals originating from Conflict-Affected and High Risk Areas. This policy incorporates the Standards against which Due Diligence is to be conducted, consistent with the Standards set forth in the company s Conflict Minerals Policy Structure Internal Risk Management System to Support the Supply Chain Due Diligence Establish a System of Controls and Transparency over the Mineral Supply Chain. This will include a Chain of Custody or a Traceability System or the Identification of Upstream Actors in the Supply Chain. This will be implemented through Participation in the Industry-Driven Programs Strengthen company s engagement with the Suppliers. A Conflict-Free Mineral Policy will be incorporated into Contracts and/or Agreements with Suppliers. Where possible, assists Suppliers in building capacities with a view of improving Due Diligence Performance.

4 1.5. Establish a Company-Level, or Industry-Wide, grievance mechanism as an early-warning Risk Awareness System. 2. RISK IDENTIFICATION & ASSESSMENT WITHIN THE SUPPLY CHAIN: The Company Plans to: 2.1. Identify Risks within the Supply Chain as recommended in the Supplements Assess Risks of adverse impacts in the light of the Standards of their Supply Chain Policy consistent with its Conflict Mineral Policy. 3. DESIGNING & IMPLEMENTATION OF RISK RESPONSE STRATEGY The Company Plans to: 3.1. Report findings of the Supply Chain Risk Assessment to the designated Senior Management of the company Develop and Adopt a Risk Management Plan: Develop a strategy for Risk Management by either: i. Continuing Trade throughout the course of Measurable Risk Mitigation efforts; ii. Temporarily suspending Trade while pursuing ongoing Measurable Risk Mitigation, iii. Disengaging with a Supplier after failed attempts at Mitigation or where the company deems Risk Mitigation not Feasible or Unacceptable

5 To determine the correct strategy the company will review Annex II (Model Supply Chain Policy for Responsible Global Supply Chains of Minerals from Conflict-Affected and High Risk Areas) and consider their ability to influence, and where necessary take steps to build leverage, over suppliers who can most effectively prevent or mitigate the identified risk. If the Company pursues Risk Mitigation efforts while continuing to trade or temporarily suspending trade, the company will consult with Suppliers and affected Stakeholders, including local and central government authorities, international or civil society organizations and affected third parties, where appropriate, and agree on the strategy for Measurable Risk Mitigation in the Risk Management Plan. The company may draw on the suggested measures and Indicators under Annex III of the Due Diligence Guidance to design Conflict and High-Risk Sensitive Strategies in the Risk Management Plan and measure progressive improvement Implement the Risk Management Plan, Monitor and Track Performance of Risk Mitigation efforts and report back to designated Senior Management. This will be done in cooperation and/or consultation with local and central government authorities, upstream companies, international or civil society organizations and affected third parties where the Risk Management Plan is implemented and monitored in Conflict-Affected and High-Risk Areas Undertake additional fact and Risk Assessments for Risks requiring Mitigation, or after a change of circumstances. 4. CARRY OUT INDEPENDENT THIRD-PARTY AUDIT OF SUPPLY CHAIN DUE DILIGENCE

6 4.1. The Company plans to have Independent Third-Party Audit of Supply Chain Due Diligence at identified risk points along the Supply Chain. Such audits will be independently verified through institutionalised mechanisms The Company will implement the following Risk Assessment Procedures: i. Unannounced Mine Site visits, itsci and relationships with other actors in the industry to obtain information about the People and the Mines that our company buys from. ii. Have 3 levels of Infringements and suitable responses for those differing levels, see examples in the table below: Risk Level Infringement Immediate Action Subsequent Action 1. Low Incorrect Tag or Falsified Logbook 2. Medium Unaccounted Weights or Infeasible Mine Production Volumes. Discuss with itsci and ask for Verification Report findings to itsci and GMD, compare information with itsci Continue Purchase until the situation is resolved. Continue Purchase and Inform the Supplier of our doubts and engage them with itsci & GMD.

7 3. High Information about Supplier s Links to Armed Groups or Conducts Human Rights Abuses. Immediate Disengagement and Share Information with itsci and GMD. Continued Disengagement until the situation is clarified. If proved untrue, then continue purchasing. 5. REPORT ON THE SUPPLY CHAIN DUE DILIGENCE 5.1. The Company will publicly report on its Supply Chain Due Diligence Policy and Practices and will do so by expanding the Scope of its Sustainability, Corporate Social Responsibility, or Annual Report to cover additional information on Mineral Supply Chain Due Diligence. Managing Director Gvidas Galubickas