Alignment with the OECD Due Diligence Guidance Andrew Britton 21 November 2016
Presentation contents Project background and participants Alignment Assessment methodology Presentation of assessment results Project timescale Why the Alignment Assessment project matters Q&A
Alignment Assessment - participants Project delivery: Participating industry programmes Project Advisory Group
Presentation contents Project background and participants Alignment Assessment methodology Presentation of assessment results Project timescale Why the Alignment Assessment project matters Q&A
Alignment Assessment methodology (1/3) Alignment Assessment of programme design and implementation Overarching due diligence principles Alignment with the five-step framework Specific responsibilities of programmes Programme governance review Assessment of programme management and governance (separate from Alignment with the OECD Guidance)
Alignment Assessment methodology (2/3) 1. Planning 2. Document review 3. Interviews 4. Audit shadows 5. Analysis and reporting Confirm scope of the assessment Appoint an external evaluator Engage relevant stakeholders Technical guidance and protocols Performance and audit reports Internal governance External communications and training Programme staff and management Board and committee members Company stakeholders External stakeholders (e.g. civil society, government) Observation of third party audits at company facilities Interviews with company management Interviews with auditors Completion of Alignment Assessment Tool Develop conclusions and recommendations External distribution of report to relevant stakeholders
Alignment Assessment methodology (3/3) Excel-based Alignment Assessment Tool accompanied by a descriptive Alignment Assessment Methodology Draft version available now on the OECD website: http://mneguidelines.oecd.org/industry-initiatives-alignment-assessment
Presentation contents Project background and participants Alignment Assessment methodology Reporting of Assessment results Project timescale Why the Alignment Assessment project matters Q&A
Reporting of Assessment results (1/2) An overall conclusion of the alignment of a programme to the OECD Due Diligence Guidance will be provided: Fully Aligned Partially Aligned Not Aligned Overall Alignment Assessment rating calculation: Fully Aligned: (Section A = 100%) + (Sections B and C = 80% or higher) + (no Not Aligned criteria Partially Aligned: All other combinations between Fully Aligned and Not Aligned Not Aligned: (Section A = <50%) OR (20% or more of criteria in Sections B and C are Not Aligned ) Alignment Assessment sections: Section A) Overarching due diligence principles Section B) Alignment with the five-step framework Section C) Specific responsibilities of programmes
Reporting of Assessment results (2/2) Detailed analysis of programme performance Transparency over the performance of programmes and practical recommendations for improvement (Example of results charts) Step 1: Establish strong management systems Number of assessment criteria: 28 32% 21% Fully Aligned Partially Aligned 47% Not Aligned 45% Fully Aligned Partially Aligned Not Aligned Standards 25% 43% 32% Implementation 21% 21% 57%
Presentation contents Project background and participants Alignment Assessment methodology Reporting of Assessment results Project timescale Why the Alignment Assessment project matters Q&A
Project timescale Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Methodology development Assessment of programmes Report drafting and consultation (Timeline is indicative) Publication
Presentation contents Project background and participants Alignment Assessment methodology Reporting of Assessment results Project timescale Why the Alignment Assessment project matters Q&A
Why Alignment Assessment matters The OECD Guidance is the only globally recognised due diligence framework for mineral supply chains By providing a standardised Alignment Assessment the project will promote greater consistency and rigour in industry programmes It provides a tool for policymakers who need to evaluate supply chain programmes It supports risk management for companies through the focus on improving due diligence practices in mineral supply chains Company-level assessment (A Kumi initiative that is not part of the OECD Alignment Assessment contract) At Kumi we believe that Alignment Assessment has direct relevance for companies In our experience many companies due diligence systems and processes fall short of the recommendations set out in the OECD Due Diligence Guidance We are using our experience of developing and applying the Alignment Assessment methodology to develop a company-focused due diligence assessment toolkit that can support companies who wish to evaluate and improve the effectiveness of due diligence systems and processes within their organisation or in their supply chains
Presentation contents Project background and participants Alignment Assessment methodology Reporting of Assessment results Project timescale Why the Alignment Assessment project matters Q&A
Thank you Any questions? Andrew Britton abritton@kumi.consulting www.kumi.consulting Building commercial success through social value