A new analysis evaluates credibility and quality of third-party assurance schemes
As third-party auditing and accreditation schemes are gaining a foothold as a due diligence tool used by automakers, government officials, and regulators, Lead the Charge—an international coalition of human rights and environmental groups—exposed wide discrepancies in the standards used by eight schemes in certifying the human rights, environmental and climate performance of mining sites, smelters, refiners, steel and aluminum plants, and other facilities in an assessment released today.
The analysis examined the assurance and accreditation processes of Responsible Steel, the Initiative for Responsible Mining Assurance (IRMA), Aluminium Stewardship Initiative (ASI), Responsible Minerals Initiative (RMI), Copper Mark, Towards Sustainable Mining (TSM), International Council on Mining and Metals (ICMM), and Global Steel Climate Council (GSCC).
It found that the majority of the schemes showed a lack of transparency, applied varying quality of auditing procedures, and failed to establish systems for meaningful multi-stakeholder governance and rights-holder and community participation.
“Strong, enforceable laws and regulations are the best means of ensuring companies respect human rights and the environment,” said Payal Sampat, mining program director at Earthworks. “Where mandatory requirements are absent or inadequate, voluntary assurance systems could be a useful tool for automakers – if these systems offer strong standards, multi-sector governance and oversight, and independent, third-party auditing. This assessment shows that many assurance schemes for minerals and mining simply fall short.”
Automakers frequently use these schemes to ensure their supply chains are free of environmental and human rights violations.
“This assessment spotlights a series of significant flaws across the growing industry of third- party assurance schemes that severely inhibits companies’ ability to drive meaningful change on human rights, climate and environmental issues,” said Cecilia Mattea, Battery and Supply Chains Policy Manager at Transport & Environment. “Automakers should approach new initiatives with skepticism, and use their influence to raise the bar, for example on ensuring equal, multistakeholder governance.”
These accreditation schemes also play an influential role among government officials, who are beginning to incorporate these into regulatory frameworks governing the auto industry.
“The stakes of the voluntary accreditation of raw material manufacture are high, and growing,” said Chelsea Hodgkins, senior EV policy advocate with Public Citizen’s Climate Program. “Actors from across these industries seem intent on using voluntary accreditation schemes from third parties as a rubber stamp for business as usual, to gloss over potential serious shortcomings by suppliers, rather than address them. Multi-stakeholder governance in schemes is fundamental to safeguard against industry-self regulation and secure the best possible outcomes for rights-holders. The auto industry must use its influence to drive a race to the top between third-party schemes to certify raw materials while undertaking the due diligence necessary to ensure cleaner and more just supply chains.”
According to the analysis, the IRMA scheme was the top performer, earning 88 percent based on the report’s criteria on governance, credibility and transparency, the role of impacted communities and corrective action plans, the presence of a grievance mechanism, and adherence to human rights and environmental standards. Responsible Steel, which ranked second, scored 63 percent in the analysis, while GSCC placed last at 3 percent.
ICMM’s Performance Expectations Validation process scored very low, meeting only 16 percent of the minimum criteria for effective governance and auditing. RMI, ASI, TSM, and CopperMark demonstrated significant flaws, resulting in scores between 38 percent to 59 percent.
On February 5 at the Mining Indaba 2024 conference in Cape Town, three of the weakest performing schemes—ICMM, TSM and CopperMark—along with the World Gold Council (not evaluated in this assessment given that gold is out of scope) announced the goal of consolidating their existing standards to “simplify the landscape for customers, investors, civil society and the mining industry.” However, civil society groups have raised concerns that this “consolidated standard” will protect the interests of the mining industry, also noting that while some civil society entities have been invited to join a stakeholder advisory group, decision making rests with the mining industry trade associations and certification schemes.
“Consolidating three of the weakest standards into a single standard will result in a lowest common denominator effect that might serve the mining industry but does not serve Indigenous communities, workers or environmental protection,” added Payal Sampat.
The assessment was developed as part of the upcoming second edition of the Lead the Charge Leaderboard, which evaluates efforts of automakers to eliminate fossil fuels, human rights abuses and environmental harms from their supply chains and will be released later in February 2024.
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About Lead the Charge
Lead the Charge is an international coalition of climate, human rights, and advocacy groups, who have come together to work towards an equitable, sustainable, and fossil-free auto supply chain. It is represented by Cultural Survival, Earthworks, First Peoples Worldwide, Inclusive Development International, Industrious Labs, Investor Advocates for Social Justice, Mighty Earth, Public Citizen, Rainforest Foundation Norway, Sierra Club, Society for Threatened Peoples, Solutions for Our Climate, the Sunrise Project, and Transport & Environment.
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