Certification schemes are one key means for civil society actors to hold mineral companies to account and for companies to demonstrate that they are operating responsibly. This research report identifies the full range of planned and operational schemes applicable to the mining, minerals and metals industries and their supply chains and analyses the design characteristics of those schemes, including the: objectives, focus, process for standards development and operation. Fifteen schemes are analysed. The design characteristics under analysis were determined from a review of academic literature on sustainability standards and their effectiveness.
This report represents the first stage of an applied research project looking into the effectiveness of certification schemes in the mineral industry and the potential role sustainability certification schemes can play to improve standards for responsible mining. The research is being undertaken by the Centre for Social Responsibility in Mining (CSRM) at The University of Queensland and funded by the Tiffany & Co. Foundation through a grant to the University of Queensland in America.
Previous studies on the specific topic of sustainability certification schemes suggest that there are few studies about certification schemes that have documented outcomes sufficient to determine what effects occurred and whether they are attributable to certification schemes. In particular, how the different design characteristics of different sustainability certification schemes can work to improve environmental and social outcomes.
The 15 schemes analysed during the first stage of this project were classified considering three different categories of schemes: (1) a ‘certified standard’, where the scheme fully determines how the standard should be assured; (2) an “assured standard’, where the standard should be assured but the scheme does not fully determine how the standard should be assured; or (3) an “non-assured standard”, where participants apply the standard but assurance is not compulsory. According to this classification, the vast majority of the schemes analysed in this report were classified as a “certified standard” (86%). One scheme was classified as “assured standard” (7%) and one scheme was classified as “non-assured standard” (7%).
The analysis presented in this report is based on publicly available information, validated by representatives of 8 of the 15 schemes analysed. Some of the key findings from this report are:
• The majority of the schemes are voluntary standards (73%), with a global geographic scope (Section 2.1).
• The thematic scope of the standards are dominated by social issues, followed by governance and the environment (Section 2.1.3).
• The majority of schemes are new, with 73% of the schemes becoming operative within the last four years or planned to become operative in the next two years. Furthermore, the time to establish, develop and launch the schemes differed significantly among the schemes analysed. This time difference demonstrates how challenging it can be to negotiate and achieve consensus amongst different stakeholders1 when a multistakeholder approach is adopted (Section 2.1.1).
• There was evidence of interaction and support between schemes, with some new schemes using established schemes as templates and receiving assistance from already established schemes during the start-up phase. A vast majority of schemes (87%) cross-reference other standards within their own standards or guidelines; however few (33%) recognise the certificates, labels or claims provided by other schemes within their own processes (Sections 2.1.1 and 2.2.3).
• There was variation as to whether the standards used a ‘chain of custody’ approach. Of the schemes analysed 60% incorporated the concept of chain of custody within their scope, with the remaining 40% focussed solely 1 Stakeholder is any group or individual who can affect or is affected by the achievement of the organisation’s objectives (Freeman 1984). Freeman, R. E. (1984). “Strategic management: A stakeholder approach.” Advances in strategic management 1(1): 31-60. 8 | Designing sustainability certification for impact – J u n e 2 0 1 5 on the mining or processing stages (Section 2.2.2).
• The decision-makers of schemes varied, with 33% of schemes consisting of decision-makers dominated by industry representatives, 33% with multi-stakeholder representatives, 13% with government representatives. Information on the decision makers was unavailable for three schemes (20%; Section 2.2.5).
• Public information on some aspects of governance and accountability lacked transparency for a significant number of schemes. For instance 40% of the schemes analysed did not provide public information about how decision makers are chosen, 67% of the schemes did not provide public information about how long decision makers occupy their position, and 33% of the schemes did not make the names of the decision makers publicly available (Section 2.2.5). Only a slight majority (53%) publicly disclosed financial information about the scheme, with 34% of the schemes disclosing their financial information through annual reports. Only one scheme had its annual report audited by an external auditor. A minority of schemes (40%) provide information in the public domain on the costs associated with participation in the scheme (Section 2.2.22 and 2.2.23).
• The slight majority of the schemes (53%) have stakeholder representatives playing an oversight role in the governance and management of the schemes. However, 50% of those schemes did not publicly disclose how those representatives are selected, 75% did not disclose how long those representatives occupied their position, and 57% did not make the names of those representatives publicly available (Section 2.2.6).
• In general it was difficult to find important details about the design characteristics of many of the schemes analysed from publicly available information. For example: 27% of the schemes did not provide detailed information about the existence of periodic revision of the standard; 47% of the schemes did not provide detailed information about whether stakeholders were involved in the development phase of the scheme; 73% of the schemes that did engage stakeholders during the development phase did not disclose the identity of the stakeholders who were engaged; and, only 40% of the schemes make available to the public the assurance statements or the results of the assurance process (Sections 2.2.7, 2.2.8 and 2.2.15).
• The most common form of stakeholder engagement undertaken by the schemes analysed was to release the standard for public consultation during the development phase of the scheme (44%), followed by workshops and roundtables (28%), face-to-face meetings (22%) and regular teleconferences (6%; Section 2.2.8).
• Most of the schemes (60%) did not provide information about the existence of initiatives implemented to support internal or external stakeholders to participate in the development of the scheme or in the revision process. In addition, even though most of the schemes operated globally, 53% of the schemes only provided information on their official website in English, with 33% of schemes providing their guideline documents only in English (Section 2.2.9).
• A minority of schemes (33%) have a contact point for forwarding complaints, with a smaller number still (13%) publically disclosing the existence of a formal complaints and dispute resolution mechanism (Section 2.2.10).
• A slight majority of schemes (53%) were developed based on the ISEAL guidelines or are full members of ISEAL (Section 2.2.12).
• The vast majority of schemes analysed (80%) use third-party assurance processes to ensure compliance, with 40% of the schemes undertaking assurance processes on a yearly basis. Also, the vast majority of schemes (80%) provide guidance for the assurance process, such as definitions about the scope of the assurance, and procedures or protocols for the assurance process (Sections 2.2.12, 2.2.13 and 2.2.14).
• The majority of schemes (67%) accredit the assurance providers, 27% perform a quality review of the assurance process (and only issue the certificate, claim or label after this review), 13% provide criteria for the assurance provider to ensure quality, and 13% designate the assurance providers authorized to perform assurance services (Section 2.2.16).
• A range of support initiatives were identified to assist participants, assurers or other stakeholders in the assurance process. For example, 27% of the schemes provide training material for scheme participants about how to be prepared for assurance processes and how to conduct self-assessments, 27% provide financial support for early adopters or scheme participants with financial constraints, 20% encourage shared assurance and the use of local assurance providers to reduce costs, and 7% suggest the use of materiality to streamline D esigning sustainability certification for impact – June 2015 | 9 the assurance process (Section 2.2.18).
• The slight majority of the schemes assessed (60%) define minimum requirements of compliance and establish consequences and sanctions for situations of non-compliance (Section 2.2.19 and 2.2.21).
• The slight majority of schemes analysed (60%) did not provide detailed information about efforts to foster and improve the level of compliance of participants, especially new starters and participants with financial or technical constraints (Section 2.2.10).
• Only 20% of the schemes analysed have a mechanism for periodic evaluation of the effectiveness of the schemes, with a further 20% of schemes currently developing a process for periodic evaluation (Section 2.2.24).