Newsletter: LPPM Responsible Platinum/Palladium Guidance Version 4
The London Platinum and Palladium Market (the “LPPM”) introduced its Responsible Sourcing Programme (the “Programme”) in January 2019. It is mandatory for every member of the LPPM Good Delivery Lists and Sponge Accreditation Lists (together, the “Lists”) to submit an annual report of its compliance with the LPPM’s Responsible Platinum/Palladium Guidance (the “Guidance”) to the LPPM’s Responsible Sourcing Review Committee (the “RSRC”), which is responsible for the implementation of the Programme and the Guidance. The RSRC also issues industry guidelines for the conduct of annual assurances by Approved Assurance Providers, based on the framework of the Guidance. These guidelines are called the “Third-Party Audit Guidance”.
The LPPM continues to believe that it is in the best interest of the Platinum/Palladium refining industry that the LPPM constructs a Responsible Sourcing Programme for Supply Chain Risk Management that is tailored to the industry’s particular needs and inherent risks. In pursuit of that aim, the RSRC has reviewed its Guidance and has issued a new version, Version 4. At the same time, it has conducted its first full review of its Third-Party Audit Guidance and issued a new version which, for the sake of clarity and to avoid confusion about chronology, it is calling the “Third-Party Audit Guidance, Version 4”.
The Version 4 revisions are not comprehensive and far-reaching: many of them correct typographical errors or clarify definitions and nomenclature. Several of the amendments to the text simply reflect the evolution of the Programme since its inception. The RSRC continues to welcome dialogue with members of the industry and to find value in exchanges of ideas with Responsible Sourcing practitioners from other industry segments and to take note of Responsible Sourcing evolution. In particular, the RSRC acknowledges the work carried out by the London Bullion Market Association, including the training of Approved Assurance Providers.
Key Developments in Version 4
The RSRC is grateful for the work done by members of the Lists to implement the Guidance, and to the Approved Assurance Providers for their feedback about the Guidance and the Third-Party Audit Guidance. Version 4 is intended to confirm and extend work that has already begun, to improve the industry’s scrutiny of its supply chain. There are three areas to which the RSRC wishes to draw attention, in Version 4:
- The Countries of Origin Annex (“COO”). The RSRC has had extensive discussions with Approved Assurance Providers and members of the Lists, over the past twelve months, about the COO. Version 4 does not represent a departure from the terms of these discussions but seeks to clarify, consolidate and coordinate the language of the Guidance and the Third-Party Assurance Guidance, on the subject. Appendix 1 of the Guidance and Appendix 5 of the Third-Party Audit Guidance now set out the RSRC’s current requirements, in detail.
- Environmental, Social & Governance (“ESG”). Version 4 includes strengthened ESG guidelines, principally on page 7. of the Guidance.
- Whistleblowing. Version 4 strengthens the requirements for clear access to whistleblowing provision. The RSRC believes that whistleblowing can provide a valuable early-warning mechanism to management, of hitherto unseen risks in the supply chain.
Finally, section 4.2 of the Third-Party Audit Guidance includes a section on ‘repeated low-level non-compliance’. The RSRC feels that Approved Assurance Providers noting a repeat of the same non-compliances in successive years, should explain their reasoning for not escalating the risk evaluating, to the point where an auditee is required to provide a Corrective Action Plan.
LPPM Responsible Sourcing Review Committee