Annual Progress Report 2022-2023
It is my great pleasure to present to you the annual report of the International Responsible Business Conduct (IRBC) Agreement for the Metals Sector. The Metals Agreement brings stakeholders together with the collaborative aim to assist companies in implementing IRBC. The Agreement started in 2019 and it just concluded year 4 (June 2022-July 2023). In this report, we reflect on the past year, identify important lessons and challenges, and look forward with enthusiasm.
IRBC sets out an expectation that all businesses avoid and address adverse impacts of their operations, while contributing to sustainable development in the countries where they operate or countries linked to their value chains. This expectation has been communicated since 2000 by the SER (“De Winst van Waarden” Report) and the OECD (OECD Guidelines 2000, 2011, 2023) and since 2011 by the UN (UN Guiding Principles on Business and Human Rights) and the European Commission (Communication on Corporate Social Responsibility*). By now, six of the nine planetary boundaries which regard the vital bio-physical processes that allow human life on earth, have been transgressed. It is therefore high time that we act. We need to change our business models into circular business models. In that way, we can succeed with the economic transition towards a circular and equitable economy. We must do this as soon as possible in order to restore the vital bio-physical processes and to comply with basic human rights and labour rights.
The parties to the Agreement worked together during the Covid-19 period and had to deal with new challenges such as a significant increase in energy prices, which had serious business impact on the company members of the Agreement. Following this period, trust has been built between the different parties: the companies, industry associations, government, trade unions and NGOs are now actively contacting each other and collaborating on various themes. This is pivotal for conducting due diligence properly and effectively, and for creating a positive impact within the value chains.
In the metals sector, the interest of companies and industry associations in the Metals Agreement and IRBC is on the rise. This is driven by new and developing IRBC regulations, including the EU Corporate Sustainability Reporting Directive (CSRD), the EU Corporate Sustainability Due Diligence Directive (CSDDD) and the applicable and pending due diligence legislation in various European countries, including in the Netherlands. This interest extends beyond legal compliance, as both individuals and businesses are actively engaging in the transition to a sustainable, equitable economy. They aim to reduce CO2 emissions, to prevent human and labour rights violations and to protect the environment. A group of companies part of the Agreement is making progress and setting inspiring examples.
The parties also have developed 'Roadshows', in which parties active in the metals sector can participate, these ‘Roadshows’ are also open for companies in the sector that are not part of the Agreement. The goal is to share knowledge about the OECD-ICSR due diligence process. Furthermore, the parties organised a round table, also with non-parties active in the metals sector and with public regulators. The round table aimed to brainstorm about the connection between the themes: ICSR, circular economy, raw materials scarcity and geopolitical tensions. The aim was to better understand how the collaboration in the international value chain can be improved.
Nonetheless, still, robust effort of all parties to the Metals Agreement is needed to fully achieve the goals of the Agreement. In the last General Assembly of Parties, the parties have indicated that they wish to continue this Metals Agreement after year 5. The Agreement will be open to new parties to join during the fifth year or thereafter.
I would also like to highlight the significance of the updated OECD Guidelines, which were launched in June 2023. The text has been agreed upon by OECD Member States, representatives of the business and investors communities and representatives of NGOs and unions. The updated OECD Guidelines play a crucial role in our ongoing commitment to IRBC and are at the core of the Metals Agreement. They inform us about which topics are deemed important in conducting and applying due diligence. The updated text recommends enterprises to align with internationally agreed goals on climate change and biodiversity, maintaining healthy ecosystems and ensuring a sustainable water supply. Other updates refer, for example, to the recommendation for companies to ensure transparency and integrity in lobbying activities in which they participate. There are no changes to the six-step due diligence framework, which is the reference point for RBC practices for businesses globally. The OECD also provides guidance on environmental due diligence in mineral value chains in its recently published Handbook on Environmental Due Diligence in Mineral Supply Chains.
I would like to thank all parties, including companies, industry associations, NGOs, trade unions and the government, for their valuable contributions and collaboration. Together, we continue to advocate for IRBC in the metals sector.
Prof. dr. Tineke Lambooy
Independent Chairperson of the Agreement
* A renewed EU strategy 2011-14 for Corporate Social Responsibility 25 October 2011.
Sekhar Lahiri, VNMI