The latest allegations came from a Global Witness report released on Thursday that Swiss refiner Valcambi SA had purchased large amounts of gold from Dubai’s Kaloti Precious Metals Group, which was at risk of acquiring gold from the Sudanese conflict. .
“The world’s largest gold refiner, Switzerland-based Valcambi, bought more than 20 tonnes of gold from UAE refiner and gold trader Kaloti, which likely bought conflict gold from the Sudan in 2012 and was at high risk of doing so in the following years, our reveals a new investigation, “says the report.
The report called on the London Bullion Market Association (LBMA) to take a closer look at the claims and improve its monitoring system for gold producers.
“Our results seriously undermine the credibility of LBMA, the leading gold sector accreditation body, which has continued to include Valcambi on its good delivery list … Gaps in LBMA responsible procurement standards and the apparent lack The agency’s oversight of Valcambi facilitated the company’s due diligence failures vis-à-vis Kaloti, ”the report said.
Kaloti has denied the allegations, Bloomberg reported. “Kaloti is independently audited annually against applicable standards and at no time has any conflict from any jurisdiction, including Sudan, been identified in any of its supply chains,” Bloomberg said citing Kaloti. “In addition, Kaloti has never sent gold material from Sudan to any refinery. “
Valcambi has also reportedly denied the allegations.
A press release posted last month on Valcambi’s website said the refiner plans to adopt “a new secure data storage (SDS) system that strengthens and automates its precious metal sourcing process and enables a increased transparency and information sharing ”.
“Based on blockchain technology, the SDS system will require entities seeking to become a precious metals supplier to Valcambi to upload all the information, data and due diligence documents required by the highest due diligence standard. (based on the LBMA Refiners Toolkit due diligence models) in the database. This information will then be available to all parties involved in the audit, ”said the press release.
However, this is not all. In another report, also released Thursday, the Bern-based non-governmental organization Swissaid questioned LBMA standards for monitoring conflict gold.
“The audits to which refineries are subject are not sufficiently transparent. The London Bullion Market Association (LBMA) has limited powers and is unable to identify suppliers to its member refineries, ”wrote Swissaid in the report. “The LBMA is an important player in the sector in promoting and demanding responsible practices. However, it must be much more rigorous with regard to the problematic supply of its member refineries. The London-based association also needs to be more committed to increasing transparency in the sector. “
On Friday, the LBMA posted an “update on responsible procurement” on its website, stating that it “is committed to maintaining the highest standards of due diligence for the procurement of materials.”
The LBMA’s responsible procurement program (RSP) consists of a five-step framework: “environmental issues; avoid material from conflict-affected areas; and the fight against money laundering, the financing of terrorism and human rights violations, including child labor. “
All the refiners recognized by the LBMA are subject to an independent audit each year, said the association.
“These annual audits, carried out by service providers approved by the LBMA, may be supplemented by special audits if and when new information or important evidence becomes available. In addition, LBMA will assess this information / evidence and carry out further investigations, if necessary, or if warranted, initiate a formal incident review process, ”the press release said.
The association added that it cannot solve the problem on its own and recognizes that more needs to be done. “We are constantly engaged with other parties such as the OECD, law enforcement and NGOs in order to exert influence in jurisdictions where standards may be lower than those set out in the Guide de l ‘OECD,’ said the LBMA.
The association wants to continue to improve responsible procurement standards and business practices. One of the actions announced is a three-year plan focused on improving the transparency and integrity of the industry.
“This plan builds on the successes of the past and seeks to create an open and constructive dialogue on the exceptional challenges facing the precious metals industry. This includes a focus on improving auditing standards. The LBMA welcomes the constructive engagement of all stakeholders in this process, ”the press release noted.
Bloomberg also said the LBMA plans to release an annual report with updates on these issues.
These allegations add to growing concerns about responsible gold.
Just last month, the LBMA said it would investigate allegations from an Australian newspaper that the Perth Mint was processing conflict gold from small gold miners in Papua New Guinea (PNG) who used child labor and toxic mercury.
The Perth Mint has also launched its own independent audit after an order from Western Australian Prime Minister Mark McGowan to examine how the Mint oversees its suppliers.
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