Risk management obligations
Article 5
1
Union importers of minerals shall:
a
identify and assess the risks of adverse impacts in their mineral supply chain on the basis of the information provided pursuant to Article 4 against the standards of their supply chain policy, consistent with Annex II to, and the due diligence recommendations set out in, the OECD Due Diligence Guidance;
b
implement a strategy to respond to the identified risks designed so as to prevent or mitigate adverse impacts by:
1. reporting findings of the supply chain risk assessment to senior management designated for that purpose, in cases where the Union importer is not a natural person;
2. adopting risk management measures consistent with Annex II to, and the due diligence recommendations set out in, the OECD Due Diligence Guidance, considering their ability to influence, and where necessary take steps to exert pressure on suppliers who can most effectively prevent or mitigate the identified risk, by making it possible either to:
  - continue trade while simultaneously implementing measurable risk mitigation efforts,
  - suspend trade temporarily while pursuing ongoing measurable risk mitigation efforts, or
  - disengage with a supplier after failed attempts at risk mitigation;
3. implementing the risk management plan; monitoring and tracking performance of risk mitigation efforts; reporting back to senior management designated for this purpose, in cases where the Union importer is not a natural person; and considering suspending or discontinuing engagement with a supplier after failed attempts at mitigation;
4. undertaking additional fact and risk assessments for risks requiring mitigation, or after a change of circumstances.
2
If a Union importer of minerals pursues risk mitigation efforts while continuing trade or temporarily suspending trade, it shall consult with suppliers and with the stakeholders concerned, including local and central government authorities, international or civil society organisations and affected third parties, and agree on a strategy for measurable risk mitigation in the risk management plan.
3
Union importers of minerals shall, in order to design conflict and high-risk sensitive strategies for mitigation in the risk management plan, rely on the measures and indicators referred to in Annex III to the OECD Due Diligence Guidance and measure progressive improvement.
4
Union importers of metals shall identify and assess, in accordance with Annex II to the OECD Due Diligence Guidance and the specific recommendations set out in that Guidance, the risks in their supply chain based on available third-party audit reports concerning the smelters and refiners in that chain, and, by assessing, as appropriate, the due diligence practices of those smelters and refiners. Those audit reports shall be in accordance with Article 6(1) of this Regulation. In the absence of such third-party audit reports from the smelters and refiners in their supply chain, Union importers of metals shall identify and assess the risks in their supply chain as part of their own risk management system. In such cases, Union importers of metals shall carry out audits of their own supply chain due diligence via an independent third-party in accordance with Article 6 of this Regulation.
5
In cases where they are not natural persons, Union importers of metals shall report the findings of the risk assessment referred to in paragraph 4 to their senior management designated for this purpose and they shall implement a response strategy designed to prevent or mitigate adverse impacts, consistent with Annex II to the OECD Due Diligence Guidance and with the specific recommendations set out in that Guidance.