Canada: The World Gold Council Publishes Its Conflict-Free Gold Standard

On October 18, 2012, the World Gold Council, an industry organization made up of 23 companies representing approximately 60 per cent of global corporate gold production, published its Conflict-Free Gold Standard (Standard). The Standard provides for gold-producing mining companies to disclose the extent to which their operations are 'conflict-affected or high-risk,' including the measures taken to avoid causing, supporting or benefiting unlawful armed conflict or contributing to serious human rights abuses or breaches of international humanitarian law.

Starting January 1, 2013, participating companies are required to publicly account for their compliance with the Standard in the form of a Conflict-Free Gold Report, published either in company documents (e.g., the annual financial report or the sustainability report) and/or on the company website. This should be done at least annually and will cover activities over a 12-month period. Whereas external assurance will be required on this disclosure, companies will be allowed to make the claim of compliance with the Standard on first-time reports before receiving external assurance.

The Standard arrives on the heels of the implementation, on August 22, 2012, by the U.S. Securities and Exchange Commission (SEC) of Sections 1502 and 1504 of the Dodd Frank Wall Street Reform And Consumer Protection Act (Dodd Frank Act). Section 1502 regulates disclosure by U.S.-listed manufacturers of conflict minerals, including gold, produced in the Democratic Republic of Congo (DRC) region, while Section 1504 regulates disclosure by issuers in the extractive sector of payments to governments, as discussed in a previous article. The World Gold Council states on its website that it "firmly supports Section 1502 of the U.S. Dodd-Frank Act and its humanitarian goals." 1

Alongside the complementary nature of the Standard with the Dodd Frank Act disclosure provisions, the Standard will act as an 'Industry Program' to operationalize the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance). It is also designed to complement and integrate with other industry-led initiatives, including the London Bullion Market Association's Responsible Gold Guidance.


The Standard applies to World Gold Council member companies and other entities that choose to apply it. Canadian-based companies represent more than half of the World Gold Council membership: Agnico-Eagle Mines Ltd., Alamos Gold Inc., Barrick Gold Corp., Centerra Gold, Eldorado Gold Corporation, Goldcorp Inc., IAMGOLD Corporation, Kinross Gold Corporation, New Gold Inc., Primero Mining Corporation and Yamana Gold Inc., with associate member Franco-Nevada Corporation.


The Standard is divided into five parts, as follows:

Part A – Conflict Assessment

Firstly, the company will assess whether the area in which the mine is located or through which the gold is being transported while in the custody of the company (the Area) should be categorized as 'conflict-affected or high-risk.' The method of assessment is two-fold:

  1. International sanctions: the company will determine whether the Area is subject to international sanctions, imposed by supra-national bodies such as the United Nations, the European Union, the African Union or the Organization of American States, and whether these sanctions apply to the exploitation of gold. Where the assessment concludes that gold cannot be mined or transported, the mine is considered to be in non-conformance.
  2. Recognition of conflict: the company will determine whether the Area should be considered 'conflict-affected or high-risk' by referencing the Conflict Barometer produced by the Heidelberg Institute. Areas will be considered 'conflict-affected or high-risk' if they are currently ranked, according to this source, as 5 (war) or 4 (limited war) or have been at any stage during the previous two calendar years. These types of conflict are generalized and do not include non-violent or localised social conflicts with the local community. Moreover, even in the case of generalized conflict, the company has some discretion to change the categorization of the Area if it can show that such designation is inaccurate. If the company determines that the Area is not 'conflict-affected or high-risk', it can move on to Part D (Externally Sourced Gold). Otherwise, it will proceed to Part B (Company Assessment).

Part B – Company Assessment

Where the Area is assessed to be 'conflict-affected or high-risk', this next step determines whether the company has the appropriate systems in place in order to comply with its corporate obligations, to avoid causing, supporting or benefiting unlawful armed conflict, or contributing to serious human rights abuses or breaches of international humanitarian law. Where minerals may be contributing to conflict, the company needs to institute a Remedial Action Plan (the "Plan") to address the risk identified and avoid gold being categorized as being in non-conformance.

The company assessment addresses the following areas:

  1. Commitment to human rights: in order to be compliant the company operating the mine must have a published statement on not supporting unlawful armed conflict, respecting human rights and not tolerating exploitative child labour, and it must implement the Voluntary Principles on Security and Human Rights or a comparable system.
  2. Corporate activities: where the mining operation is the subject of credible allegations of serious human rights abuses or breaches of international humanitarian law, it must publicly address the allegations and use its influence so that such activities are not repeated in order to be compliant with the Standard. If the company has been convicted of such violations in the past two years, aside from the responses above, it must put in place sufficient remedial measures to prevent a recurrence.
  3. Security: thecompany must ensure that its security providers, agents and employees are not participating or benefiting from the conflict. Where, in the previous two years, a private security provider has been convicted of or credibly implicated in human rights violations, the company must implement a Remedial Action Plan and provide evidence of its effectiveness. In the case of public security providers being similarly implicated in human rights violations, the company must use its influence to ensure that such personnel are removed from its security services.
  4. Payments and benefits-in-kind:the company mustpublicly disclose payments to governments, at a level comparable to industry standards, unless prohibited by law or contract; the company must have a policy disallowing payments or other benefits to non-governmental groups involved in human rights violations and must undertake risk-based due diligence to mitigate against such events; and the company must have a policy preventing bribery and extortion. Moreover, companies should use their best efforts to avoid payments to public security forces, unless provided by law in a transparent manner.
  5. Engagement, complaints and grievances: the mine must have a whistle-blower program in place, a process for engaging with local stakeholders including marginalized groups such as youth, women and indigenous groups, and a grievance mechanism through which employees, workers and those affected by the mine operations can raise concerns about the mine's activities in an effective manner. Engagement plans should include, where appropriate, relationships with artisanal and small-scale miners, seeking their formalization.

Part C – Commodity Assessment

Where the Area is assessed to be 'conflict-affected or high-risk,' this next step determines the processes in place to manage the movement of gold and gold-bearing material while in the custody of the company, so as to mitigate against the misuse of this material by groups associated with unlawful armed conflict.

  1. Nature of gold production: where the gold-bearing material leaving the mine site cannot be easily processed into gold, and can be segregated from the gold-bearing material that can be easily processed into gold, the company can move straight to considering transport (Section 3). Otherwise, the company must proceed to the next step.
  2. Control of gold at the operation: the company must have management systems in place to track the flow of gold-bearing material in the mine's area and minimize the risk of illegal addition or theft of gold and gold-bearing material. These management systems include traceability systems and reference systems to uniquely identify each batch of material.
  3. Transport: the company must undertake due diligence on intermediaries who transport gold or gold-bearing material; this material must be transported in accordance with an 'Integrity of Shipment' process to ensure that the same material that is shipped from the mine is that which arrives at its destination; material compliant with the Standard must be capable of being segregated from material that is not compliant throughout its transport.

Part D – Externally Sourced Gold Assessment

When the mine acquires gold from external sources, this next step determines the process that needs to be in place to ensure that appropriate due diligence is undertaken in relation to any potential involvement in causing or supporting unlawful armed conflict. Firstly, the company must determine whether the gold or gold-bearing material is potentially from a 'conflict-affected or high-risk area,' using the method outlined in Part A (Section 2) of the Standard. If the material is from a 'conflict-affected or high-risk area,' the company must continue the diligence in line with the OECD Guidance.

Part E – Management Statement of Conformance

Where management believe that the mine conforms with Parts A–D (as relevant), a statement of compliance is provided by the company's management to the next party in the chain of custody. Gold or gold-bearing material that is not in conformance with the Standard will need to be specified as such.

Deviations from Conformance

Where a mining operation does not adhere to one or more of the Standard's assessment criteria (aside from minor/administrative issues), it is considered to be in deviation from conformance with the Standard. Notwithstanding the occurrence of a deviation, a mining operation can remain in conformance with the Standard by adopting a Remedial Action Plan within 90 days of management becoming aware of the deviation. The Plan must set out the corrective action to be taken by the company and an estimated timeframe for implementation. This disclosure must be included in the company's Conflict-Free Gold Report.

The mine will be in non-conformance with the Standard if the company: (1) adopts a Remedial Action Plan but fails to implement it in a timely manner; (2) declines to adopt such a Plan; or (3) recognizes that the Plan is insufficient. In this case the company must publicly disclose the non-conformance of its mine with the Standard and notify the next participant in the chain of custody, and the company's management is no longer permitted to provide a Management Statement of Conformance.

Guidance for Implementing Companies

In parallel with the Standard, the World Gold Council has developed a Guidance for Implementing Companies, which is a non-prescriptive tool providing examples of reporting.

Guidance for Assurance Providers

External assurance is required on the Conflict-Free Gold Report in the form of an independent assurance report covering the same 12-month period. The external assurance provider applies recognized benchmarks in order to determine whether the company's Conflict-Free Gold Report is prepared in accordance with the Standard. The World Gold Council has developed a Guidance for Assurance Providers in order to assist external advisers and ensure consistency in reporting across companies.

In summary, to conform with the Standard, a company should:

  • adhere to the requirements in the Standard set out in Parts A–E;
  • report publicly on their conformance in an annual Conflict-Free Gold Report; and
  • obtain independent assurance on the Conflict-Free Gold Report.

Management's responsibilities

The management of implementing companies are responsible for:

  • demonstrating conformance with the criteria in the Standard;
  • preparing the Conflict-Free Gold Report in accordance with the Standard;
  • appointing an independent assurance provider using the competencies set out in the Standard; and
  • providing access to all evidence required by the assurance provider.

Relationship with the Dodd-Frank Act

Whereas the Standard can assist companies to meet their Dodd-Frank disclosure requirements, its objective is also to prevent a de facto boycott of gold from the DRC region due to the potential reputational hazard created by Section 1502, i.e., labeling minerals as "conflict minerals" based on their place of origin and irrespective of whether they actually contribute to conflict in a manner that can be affected by the company. The Standard is therefore provided by the World Gold Council as a possible solution to the concern that legitimate investment would be discouraged by Section 1502. As such, companies can prove that they are able to operate in conflict areas in a responsible manner.

Below are some of the main differences between the Standard and the Dodd-Frank disclosure requirements:

  • The Standard is voluntary, whereas Sections 1502 and 1504 are binding legal obligations for U.S.-listed companies;
  • Section 1502 does not apply to mining companies unless these companies also manufacture the minerals (and are listed in the U.S.), whereas the Standard applies specifically to mining companies. These disclosure requirements are therefore complementary because a mining company would provide a manufacturer with a Management Statement of Conformance, thereby assisting the manufacturer in its due diligence pursuant to the Dodd-Frank Act;
  • Section 1502 only applies to conflict minerals from the DRC region, whereas the Standard applies to a broader range of conflict areas, as determined by the Heidelberg Conflict Barometer;
  • Section 1504 applies to mining companies, just as the Standard does, but the former's purview is limited to mining companies listed in the U.S.;
  • Section 1504 applies to payments that equal or exceed $100,000 during the most recent fiscal year, whereas the Standard has no minimum requirement;
  • Section 1504 applies also to payments made by as subsidiary or another entity controlled by the affected issuer, whereas the Standard is silent on this point; and
  • Section 1504 provides no exception for instances where disclosure of payments may be prohibited by law or contract, whereas the Standard does provide such an exception.



The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.