A group of European bodies and companies have joined
efforts to create the first global certification scheme ensuring consistent
standards of environmental, social and economic impact throughout the entire
raw materials value chain, to be launched next year.
CERA (CErtification of RAw Materials), conceived in
2015 by German engineering and consulting firm DMT Group, counts with the support
of the UN Economic Commission for Europe, the European Commission’s Joint Research
Centre (JRC), EIT RawMaterials, Volkswagen, Fairphone and research institutions
from across Europe.
Companies are under pressure from consumers and
investors to prove that minerals are sourced without human rights abuses but
tracking raw materials throughout their journey is challenging.
There currently are at least 40 different certification
methods for the mining industry alone and the number increases exponentially
when considering the entire value chain. Some are specific to a geographic
region, process or humanitarian concern, while others tackle a single mineral.
An additional barrier for the current certifications
to work, is that most of them are complex, expensive and inconsistent, says Andreas
Hucke, CERA Project Director, Head of Raw Materials Sustainability at DMT.
“This resulting in different approaches to how
sustainability and ethics are defined from country to country, mineral to mineral,
and company to company,” Hucke says. “CERA solves those problems”.
The certification process will be carried out using a private blockchain while its verification and search will be available on a public blockchain. The technology, the same that’s behind cryptocurrency bitcoin, provides a shared record of data held by a network of individual computers rather than a single party.
Formal CERA pilot projects addressing sustainability
in the exploration, extraction and processing of lithium and cobalt will
commence in late 2019.
There are several other blockchain projects focused on
proving the authenticity of commodities and products.
Responsible-sourcing group RCS Global is helping IBM develop a cobalt traceability solution for Volkswagen, Ford and others.
World’s No. 1 diamond producer by value, De Beers, is
in the advance stages of testing its Tracr platform, which allows tracing gemstones
throughout the entire value chain — from mine to buyer.
Current regulations includes the EU’s Conflict Minerals Regulation, a law covering the sourcing of tantalum, tin, tungsten and gold – or ‘3TG’, which will come into force next year. Those rules are based on the Organization for Economic Co-operation and Development’s (OECD) guidance for sourcing minerals from conflict-affected and high-risk areas. It requires companies to prove they are investigating due diligence within their supply chains. The law is restricted, however, to those four commodities.
Other metals are covered by the Responsible Raw Materials Initiative (RRMI), an industry-led due diligence process supported by tech giants such as Apple, Microsoft, Samsung and electric car developers Renault, Ford and General Motors. Abiding by such initiative, however, is voluntary.
In the next weeks, CERA will be
identifying pilot project partners for Chain of Custody, set to begin in 2020. It
will receive applications from 2020 and issue first certificates in 2021.