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CFSI is Committed to Support Indian Gold Refinery Industry

Marianna Smirnova, CFSI, discusses about what CFSI stands for, its work area and how it could support Indian refinery industry with Bullion Bulletin. Excerpts…

What is conflict-free sourcing of mineral and how are you contributing to this?

Conflict Free Sourcing Initiative or CFSI is an industry association. We have over 360 members across the industry segments. Apart from gold, we have members in electronic industry, automotive, aerospace and so on. The idea to bring all these industries together with their top brands in supply chain is to understand where these minerals come from. CFSI does help to develop independent third party standard to address the issues of responsible sourcing in general. So, we have audit program called Conflict Free Smelters Programme; we also audit gold refiners and 3Ts following OECD guidelines as well as other international and national laws.

For a gold refiner who wants to source gold from so called conflict area, how CFSI could help the refiner to source that gold ‘responsibly’?

CFSI works across the geographic regions of the world and therefore, CFSI will never say that you can not source gold from conflict affected area. Refiners can certainly source gold from anywhere, but they should aware of some areas are high-risk conflict area or potential for conflict. The area under conflict does not only confine to West Africa, but some countries in Latin America as well. What we provide the understanding of how one can identify the high risk and he could work with his suppliers to understand where this gold is coming from and tracing that. It is not concentrated only to KYC, but sometimes there is need for on-sight visit to facilitate the background checks to understand the supplier beyond the traders. Various occasions we found that refiners received gold from traders, but they really do not know where this gold has come from. So, we educate refiners to understand where the risk lies and then helping to address that risk. It is not about only risk free, but it also involved how to lower or mitigate that risk.

After following CFSI guideline, do I have to do additional Due Diligence Audit?

It is individual business. However, CFSI does have recognition agreements with LBMA, RJC specifically to minimize the number of audits one goes through. We also start working with Indian regulation bodies to really introduce the idea to them about ‘responsible sourcing’. It is really no matter what path refiner does chose to go through RJC or LBMA. Our aim is to encourage refiners to source gold responsibly and because of cross recognition if a refiner goes through CFSI, other two programmes automatically recognize and vice-versa.

In India, we are seeing now a strong uptick in refining business and at the same time, Indian lawmakers and other representatives in the supply chain have started to look at responsible supply issue. As you said, it is actually new subject here, but we actually see a lot of openness, desire to understand the topic. We are here to provide as much resources we have to support the industry.

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