Responsible Sourcing Newsletter: Disclosure Guidance, Compliance Reports & Training in China

In this edition, we focus on our Disclosure Guidance following a public consultation on proposed amendments, how Refiners can showcase risk mitigation in their Compliance Reports, and an overview of LBMA’s visit to China to carry out Responsible Sourcing training with the China Gold Association.

Disclosure Guidance Consultation Update

The public consultation for the proposed amendments to the Disclosure Guidance closed at the end of September.

The proposed changes relate to the proposed roadmap to fast-track transparency and disclosure of red flag suppliers and locations as outlined in Footnote 59 of the OECD Due Diligence Guidance.

LBMA is currently reviewing the feedback received from several entities covering the gamut of stakeholders (such as Refiners, civil society groups and downstream companies),with a view to finalising the document for implementation in January 2026.

Editorial - Showing Your Work: How Refiners Can Showcase Risk Mitigation in Compliance Reports

In this issue, Varsha Peiris (Standards & Assurance Manager, LBMA) highlights how Refiners can improve the detail and quality of their Compliance Reports by outlining how to undertake appropriate risk mitigation.

Responsible sourcing entails risk. There's no getting around it. How Refiners respond when the risks emerge - and how they document that response in their annual Compliance Reports – is an important part of the process.

During recent years, Good Delivery List (GDL) Refineries have seen requirements and public expectations of disclosure develop. Being aware of a supply chain's risk is not sufficient. LBMA’s Responsible Sourcing Programme not only requires Refineries to identify risks in the supply chain, but also to clearly show how they have taken measures to mitigate such risks through their due diligence policies.

Yet for many, the challenge isn’t in taking action - it's about documenting it effectively.

Mitigation of risks here refers to measures taken to reduce or contain risks emanating from the sourcing of precious metals.

What does good risk mitigation disclosure involve in practice?

Refiners will first have to clearly define the nature of the risk. Did a red flag warning emanate from the origin of the supplier, a lack of documentation, or a negative media report? General statements such as “enhanced due diligence was conducted” fall short. The lack of specificity may undermine both clarity and credibility that proper due diligence was done.

The second step is to describe what was done. Did the Refiner hold back shipments, conduct a site visit, request additional documentation, or onboard an external consultant? Such steps must be described in sufficient detail to reflect a deliberate, risk-based process that demonstrates how a Refiner gained comfort.

Timelines and decision points should also be included. For example, if they recognised a particular risk, what was their initial response, and how long did the mitigation process last? This helps Assurance Providers and LBMA to understand how responsive and methodical the Refiner was in their approach.

While respecting commercial sensitivities, Refiners are encouraged to be as transparent as possible in reporting the result of any mitigation in their Compliance Reports. How did the issue get resolved? Was the supplier under enhanced monitoring or was the business relationship discontinued? Doing so demonstrates not only the existence of certain policies but evidence of their implementation and strong governance processes.

Finally, Refiners are encouraged to reference their own risk appetite. Explaining why a decision was made to keep or end a relationship helps them demonstrate alignment with their supply chain policy and with the OECD Due Diligence Guidance.

Ultimately, Compliance Reports should reflect how robust a Refiner’s due diligence systems are. While one cannot eliminate risk entirely, the ability to demonstrate how a particular sourcing issue is managed is what builds trust — with stakeholders, Assurance Providers, and the wider marketplace.

As in the case of schoolwork, it's good practice to show your workings in an assurance.