Guidelines for overseas mining deals announced

Firms urged to focus on sustainable practices and responsible sourcing

To help the nation's resource-oriented companies follow sustainable business practices abroad, the Chinese Chamber of Commerce of Metals, Minerals and Chemicals Imports and Exports released its Guidelines for Social Responsibility in Outbound Mining Investments last Friday.

The guidelines were drafted in association with the Ministry of Commerce and the German development agency GIZ.

"Lack of social responsibility is becoming one of the biggest obstacles for Chinese mining companies in their overseas business," said Sun Lihui, director of the chamber's liaison office, adding that the guidelines will help companies evaluate their corporate social responsibility efforts and improve China's mining investment in emerging regions.

The guidelines provide standards on labor, environmental protection, supply chain due diligence, community engagement and human rights.

Chinese companies are going global, and part of that means seeking mineral resources to meet the needs of the nation's growing economy. But these capital-intensive mining projects have been one of the most sensitive areas to invest in, especially in foreign countries.

The guidelines said that the sustainable development of mineral resources requires continuous public trust and stable legal, political, social and economic environments.

"As for Chinese mining companies engaged in outbound investment, specific CSR issues with regard to mineral development - such as improving production efficiency, ethical and fair operations, providing safe working conditions, minimizing environmental pollution, avoiding contributing to armed groups or sourcing 'conflict minerals', and improving the lives of the local community - should be the major focus," the guidelines said.

The London-based international nongovernmental organization known as Global Witness, which focuses on natural resource-related conflict and corruption, offered support for the guidelines and published a briefing paper titled Tacking conflict minerals - How a new Chinese initiative can address Chinese companies' risks.

The paper provides information for Chinese companies on supply chain due diligence. Those checks help the companies avoid sourcing from conflict-affected and high-risk locations.

Lizzie Parsons, senior adviser of Global Witness, said that the reasons for conflicts in resource-rich countries are complex, but mineral trading and mining exploration contribute the most to those conflicts.

"The companies have a responsibility to conduct supply chain due diligence to ease the conflicts," she said.

"It's time for companies to take up the challenge of bringing the guidelines to life and show themselves to be responsible global corporate citizens."

Zhang Jianping, a senior researcher at the Institute for International Economic Research at the National Development and Reform Commission, said that the chamber needs to conduct strong educational and training efforts to ensure implementation of the guidelines.

"Mining is a huge sector with hundreds of thousands of companies," he said.

"The large State-owned enterprises possess the capital, talent and technology to conduct CSR, while many other small and medium-scale private companies need further support on their CSR issues in overseas businesses with limited capital and resources."

Zhang said the guidelines are the first to target CSR for outbound mining investment, and many other industries in China need such guidelines.