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LondonBullion
MarketAssociation
(LBMA)
ResponsibleGoldGuidance–AuditSummaryReport(ISO19011:2011)KENNECOTTUTAHCOPPERLLC28March2017
ASSESSMENTINFORMATIONRefinerName: KennecottUtahCopperLLC
RefinerLocation: RioTintoRegionalCenter4700DaybreakParkway,
SouthJordan,USAandKennecottUtahLLCPrevious
MetalsPlant,(2100S15000W),USA.
RefinerContactPerson:Name,Title:
Email:
Phone:
MsIlseSchoeters
ManagerGlobalProductSafety&Stewardship
Ilse.Schoeters@riotinto.com
+32495900789
Leadauditorandauditteammembers Dr.NicholasGarrett,RCSGlobal
Datesandplaceswheretheonsiteassessmentactivitieswereconducted
March8and9,2017
RioTintoRegionalCenter4700DaybreakParkway,
SouthJordan,USAandKennecottUtahLLCPrevious
MetalsPlant,(2100S15000W),USA.
LBMARefinerAssessmentReportAssessmentobjectives:Thepurposeoftheauditwastoassesswhetherprocedures,processesandmanagementpracticesofthegold
refinercomplywithLBMAResponsibleGoldGuidance.
Assessmentscope:Refinerlocation(s)includedintheassessmentscope
RioTintoRegionalCenter4700DaybreakParkway,SouthJordan,USAand
KennecottUtahLLCPreviousMetalsPlant,(2100S15000W),USA.Allmentioned
facilitieswerevisited.AssessmentPeriod January1,2016–December31,2016
Assessmentmethodology:Theauditorusedatriangulationoffindingstoevaluatetheexistenceandimplementationofappropriate
systemsattheRefiner,addressingallareascoveredbytheLBMAResponsibleGoldGuidance.
Theassessmentwasundertakenatthesametime,asanauditoftherefinerforcompliancewiththe
ResponsibleJewelleryCouncil’sChainofCustodystandard.Thisisevidentfromtheauditplanprovided
furtherbelow.
InordertorevieweveryaspectoftheResponsibleGoldGuidancetheAuditorundertookadocument
review,interviewedmanagementandemployees(seelistfurtherbelow),andundertookobservations
duringawalk-throughofthepreciousmetalsplant.Inaddition,theauditorreviewedasampleof
supplierfilesandtransactionalfiles.
WhileduediligenceaspertheRGGneedstobeexercisedongoldsuppliers,noCountryofOriginAnnex
needstobecompletedaspartofthisauditastherefinerydoesnotsourceminedgold.Allgoldproduced
byKUCisderivedfromminingbyproduct(anodeslimes)withgoldperse,firstemergingasgoldinRio
Tinto’spreciousmetalsplantonRioTinto’sproperty.
RCSGlobal 3
KUCpresentedthefollowingdocumentswiththeauditorforreviewandtheywerereviewedduringthe
courseoftheaudit:
• http://www.riotinto.com/aboutus/policies-standards-and-guidance-5243.aspx; Standards and
Guidanceonlineoverview.
• SamplesupplierfilesforsupplierfilecheckasperRGGrequirement.
• TheWayWeWork(June2015edition)
• RioTintoManagementSystemHSEC-B-01(effective1April2015)
• HSEQ15-003DataandRecordManagementStandardOperatingProcedure
• Threesamplesofcopperconcentratestoilingagreement(contracts)
• RioTintoResponsibleJewelleryCouncilChainofCustodyScopeDocument(lastrevised6January
2017)
• MKTGSOP-002 Operating Procedure External RawMaterial Purchasing (last revised 6 January
2017)
• KennecottUtahCopperLLCConflictFreeMineralsPolicy
• MKTGSOP-001StandardOperatingProcedurePreciousMetalsOrderManagement
• SampleInvoicesusedasChainofCustodyTransferDocuments
• Sample country of origin certificates (two), including follow up correspondencewith suppliers
(one)
• ManagingExternalInquiriesbriefingnote2017
• Samplesalesdocuments(two)confirminglogousageanddepictinggoldsales
• InternalMemoSupplierRiskAssessment2015
• InternalMemoGoldInventoryProcess
• BrinksSupplierRiskAssessment(2017)
• EmployeeTrainingschedule2017
• OctoberandNovember2016preciousmetalsreport
• Goldbarlist
• SAPdataentryformsandExceltrackingsheetforfinishedproducttracking
• RioTintoBusinessSolutiondataentryformforincidentreporting
• “ListenUp”platform(online)
• SamplesofCoCManagementMeetingrecords
• Sample email correspondence communicating the Conflict Free Policy to suppliers for three
suppliers
• Trackingsheetforactivecustomers
• SampleConcentrateTollValuation2015_03_18
• Sample extracts of Refinery Production and Inventory Report July andOctober andNovember
2016
• RioTinto5x5RiskAssessmentMatrix
Statementoftheconfidentialnatureofthecontents:Allthedatacontainedintheassessmentreport,aswellasallinformationobtainedduringthe
performanceofthecertification,isprivateandconfidentialbetweentheauditingbodyandtheRefiner.
Anysignificantorinherentlimitationsorareasnotcoveredthatwerewithintheassessmentscope:
RCSGlobal 4
Therewerenosignificantorinherentlimitationsorareasnotcoveredthatwerewithintheassessment
scope.
Assessmentcriteria:• Theauditororassessmentteamtookintoaccountallrelevantobjectiveevidenceprovidedby
theRefiner.Relevantevidencewaseitherqualitativeorquantitativeinasfarasitisappropriate
andsufficienttosupporttheauditororassessmentteam’sconclusions.Appropriateevidenceis
evidencethatisrelevantandreliable.Sufficientevidencereferstotheamountofevidence
providedtoallowtheauditororassessmentteamtoreachaconclusion.�
• AnyactualorpotentialgapsintheRefiner’ssystemsinregardstotheLBMArequirementsare
ratedinaccordancetothelevelofriskeachpresentstothecredibilityandintegrityoftheLBMA
ResponsibleGoldProgrammefortheresponsiblesourcingofgold-bearingmaterials.�
Assessmentplan:Thursday,9March2017(Day1:LBMAandRJCmanagementsystems:DocumentationreviewandInterviews)
Time Activity Attendance08.00–08.30am ArrivaloftheauditoratKennecottUtahCopper,Rio
TintoRegionalCenter.Securityscreeningand
induction.
08.30–09.00am OpeningMeetingwithKennecott’sManagement
Teamtoreviewthepurpose,scopeand
methodologyoftheassessmentandclarifyrequired
documentation.Themeetingshouldaddress:• Anyoperationalchanges,challenges,and
impactofchangesthatmayaffecttheentity’s
performanceinregardstotheRJCCoCorthe
LBMAResponsibleGoldGuidanceStandards;• Finaliseinterviewscheduleaswellasidentify
responsiblepartiestoassisttheauditor
throughouttheprocess.
KennecottManagement
Team,incl.:
• Geoff Green -
General
Manager Sales
and Marketing
Copper Cathode
andBy-Products
• Steve Egan –
Marketing
Manager -
Precious Metals
&SulfuricAcid
• James Goh -
Commercial
Executive
• DavidNewman -
Account
Executive
Copper
• Troy Colwill –
Acting
Superintendent-
RCSGlobal 5
PreciousMetals
• Aaron Smith -
Advisor - HSEQ
Assurance
• Ilse Schoeters -
Manager Global
ProductSafety&
Stewardship
Managementinterviewsanddocumentreview:
09.00–11.00am LBMA:OverviewoftheEntity’spoliciesandinternal
managementsystem• GeneralunderstandingoftheEntity’sdue
diligencemanagementsystemsinplaceto
complywiththeLBMAResponsibleGold
Guidance5stepframeworko reviewofduediligencepolicyo internalmanagementstructureto
supportsupplychainduediligenceo internalsystemofduediligence,
controlsandtransparencyovergold
supplychain,includingtraceabilityo engagementwithcounterpartieso employeetrainingandcommunication
RJCreview:systemsinplacetocomplywithRJC
ChainofCustody(CoC)StandardRJC:1.1,1.2,1.6,
10.1,10.3
Kennecottmanagement
teamexceptGeoff
GreenandDavid
Newman.
11.00-11.45am RJC:Reviewofrecord-keeping,complaintsand
employeetrainingmechanisms.RJC1.3,1.4,1.5,
10.3
Asabove.
11.45–12.15pm RJC:ManagementSystemsfortheRJCCoCStandard,
ConsumerClaimsandIntellectualPropertyRights
RJC:9.3(1.3,1.4)
Asabove.
12.15-12.45pm RJC:Reviewofinternalmaterialcontrol
mechanisms.RJC:2.1,2.2,2.3,2.4Asabove.
12.45-01.30pm LunchBreak 01.30-02.30pm RJC:Reviewofsystemsforeligiblematerial
declarationsandRJCChainofCustodytransfer
documentation.RJC:7.1,7.2,7.3,8.1,8.2,8.3,3.1,
3.2
Asabove.
3.00–3.45pm LBMA:• Identifyingrisksinthesupplychain• Assessingrisks• Reportingriskassessmenttosenior
management
KennecottManagement
TeamexceptGeoff
Green
03.45–04.15pm RJC:Sourcingofgoldinputs,riskmanagementfor KennecottManagement
RCSGlobal 6
Friday,10March2017(LBMAResponsibleGoldandRJCCOCPhysicalobservations)
Time Activity Attendance08.00–08.45am TransfertothePreciousMetalsPlant 08.45–09.00am ConversationwithManagerofPreciousMetalsPlant • James Goh -
Commercial
Executive
• Troy Colwill
– Acting
Superintend
ent -
Precious
Metals
• Aaron Smith
- Advisor -
HSEQ
Assurance
09.00–10.30am LBMAandRJC:
FullwalkthroughofthePreciousMetalsPlant:• Reviewofinternalmaterialcontrolmechanism;• Verificationoftypeofgoldmaterialreceived;• Selectionofemployeesforinterviews.
• EmployeeInterviews.
Asabove.PMP
employees:
- Operatorsthatenter thedata:Bryan Orullian and
ClintDorrance
- PMsupervisors thatmanage the data:TroyColwillandDan
Ervin
- Shippingclerk:BarryCook
servicecompaniesandconflict-freesourcing.RJC:
4.1,4.2,10.1,10.2,10.4TeamexceptGeoff
Green04.15–04.45pm LBMA:Riskmanagementplanandriskmitigation
measures
LBMA:Reviewofsupplierfilesandtransactionalfiles
KennecottManagement
TeamexceptGeoff
Green04.45pm–05.15pm
LBMA:Reportingonduediligence KennecottManagement
TeamexceptGeoff
Green05.15–05.30pm ShortdebriefwithKennecottmanagementteam. KennecottManagement
TeamexceptGeoff
Green05.30pm Auditorleavesthefacility.
RCSGlobal 7
1030.–11.00am TransfertotheRioTintoRegionalCenter
11.00am–12.00pm
ClosingmeetingwithKennecott’smanagementteam:
• Recapitulationofauditfindingsandconclusions.
• Nextsteps.
Kennecott
ManagementTeam
exceptTroyColwill
12.00pm Auditorleavesthefacility.
Listofattendeesofopeningandclosingmeeting Interviewswereconductedwiththefollowingpersonsandtheyalsoattendedtheopeningandclosing
meetings:
• GeoffGreen-GeneralManagerSalesandMarketingCopperCathodeandBy-Products
• SteveEgan–MarketingManager-PreciousMetals&SulfuricAcid
• JamesGoh-CommercialExecutive
• DavidNewman-AccountExecutiveCopper
• TroyColwill-PreciousMetalsOperationsSupervisor–ActingSuperintendent
• AaronSmith-Advisor-HSEQAssurance
• IlseSchoeters-ManagerGlobalProductSafety&Stewardship
RefinerfeedbackThe review of documentation, interviews and walkthrough with KUC personnel showed that KUC
implements,maintains and improves robustmanagement systems coveringall aspectsof the LBMA’s
ResponsibleGoldGuidance.Nonon-conformanceswereobserved. RCSGlobal thanks KUC’s team for
theircooperationthroughouttheauditprocessandtheircommitmenttocontinuousimprovement.All
suggestedbusiness improvementswerediscussedandagreeduponwith themanagement team.The
refineracceptedtheassessmentresult.
Assessmentfindings:
Category/subcategory Non-compliance/Observation:Includeevidencefoundtosubstantiatethenon-complianceaswellasfrequencyofitsoccurrence.
Recommendedcorrectiveaction
Timeframeforimplementingcorrectiveactions
Refinercomments
- - - - -
Assessmentconclusions
Compliant Low Medium HighZeroTolerance
Basedontheaboveassessmentconclusions,theoverallratingofthe
Refiner’sperformanceisdeterminedtorepresent:
X
ASSESSMENTCONCLUSIONS
RefertotheLBMAThird-PartyAuditGuidance,Appendix1todeterminethelevelofconformanceforeachsub-category1.
NonCompliance–risklevel CATEGORY SUBCATEGORY
Compliant Low Medium HighZero
ToleranceA. GeneralInformation
B. Step1:
EstablishstrongRefinermanagementsystems1.1: x
1.2 x
1.3 x
1.4 x
1.5 x
1 LBMA Responsible Gold Programme -Third Party Audit Guidance. Appendix 1: Definitions of Non-compliances. Pg. 42.
ASSESSMENTCONCLUSIONS
RefertotheLBMAThird-PartyAuditGuidance,Appendix1todeterminethelevelofconformanceforeachsub-category1.
NonCompliance–risklevel CATEGORY SUBCATEGORY
Compliant Low Medium HighZero
ToleranceC. Step2:
Identifyandassessriskinthesupplychain2.1 x 2.2 x 2.3 x
D. Step3:
Designandimplementamanagementstrategytorespondtoidentifiedrisks
3.1 x
3.2 x
E. Step4:
Arrangeforanindependentthird-partyauditofthesupplychainduediligence
4.1
x
F. Step5:
Reportonsupplychainduediligence5.1 x
5.2 x
5.3 x
TheAuditorsconfirmthat:ü TheinformationprovidedbytheRefineristrueandaccuratetothebestknowledge
oftheAuditor(s)preparingthisreport.ü ThefindingsarebasedonverifiedObjectiveEvidencerelevanttothetimeperiodfor
theassessment,traceableandunambiguous.
ü The Auditor(s) have acted in a manner deemed ethical, truthful, accurateprofessional,independentandobjective.
ü The Auditor(s) are properly qualified to carry out the assessment at this Refiner’s
facility.
LeadAuditor:Dr.NicholasGarrett
Signature:
Date:28March2017
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