Equivalency Benchmarks – Dealing with Audit Fatigue

Peter Sinclair
Senior Advisor
World Gold Council

Before I started working in mining, I thought the industry operated in a ‘wild west’ type of environment, where regulation was thin and companies were left to their own devices, as long as they paid their taxes. After 15 years in the industry, I know now the reality is very different.

The gold mining industry is one of the most heavily regulated in the world – and rightly so given the scale of our social and environmental impacts and our economic contribution. Aside from demanding national legal and regulatory requirements, mining companies are also subject to growing levels of scrutiny from a range of external stakeholders. Demands for higher standards and more transparency have come from governments, communities, investors, employees - even consumers of gold. This has coincided with – or arguably has led to – the sharp increase in focus on ESG improvements and reporting industry-wide, a welcome development that will further elevate performance on the ground and build trust in the marketplace.

The industry has also done its part to keep up pace with these increasing expectations. The World Gold Council demonstrated its leadership in the gold sector by launching the Responsible Gold Mining Principles back in 2019. The Responsible Gold Mining Principles (RGMPs) define what constitutes responsible gold mining across the full suite of ESG topics. The International Council on Mining and Metals (ICMM), an organisation focused on improving ESG performance across a broader range of metal producers, launched a similarly robust framework with their Mining Principles.

 

As the head of sustainability at a company which was a member of both World Gold Council and ICMM at the time, I was heavily engaged in the development and consultation processes which led to the creation of these two frameworks. Both organisations understood that external reporting and independent assurance of company performance against the standards were essential to build credibility and maintain the confidence of our stakeholders.

Accountability is critical to maintaining trust in our operations and in the integrity of gold. It is also important that such scrutiny is efficient and not unnecessarily duplicative. A common complaint around mine sites is of ‘audit fatigue’ due to the frequent reviews, inspections and audits associated with meeting a growing list of standards.

To partly address this challenge, a variety of international industry groups have worked together to develop “equivalency benchmarks” which identify where our performance frameworks effectively coincide and where provisions exceed each other. This helps eliminate the need for assurance providers to check the same point twice and enables them to focus on verifying the higher standards where they are not directly equivalent.

The first of these equivalency benchmarks, comparing the RGMPs and ICMM’s Mining Principles was released today. The two organisations have determined that about three quarters of the two frameworks are broadly equivalent. This is not surprising given the values of our organisations are very similar. Aside from increasing the efficiency of audits, the RGMP/Mining Principles equivalency benchmark will also provide an increased level of transparency on how our performance standards relate to other similar frameworks, something that we know our stakeholders want to see. 

 

Peter Sinclair is a Senior Advisor with the World Gold Council and formerly the Chief Sustainability Officer at Barrick Gold Corporation.