The Dubai Multi Commodities Centre (DMCC), the licensing authority for the Jumeirah Lakes Towers Free Zone, has today issued a risk management reference manual, entitled: ‘Practical Guidance for market participants in the Gold and Precious Metals Industry’ (guidance or document). Its purpose is to assist DMCC-licensed members and other industry participants in the UAE to enforce acceptable standards of due diligence and responsible supply chain management when sourcing gold and precious metal from conflict-affected and high-risk areas. The document is based on Due Diligence Guidance on gold trade issued in Spring 2012 by Organisation for Economic Co-operation and Development (OECD).
DMCC has worked with the OECD advisory group which developed the responsible gold guidelines and has engaged Dubai based gold refiners, traders, companies and representatives to facilitate their implementation in an efficient and cost-effective manner. The document incorporates a ‘5-Step’ framework that relies on each stakeholder within the supply chain to collectively work together to ensure due-diligence is carried out at the highest level.
Ahmed bin Sulayem, Executive Chairman, DMCC said: ““The premier position of Dubai as a global trading hub for precious metals is testament to DMCC’s success in enhancing commodity trade flows through the Emirate. DMCC recognises the imperative to ensure that Dubai remains at the forefront of this global trade sector, which requires the highest regulatory and ethical standards for both our member companies and the global trade of gold. The objectives of the guidelines are three-fold: to provide clear benchmarks; to ensure all efforts are made to produce conflict-free gold; and to enable companies to continue to operate in difficult investment environments.
Sustainable development requires that an appropriate balance be struck between economic, environmental and social goals. Finding that balance is not an easy task, but we are working diligently to lead that effort in the UAE and to the benefit of the local and regional market players.
The guidance ensures best efforts are made to reduce companies’ risk of procuring conflict-free gold while not inhibiting trade. It proposes the creation of a DMCC certificate, which would be made available to participating DMCC members initially and eventually non-members. DMCC has developed a comprehensive review programme which will be conducted on a periodic basis for companies to maintain the DMCC certificate.
Today, Dubai is one of the foremost gold centres in the world, with import and exports numbers totalling 580 tonnes ($25 billion in value) in the first three quarters of 2011. By serving as an exemplar and issuing this document, Dubai, through the DMCC, is becoming a global leader in the gold industry and setting the standard for others to follow.
The Practical Guidance document will be made available at the Dubai Precious Metals Conference (DPMC), which takes place on the 29 and 30 April 2012 at the Almas Tower in Jumeirah Lakes Towers. The conference will cover trends and latest development in the global precious metals market, such as the trade of gold, risk management and trade finance; as well as examining several issues such as marketing, technology and regional growth and opportunity.