SHENZHEN ZHONGHENGLONG INDUSTRIAL CO.,LTD.
Document name: Due Diligence Policy of Gold/Silver Responsible Sourcing Supply Chain
Prepared by: Wei Shengkun
Reviewed by: Chen Junyu
Approved by: Liu Jingxu
Effective date:January 5, 2022
With the clear understanding of the possible adverse effects of mining, processing, importing and exporting metal products from conflict-affected areas and high-risk areas, as well as our responsibility to respect human rights and not support conflicts, our company will strictly abide by the national laws and regulations on the rights of employees, environmental protection, fair trade and other laws and regulations to ensure the legal source of gold and silver. For this purpose, we will carry out risk identification, assessment and management of the following risks identified in the gold and silver supply chain in accordance with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas(3rd edition):
I.On mass abuse of human rights arising from mining, transportation or trading:
1. Any form of torture and other cruel, inhuman or degrading treatment;
2.Any form of forced labor, namely, forced any person to work or provide service in a threatening manner in the case that he is not voluntary;
3. The worst form of child labour;
4. Other behaviors seriously violating and trampling on human rights, such as sexual violence and other crimes against and abuse of human rights;
5. War crimes, or other crimes seriously violating international humanitarian law, against humanity and causing genocide.
In case of violation against any of the above items of the upstream supplier, we will immediately interrupt or suspend the cooperation with the supplier.
II. On direct or indirect support to non-governmental armed groups or public or private security forces:
(including but not limited to, non-governmental armed groups, public or private security forces or their affiliates that commit the following acts):
1. Illegal control of mining sites or transport routes, metal trading places and supply chains by upstream suppliers;
2. Illegal extortion at the entry point of the mining site, along the transportation routes or at the metal trading places;
3. Illegal extortion of middlemen, export companies or international traders, financing for terrorist organizations, fuelling conflicts, etc.
In case of provision of or relation to direct or indirect support to non-national armed groups, public or private security forces from the upstream suppliers, or violation against any above items of the upstream suppliers,we will immediately suspend or interrupt the cooperation with the supplier.
III. On fraudulent misrepresentation of bribery, money laundering and mineral origin
1. Bribery offering and accepting, and fraudulent misrepresentation: behaviors such as putting forward, promising, offering and demanding any bribe, covering up or forging the origin of minerals, and bribery offering due to false statements on taxes, fees and royalties payable to the government for mineral mining, trade, processing, transportation, export and other activities.
2. In case of bribery offering, bribery accepting, or fraudulent misrepresentation of the upstream suppliers, or violation against any above items of the upstream supplier, we will immediately suspend or interrupt the cooperation with the supplier.
IV. On money laundering and anti-terrorist financing
1. Money laundering and anti-terrorist financing: money laundering risks and terrorist financing arising from or related to the mining, trade, processing, transportation or export of minerals obtained from illegal taxation or extortion at the entrance of the mining site, along the transportation routes, or at the mineral trading placesof the upstream supplier.
2. In case of any risks of money laundering and anti-terrorist financing of the upstream suppliers, we will immediately terminate the cooperation with the supplier.
V. On incompliance with taxes and royalties and management fees payable to the government in terms of mining, trade and export of minerals in conflict-affected and high-risk areas
1. The upstream supplier or mining area has not paid all the legal taxes, fees and royalties related to the mining, trade and export of minerals in the conflict-affected and high-risk areas to the government, and has not effectively disclosed such payments according to the principles of the Extractive Industries Transparency Initiative (EITI) based on the location of the upstream supplier in the supply chain.
2. If we determine that the upstream supplier has not paid the legal taxes, fees and royalties in the conflict-affected and high-risk areas and has not disclosed such payments in accordance with the principles of the Extractive Industries Transparency Initiative (EITI), we will immediately suspend or discontinue the cooperation with the upstream supplier (the Company will regularly (quarterly) update the list of EITI related countries to ensure that the list of relevant countries is correct).
VI. On risks of environment, social responsibility and governance in gold and silver mining supply chain:
1. Environment: pollution of air, water and land, gold and silver mining from world heritage sites or domestic natural ecological preservation area, and hazardous chemicals (including mercury and cyanide)
2. Labor: including compensation, working hours, collective bargaining, discrimination, diversity, disputes and protection of workers’ rights and interests.
3. Community participation and management scheme (land acquisition and community resettlement, cultural heritage sites and indigenous peoples, closure planning and protection of vulnerable groups).
4. Management of business integrity and ethical behavior, and support for the implementation of relevant initiatives (such as the Extractive Industries Transparency Initiative (EITI))
If we determine that the upstream supplier violates any of the above, we will immediately suspend or discontinue the transaction and connection with such supplier.
VII. It is forbidden to offer, promise, give or request bribes or kickbacks to individuals, including government officials, customers, suppliers or any other organizations in any way.
VIII. Our employees, suppliers and business partners are required to comply with the above policies and take necessary measures to ensure the implementation of the above policies.
In order to support and ensure the risk assessment and identification, the Company has set up the compliance director, compliance risk officer and compliance specialist, and clearly defined the responsibilities of each department. The implementation of definition provides training for employees to ensure that work is carried out properly. In addition, the supplier investigation procedure has been established to understand the supply chain and suppliers, so as to conduct sufficient risk identification and assessment, and relevant procedures and execution documents have been effectively kept.
Our company is open to the supervision of customers and relevant organizations, and welcomes suggestions from suppliers and the interested party on the above policies.
Contact phone number: 0755-25683238/0755-29500999
Contact email: firstname.lastname@example.org