Bullion industry takes steps to follow OECD norms on sourcing gold doré

After the government made it mandatory for importers of dore (unrefined) gold to have BIS (Bureau of Indian Standards) certification, the bullion industry is taking initiatives to ensure that the best practices are followed for sourcing such gold.

Rahul Gupta represented the Bullion Federation of India (BFI), a body of India’s large bullion traders, at a forum of the Organisation for Economic Co-operation and Development (OECD) in Paris. He said on the phone from Paris: “India should take steps to follow OECD guidelines on sourcing gold to ensure that conflict gold (those mined for financing armed forces or for illegal purposes) doesn’t enter India.” The diamond-processing industry the world over moved to stay away from blood diamonds two decades ago and started following the Kimberly process. The BFI will also make a representation to the commerce ministry.

Conflict gold is largely produced in Africa. Several European gold refiners have adopted OECD guidelines, which specify norms to be followed such as vetting suppliers and mines, and even checking know-your-customer norms to ensure conflict gold is not supplied.

In 2013 the OECD came out “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas”. The OECD defines dore gold in this manner: “Newly mined gold metal alloy after smelting to a high concentration, normally 85-90 per cent purity”. This dore has to be finally sent to refineries for converting it into commercial quality gold bars.

The BFI says: “There was lack of awareness in the trade and among regulators what these guidelines mean. The OECD has stated its intention to work closely with the government and raise awareness. The market is also changing, with more than 35 per cent of domestic supplies now coming through doré. However, small refiners are finding it difficult to source gold efficiently. Some are sourcing from alluvial operations, and some of it, domestic refiners now fear, may have been illegally mined.”