The Organization for Economic Co-Operation and Development (OECD) has developed a Five-Step Risk-Based Due Diligence Framework (Five-Step Framework), which is increasingly becoming central to all initiatives aimed at keeping conflict minerals out of supply chains, and could become the basis of many other initiatives aimed at promoting responsible sourcing practices. The framework includes the following steps:

1. Establish strong company management systems.
   
2. Identify and assess risk in the supply chain.
   
3. Design and implement a strategy to respond to identified risks.
   
4. Carry out an independent third-party audit of supply chain due diligence at identified points in the supply chain.
   
5. Report on supply chain due diligence.
   

The Five-Step Framework should be viewed in the context of a process to better understand your supply chain and the source of raw materials, and better identify and address risks, rather than as an end result. Demonstrating a due diligence process and compliance with applicable standards is equally as important as stating the elements of the process.

With these basic steps and overall principles serving as a foundation for a generic risk-based due diligence program, the OECD establishes supplemental guidance for individual sectors, such as minerals, and apparel and footwear.

A risk-based approach focuses resources more efficiently on the areas needing more attention. In the case of conflict minerals, the Conflict Free Smelter Initiative (CFSI) has identified areas of high risk and due diligence expectations, including which documents should be obtained for each transaction (purchase orders, transportation documents), along with additional requirements for transactions originating in high risk regions (mine license, export license, chain-of-custody, etc.). These requirements place the onus on the processor to be accountable for all material that they purchase and/or process.

Under both the Five-Step Framework and the CFSI, all processors - regardless of whether or not they source from high-risk regions - would have to meet minimum standards for all policies and supporting procedures, including management systems, due diligence (risk assessment, supplier engagement, document requirements), and public reporting.

Establishing a common set of due diligence standards, such as the Five-Step Framework, across an industry or multiple industries would minimize confusion among various stakeholders and increase efficiencies. It could eventually become a global standard for due diligence programs and evidence disclosures in various supply chains - even with the need to address unique conditions for particular industries (agriculture versus apparel manufacturing, for example). Additional benefits could likely include improved supplier-buyer relationships and increased pressure on governments in high-risk regions to address illegal activities within their borders, leading to easier access to markets.

What excites me the most about the Five-Step Framework is that it provides clear and consistent guidance on what is expected of supply chain actors. The initial processors and upstream manufacturers are often in the best position to drive positive change further up the supply chain through their relationships-and direct influence-with suppliers. They can truly become our engine of change if directed and supported to do so. If buyers clearly communicate what is required of processors to sell their products, most processors will do their best to meet these expectations.

With this said, establishing expectations and providing guidance is only the first step. We will need to help these actors establish and implement effective due diligence programs through trainings, outreach and assessment (audits may serve this purpose). Here are some of the areas where supply chain actors could use support in gaining a better understanding:

• Developing protocols and sourcing policies
• Conducting sufficient due diligence of their suppliers
• Communicating expectations to suppliers, including encouraging participation in an industry initiative (the CFSI, for example) when appropriate
• Ensuring that management systems are optimized
• Collecting, reviewing and retaining appropriate evidence to validate origins

The actors with truly effective due diligence programs - programs that include supporting sourcing policies, communicating expectations to suppliers and conducting due diligence of these suppliers - can, in turn, help their suppliers to improve their own due diligence programs and practices, thereby spreading the positive change up and across entire supply chains.

I hope all industries, initiatives, multinational enterprises, and individual supply chain actors will embrace the OECD's Five-Step Framework and begin implementing appropriate due diligence of material they purchase. Go here to learn more about OECD's Five-Step Framework and other guidance for multinational enterprises.

I have spent some time researching and analyzing the global fisheries industry as well as working with other commodities with the aim of improving the conditions under which raw material are produced. Understanding how commodity supply chains are structured will be helpful when designing a system that stretches from raw materials to end product. I believe the fisheries supply chain (with a focus on wild fisheries) is a good example to illustrate this point and to provide a model to apply to this or other industries.

There are three distinct segments that exist in the wild fisheries supply chain:

1. Production, including fishing vessels, traders and consolidators
2. Initial processing (and mixing), where the strongest control points exist and traceability to origin can still be validated, warranting specific attention
3. Manufacturing-to-retail, integrating existing initiatives or sourcing models

The fisheries supply chain is complex and vast, and currently includes fish caught through illegal, unreported, and unregulated fishing (IUU) - fishing conducted in violation of national laws or internationally agreed upon conservation efforts - or other illegal activities (forced labor, human trafficking) that take place at the point of production (at sea). Developing and implementing an effective global initiative to combat IUU and other human rights violations will be a massive undertaking. Such an initiative can be kept manageable and effective if it aligns separate, yet synergistic, efforts across these three separate segments of the supply chain.

I propose the following general outline of elements of a global initiative to address such illegal activities for each segment of the supply chain:

1) Production segment
We need establish standards and criteria that assure raw material was produced legally. We also need to focus on educating producers about what illegal activities they should avoid, why avoiding those practices is important (including possible market access to responsible brands), and how they can implement processes to avoid such illegal activities. 
 
The initiative should identify a means of assessing and validating materials produced under legal conditions (government permits and licenses, export documentation, etc.).

Other external stakeholders, such as non-government organizations (NGOs) and specialized businesses, may be required to take some of the following actions: develop and implement chain of custody systems; conduct audits to validate legal facilities or fishing vessels at production; or provide a program to educate and train producers on responsible solutions, for example.
 
2) Initial processors
Initial processors should be a focal point of any initiative because they have more direct relationships with raw material suppliers and are the main actors at the point where raw material origin is often lost as material is mixed and transformed into a manufacture-grade product.

Processing facilities should establish policies, procedures and supporting management systems as well as conduct proper and higher quality due diligence - and drive these efforts up their supply chains. Most likely, processors will take policy changes more seriously if they are not allowed to receive any suspect or illegal material into their facilities - as opposed to allowing them to segregate validated legal material from "other material" that is not inspected - and if non-compliance status puts their sales at risk (if the majority of their buyers require compliance status, for example).

Supply chain actors will likely require training and support as they develop and conduct the initial implementation of new policies, protocols and management system processes. Criteria and expectations should be clearly articulated, easy to understand, and achievable.

An initiative should assess initial processors' policies, management systems and due diligence programs, and make results publicly available.

3) Manufacturing-to-retail segment
Brands are in the best position to encourage their suppliers to participate and to ensure that they follow through on participating in a given initiative, including providing disclosures for their supply base and material origin (with some protections for proprietary data) through their existing relationships with these suppliers.

Brands should work with their suppliers to conduct their own due diligence along the manufacturing-to-retail segment of the supply chain, linking with the global initiative on the production and processing stages of the supply chain. Ideally, the fisheries industry - or other commodities - can come together to develop one consistent system (or questionnaire) to address this segment of the supply chain to minimize the impact to supply chain actors and avoid "survey fatigue." Periodic audits of each segment system from the initial processor to retailer should be conducted.

If industry players succeed in developing and implementing efforts for each of these three distinct segments, the various stakeholders will then be able to focus on what is within their realm of influence and align with the function they play in the overall industry. Bringing the separate, yet synergistic, efforts of each segment together under one overarching initiative can then help to spread these efforts - and a common set of expectations - across the entire industry. Once this occurs, real, scaleable and sustainable change is possible.