In the last journal, we handled the topic CAMDS from our service offer. We have noticed that more and more customers are requesting support in this area. Now, the Chinese Due Diligence Guidelines for responsible mineral supply chains have been published in December 2015. This is one more reason for us to take up this topic once again in this issue and inform you on this subject.

What are the Due Diligence Guidelines?
Over the years, China has become aware of the responsibility of companies towards the environment and human rights. Today, behaving in a responsible manner towards the environment and humanity as well as taking appropriate measures to that end is an important competitive factor, since the consumers expect this from you and their actions are guided by this. In cooperation with the UN and based on the OECD guidelines on due diligence by responsible supply chains of minerals from conflict-affected and high-risk areas, the CCCMC (China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters) has drawn up the appropriate guidelines for the exercise of due diligence by Chinese companies. The results of a public consultation as well as the opinions expressed by industry organisations and select stakeholders in China have also been incorporated in these guidelines.
The objective of these guidelines is to align the due diligence practised by Chinese companies with international standards. They apply to all the Chinese companies that extract, use, transport or trade in mineral resources and related products as well as those that are engaged at any point in the supply chain of minerals. Companies that use other natural resources are likewise required to follow these guidelines. However, the implementation will initially be voluntary.
The term “Chinese companies” refers here to legal (profit-oriented) institutions that are registered in China, or foreign companies (including subsidiaries) that are wholly owned or majority owned by a Chinese institution.

Objectives and advantages of the guidelines
The guidelines are meant to help companies to comply with legal regulations, as well as to identify and avoid the risk of contributing to conflict and serious human rights abuses. The so-called conflict minerals (3TG, Dodd-Frank Act) and the Kimberley process are mentioned here as examples. Generally, the term “mineral resources” refers to all mineral resources and their related products (ores, mineral concentrates, metals, derivatives and by-products). Initially, however, the CCCMC will prioritise the supply chain of gold, tin, tungsten and tantalum as well as their related products.

Advantages of implementing the guidelines are:

• Increased ability to meet expectations of customers and markets in respect of responsible mineral resources.
• Better understanding, management and data collection of a company’s mineral resource supply chains, to enable more informed and strategic decision-making in sourcing strategies.
• Improving the reputation of participating companies and of the Chinese industry.
• Less disruptions in the supply chain caused by conflict and weak governance.
• Providing guidance for companies wanting to undertake supply chain due diligence in natural resources other than minerals.

However, the extent of due diligence that will be appropriate depends on the individual circumstances and is influenced by various factors such as the size of the company, the sector or nature of products or services involved, the role of the company in the supply chain and the prevalence of risks in the supply chain. These guidelines include resource-specific audit protocols and supplementary materials in the annex, which will provide guidance to companies on how to carry out appropriate due diligence.

The five steps recommended in the guidelines are:

• Establish a strong risk management system.
• Identify and assess risks in the supply chain.
• Design and implement a strategy to respond to identified risks.
• Carry out independent, third-party audit at identified bottlenecks in the supply chain.
• Report on the process and results of supply chain risk management.

Click here to access the detailed Chinese Due Diligence Guidelines in pdf format.

Material data entry for the Chinese market
CAMDS (China Automotive Material Data System) was introduced as early as 2012. In principle, it is the Chinese version of IMDS, i.e. a web-based product management platform for the automotive industry. By introducing CAMDS, the Chinese OEMs wish to comply with the recycling and recovery requirements (Chinese ELV) for automotive products. As of 2017, the recovery rate of Chinese vehicles and of vehicles imported into China should reach the international level. This implies that the recovery rate of all the manufactured vehicles should be 95 percent.

CAMDS is meant to ensure that the required reuse rate is adhered to and that prohibited substances are either not used or their use is restricted. Furthermore, it ensures that the recycling of Chinese automotive parts is improved. Same as IMDS, CAMDS presents a solution with which the chemical composition of automotive parts can be tracked across the entire supply chain. Similarly in CAMDS, bans and restrictions on basic substances, as described in ELV Annex II, for lead, mercury, Cr 6+ and cadmium, must be complied with.

CAMDS is mostly binding on its members (OEMs). These members decide whether the data of their suppliers must also be entered there.

At the time of introduction of the system (2009),15 OEMs were members of the CAMDS Steering Committee; three of them are joint ventures (SGMW = SAIC + GM + Liuzhou Wuling, Dong Feng Motor = DFAC + Nissan, DPCA = DFAC + Citroen).

Most of the OEMs in China (there are approx. 100, along with 20,000 to 30,000 suppliers) have meanwhile established a collective management committee, which is responsible for setting up, operating, servicing and maintaining CAMDS.

If you are an automotive supplier to China, you may be required to enter your material data sheets in CAMDS. For that, you will require knowledge of this database. The functionalities in the Chinese material data system are similar to those in IMDS. However, it is conceived differently in part and calls for a slightly different procedure.

Webinar:

In our 120-minute live webinar “CAMDS – Overview and Introduction” that will take place on 26th of May at 3 pm, we will introduce you to the use of CAMDS and will explain the most important functions to you. You may register by email to anmeldung@imds-professional.com or by filling our online form.

CAMDS Service:

Do you need advice on CAMDS or help in using it? Do you wish to outsource all the activities related to CAMDS? We will gladly take over these activities from you. Please feel free to contact us.