Refineries importing gold will be audited by auditors trained by experts
India is planning its own standards for gold refiners. Known as Indian responsible mineral sourcing guidelines, these are being worked out on the lines of rules set out by the Organisation for Economic Co-operation and Development (OECD).
In the first phase, norms for dore, or unrefined gold, will specify that it is not imported from mines that use child labour or if money is used for terrorist funding or illegal or anti-national activities.
The first meeting of the working committee for the guidelines decided the regulatory model would be in line with the London Bullion Market Association, with government oversight.
“Aligning with the OECD due diligence guidance, the international benchmark, will ensure that the Indian responsible mineral sourcing guidelines are recognised in other markets
and meet the expectations of banks, customers, and clients based overseas,” said Tyler Gillard, head of the responsible business conduct unit, investment division, directorate for financial and enterprise affairs, OECD. He attended the working committee meeting.
“The OECD guidance is flexible and can be adapted to specific market characteristics in India, as has been done in London, Dubai and China. This flexibility includes adapting approaches to build on existing checks on imports of bullion and gold dore,” he added.
After dore import norms by refiners are compiled, India will have standards for gold refineries. India needs separate norms because 25,000 tonnes of gold are held by households in the country and the rules must take into account old gold that is sold in the market. Once these norms are in place, India should be able to export gold.
“The government should at some point in time consider allowing export of gold bars refined by Indian refineries after the country implements responsible gold sourcing guidelines,” said Rahul Gupta, director, Bullion Federation.
Bullion Federation which constitutes refiners as founding members have read through the draft guidance prepared by India Bullion & Jwellers Association and have provided feedback on same. This shall become the starting point on creating IRMS Guidelines
“It is now up to the Indian industry to work together and develop the Indian guidelines, and more importantly, a robust audit mechanism. We encourage any audit of refiners to be overseen by a group of industry associations,” Gillard said.
Refineries importing gold will be audited by auditors trained by experts and mostly the big accounting firms shall conduct them. The Bureau of Indian Standards has asked bullion refineries to register with it by May 2018.
“The government could play a key role in ensuring a level playing field for refiners by eventually requiring them to go through this industry-led responsible gold audit, so that everyone in India plays by the same rules,” Gillard added.
New norms soon
As of now, there are no guidelines for importing unrefined gold to India
China, Dubai and many other companies follow OECD guidelines for dore import
India plans to frame its own guidelines suitable for Indian bullion refining and jewellery business chain
India needs separate norms because 25,000 tonnes of gold held by households in the country, the rules must take into account old gold sold in the market
Refineries importi from old will be audited by auditors
Around 200 tonnes of dore is imported by India per annum