Contract performance clauses may address sustainable issues within supply chains on condition that they are linked to the performance of the contract, for example the minimisation or avoidance of conflict minerals.
Where clauses in respect of conflict minerals have been built into the contract, performance monitoring methods must be developed to ensure delivery. This may include the provision of on-going evidence of conflict free status and independent verification of process methods.
Contractual requirements must be quantifiable and measureable; otherwise there is a risk that it may be unenforceable. The buyer must also consider whether this requirement is core to the contract or a secondary issue, as any remedy for breach of performance may be difficult to quantify. Specific requirements may include:
'The provision of yearly verification that products supplied do not contain conflict minerals.'
‘The provision of an annual summary of its due diligence and risk management measures consistent with the OECD Due Diligence Guidance’
‘Demonstration of support for institutional mechanisms to advance responsible sourcing of minerals consistent with OECD Due Diligence Guidance. Evidence could include for example participation and support of the Responsible Minerals Initiative, the Public-Private Alliance for Responsible Minerals Trade, and the European Partnership for Responsible Minerals, etc.’
‘Evidence of participation in in-region responsible sourcing programs/initiatives for Tantalum, Tin, Tungsten and Gold (3T+G), i.e. such as inclusion on the list of members to the initiative/program.’
‘A public list of its smelters/refiners of tantalum, tin, tungsten, and gold reported for its supply chain.’
At the point of potential award there is always scope to reach a voluntary agreement with the supplier that both parties will work together through the period of the contract to minimise or avoid the use of conflict minerals, and to deliver identified (and agreed) sustainable outcomes that can be captured as contract commitments.
Finally, on-going improvement and innovation can be built into the management of the contract to further develop the products and services required by the contracting organisation and key performance indicators can be developed in order to focus on areas where continuous improvement is sought.
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