5-STEP risk-based supply chain due diligence framework：
1.Establish Strong Company Risk 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 Independent Third-party Audit At Identified Choke Points in The Supply Chain (as indicated in the Audit Protocols).
5.Report on The Process and Results of Supply Chain Risk Management
6.Huayou's Community Intervention Projects
Step 1 Establish Strong Company Risk Management Systems
1. Establish the corporate social responsibility steering committee under the direct management of the President, and the Corporate Social Responsibility Office shall be also set up.
2. Cooperate with international consulting agencies to establish cobalt supply chain due diligence procedure documents , and release company documents:
Huayou Due Diligence Policy for a Responsible Global Supply Chain of Cobalt （The Third Edition）
Suppliers’Code of Conduct of Zhejiang Huayou Cobalt Co., Ltd.
Supplier Standard for Responsible Sourcing of Cobalt
Step 2 Identify and Assess Risk in The Supply Chain
1. Teasing out and drawing supply chain map
2.Collect relevant information of all suppliers including compliance information, raw material information and due diligence information, through the way of questionnaire survey, site visit, network inquiry, complaint mechanism and external feedback.
3. Analyze the risks existing in the company's supply chain, and form risk assessment reports.
Step 3 Design And Implement A Strategy To Respond To Identified Risks
ASM mineral aggregate： Set up and implement responsible purchasing system -- Template Mining System
Other mineral aggregate： Establish and implement supply chain due diligence system
Step 4 Carry Out Independent Third-party Audit At Identified Choke Points in The Supply Chain (as indicated in the Audit Protocols).
Independent third parties are invited to conduct due diligence audit of Huayou cobalt supply chain including CDM audit and template mine audit.
Step 5 Report on The Process and Results of Supply Chain Risk Management
Huayou has set up a corporate social responsibility section on its website, where relevant information and work trends of social responsibility, supply chain Due Diligence System are published for reference and discussion by relevant parties.
At the same time, Huayou actively participated in the upstream and downstream meetings of cobalt industry while sharing and reporting the progress of due diligence of supply chain with relevant parties, and called on relevant parties to take actions together to start due diligence, and jointly create a more sustainable and healthy cobalt supply chain.
Step 6 Huayou's Community Intervention Projects
According to the CEGA research center at the university of California, Berkeley, on the causes of child labor in DRC shows that poverty is the root cause of human rights abuses including child labor. Investing in DRC for years, Huayou Cobalt realizes deeply that we should not only build the due diligence system of cobalt supply chain and model mining template, but also take a part in on-site projects such as community construction and education training to improve the local livelihood.