ICMI Announces Code Changes Authorizing Pre-operational Certification of Cyanide Production Facilities and Transporters and Providing Additional Guidance on Recertification Audits

The International Cyanide Management Institute (ICMI) today announced changes to the International Cyanide Management Code for the Manufacture, Transport and Use of Cyanide in the Production of Gold (Code) and its implementing documents. These changes authorize pre-operational certification of cyanide production facilities and cyanide transport operations, and provide additional guidance with respect to how past deficiencies should be addressed in Code recertification audits. In addition, revisions have been made to several Code documents to clarify that storage of cyanide in a warehouse prior to delivery to a mine is considered to be a production activity under the Code and must be evaluated for certification using the Cyanide Production Verification Protocol. The changes are effective today, January 24, 2011, and the revised documents are posted on the Code web site. French and Spanish translations of all revised documents will be posted as soon as they are available.

Pre-operational Certification of Cyanide Production and Transport Operations: The Code currently allows a gold mine that is not yet operating to be audited for certification based on its design documents, draft management plans and procedures, and other written commitments to design, construct and operate the facility consistent with the Code’s Principles and Standards of Practice. However, this same opportunity has not been available to cyanide producers or cyanide transporters. Changes to the Code and its implementing documents being announced today authorize pre-operational certification of these facilities in a manner nearly identical to that for gold mines. Pre-operational certification is conditional, and requires that these facilities undergo full Code certification audits to demonstrate that they have been designed and constructed, and are being operated, consistent with the commitments made by the company to comply with the Code. However, while this confirmatory audit for pre-operationally certified gold mines must be conducted within one year of the mine’s first receipt of cyanide, the process announced today shortens this timeframe for pre-operationally certified producers and transporters to six months rather than one year.

The revisions implementing this change are summarized below, and the revised documents have been posted on the Code web site in place of the previous versions.

Cyanide Code:The Code Verification and Certification section of the Code has been revised to authorize pre-operational certification of cyanide production facilities and cyanide transport operations and to require that these facilities have a full Code audit within six months of their start of cyanide production or handling to confirm that they comply with the Code. ICMI must be advised within 90 days of the start of cyanide production or management activities at a pre-operationally certified cyanide production or transport operation. The Code is available at http://cyanidecode.org/about_code.php.

Pre-operational Cyanide Production and Transportation Verification Protocols: New Pre-Operational Verification Protocols to be used to evaluate the anticipated Code compliance of cyanide production and transport operations are available via links on the Auditing the Code page of the Code web site, http://cyanidecode.org/auditors_code.php.

ICMI announced its intent to make these changes in a notice posted on the Code web site on November 30, 2010, and solicited input from Code stakeholders on the advisability of the change as well as on any related issues that should be considered as the proposed Code revisions are made. The single comment received was from an outside stakeholder supporting the change.

Additional Guidance on Identifying Deficiencies in a Recertification Audit Report: Since recertification audits evaluate a certified operation’s compliance with the Code over the previous three-year audit period, the operation may have experienced a non-compliance situation or other potential deficiency that was corrected prior to the audit. This could result in a finding of full compliance, the same finding that would be made at an operation that had a perfect compliance record. Although ICMI’s Guidance for Recertification Audits discusses various factors to be considered by an auditor in determining the operation’s compliance status, it does not include guidance on what deficiencies should be identified in the recertification audit report. The Code changes announced today provide such guidance and instruct the auditor to describe and evaluate in the report two types of situations that may have occurred and been corrected. This will allow stakeholders reviewing audit reports to differentiate between operations found in full compliance because they had no compliance issues and those that have had problems but which have corrected them and have been found in full compliance.

The new guidance requires that the Detailed Audit Findings Reports and Summary Audit Reports of recertification audits discuss any significant cyanide incidents that the operation reported to ICMI pursuant to the requirements for such notification found in Item 6 of the Instructions for the Signatory Application Form. In addition, any cyanide releases or exposures that are subject to the disclosure provisions of Item 9.3.3 in the Gold Mining Verification Protocol must also be addressed in these reports for any operation, including those for cyanide production facilities and cyanide transporters as well as reports for gold mines. This new guidance also requires auditors to include a statement for an operation found in full compliance noting that the operation has had no compliance issues during the preceding audit cycle or that it has experienced some deficiency that has been corrected.

The following document has been revised to implement this change:

Guidance for Recertification Audits: New guidance regarding the reporting of deficiencies has been added to this document at the end of Section 5 and in a new Section 8. The updated document is available at http://cyanidecode.org/pdf/GuidanceforRecertificationAudits.pdf.

Clarification Regarding Cyanide Storage in a Warehouse: Cyanide storage at a gold mine is evaluated using the Gold Mining Operations Verification Protocol. Storage of cyanide that occurs during transport when changing carriers or transport modes is termed interim storage under the Code, and is evaluated using the Verification Protocol for Transportation. Any storage other than interim storage and storage at a mine site is considered to be a production activity and is evaluated using the Cyanide Production Verification Protocol. In order to clarify the applicability of the various Protocols, ICMI is adding definitions of interim storage and warehouse to its Definitions and Acronyms document, and revising the Auditor Guidance for Use of the Cyanide Transportation Verification Protocol to differentiate between interim storage activities and storage in a warehouse. Additionally, references to Code-equivalent, non-certification audits remaining in the Introduction to the Cyanide Production Verification Protocol have been deleted; the use of Code-equivalent, non-certification audits was eliminated in October 2009 but these references were not deleted at that time.

Clarifications regarding the use of the Cyanide Production Verification Protocol for evaluating cyanide storage in a warehouse have been added to the following Code documents:

Definitions and Acronyms: New definitions for the terms interim storage and warehouse have been added to this document, available on the Code web site at http://cyanidecode.org/about_definitions.php.

Auditor Guidance for Use of the Cyanide Transportation Verification Protocol:Changes have been made to Sections 1 (Use of Protocol), 2 (Scope) and 9 (Consignor Supply Chain Audits and Due Diligence Investigations) of the General Guidance portion of this Guidance document, and the discussion under Principle 2, Interim Storage, has been revised with language consistent with the new definition of interim storage. The revised document is available at http://cyanidecode.org/pdf/TransportAuditorGuidance.pdf.

Monday, January 24, 2011