Cobalt value chains face a distinct set of contracting challenges, including buyer-supplier relationships that rely on one-sided, supplier-only warranties rather than shared human rights and environmental due diligence (HREDD) obligations; gaps in maturity between large-scale miners, refiners, recyclers, and service providers; and a fragmented landscape of overlapping Codes of Conduct, assurance schemes and due diligence approaches.

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These contracting challenges have practical consequences. Like other complex mineral value chains, cobalt value chains can be exposed to serious human rights and environmental risks, including child labour and unsafe working conditions in artisanal and small-scale mining, as well as harm to communities and the environment. Contracts cannot address these risks on their own, but they can help clarify responsibilities, align incentives, and support prevention and remediation.

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Against this backdrop, this Paper focuses on how contracts can actively support effective HREDD. It reflects RCP's four Core Principles: shared responsibility instead of risk-shifting, responsible purchasing practices, remediation first, and responsible exit.

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The Paper addresses a recurring challenge in cobalt value chains, which is what stakeholders describe as a "war of the codes" — buyers and suppliers each applying their own Codes of Conduct, due diligence tools, and assurance frameworks, often without recognising equivalent processes already in place elsewhere. This can drive duplication and audit fatigue, diverting resources from actual risk prevention and remedy. Multiple assurance schemes currently operate across the cobalt value chain, including mine-site performance standards, smelter and refiner due diligence and chain-of-custody schemes, as well as evolving national frameworks. The Paper explores how contracts can support due diligence and quality assurance, better oversight on subcontracting, transparency, traceability, data-sharing, and operational level grievance mechanisms in cobalt value chains.

 

Companies can use this Paper as a practical framework to review existing commercial arrangements, identify gaps, and prioritize improvements. Responsible Contracting begins with three steps:

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✔ Map the relevant relationships and contract architecture. Identify supplier and business partner relationships within the cobalt value chain, along with the key contract types that govern them — offtake, tolling, transport, major services, framework agreements, Supplier Codes of Conduct, and GTCs.

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✔ Review priority contracts against key HREDD elements. Assess whether contracts reflect shared responsibility and proportionate and realistic risk-based due diligence obligations, workable interoperability and assurance approaches, responsible purchasing practices, stronger subcontracting oversight, credible traceability and grievance arrangements, and remediation-first escalation pathways.

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✔ Embed contract review into existing governance. Build contract review into existing governance and review cycles, with clear triggers for amendments and shared responsibility across legal, procurement, and sustainability teams.

 

RCP developed this Paper with support from the Cobalt Institute, informed by engagement with its members and other stakeholders across the cobalt value chain. The Paper reflects the views of RCP alone; it does not represent a Cobalt Institute standard, position, or endorsement, and the Cobalt Institute bears no responsibility for its content.

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