As recently reported in Fast Company, the SEC has proposed a Dodd-Frank Act provision that requires public companies to “disclose if and how they are involved in the manufacture, mining, or final-end use of conflict minerals.”
An important regulation, and here’s why, from the Fast Company coverage:
Halfway around the world, human rights atrocities are too commonplace for most to even imagine. To some of the factions warring for political control in central Africa, murder, rape, torture, and slavery are mere battle tactics. And average Americans play a role in financing these horrors every day.
For your reference, here’s what law firms and lawyers on JD Supra are writing about the Dodd-Frank Conflict Minerals provision:
– SEC Proposes Rules Relating To Specialized Disclosure Of Use Of Conflict Minerals (by Wilson Sonsini Goodrich & Rosati):
“On December 15, 2010, the Securities and Exchange Commission (SEC) proposed rules to implement Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which requires new disclosures by reporting issuers concerning their use of conflict minerals (generally tantalum, tin, gold, or tungsten) that originated in the Democratic Republic of the Congo or an adjoining country.
Section 1502 of the Dodd-Frank Act amended the Securities Exchange Act by adding a new Section 13(p), which requires the SEC to promulgate disclosure and reporting regulations regarding the use of conflict minerals from the Democratic Republic of the Congo and adjoining countries (together, the DRC Countries). According to the Dodd-Frank Act, the extreme levels of violence in the eastern Democratic Republic of the Congo financed by the exploitation and trade of conflict minerals originating in the DRC Countries led Congress to enact this provision…” Read on»
– SEC Issues Proposed Rules for “Conflict Minerals” Disclosure (by Bryan Cave):
“Congress stated its concern in Section 1502(a) that ‘the exploitation and trade of conflict minerals originating in [that region] is helping to finance conflict that is characterized by extreme levels of violence … particularly sexual- and gender-based violence, and contributing to an emergency humanitarian situation.’ This provision of Dodd-Frank is another example of Congress using the disclosure requirements applicable to public companies to implement social policy.
The new law and related proposed rules (primarily contained in a new Item 104 to Regulation S-K) have broad applicability. Any reporting company, including foreign private issuers and smaller reporting companies, that manufactures or contracts to manufacture products for which “conflict minerals” are “necessary to the functionality or production” of those products must comply…” Read on»
– SEC Proposes Rules to Implement Dodd-Frank Conflict Minerals Disclosure Requirement (by Womble Carlyle):
“The proposetsd rules would require any company that is subject to SEC reporting requirements pursuant to Section 13(a) or 15(d) of the Exchange Act and for which conflict minerals are necessary to the functionality or production of a product manufactured, or contracted to be manufactured, by that company to disclose in its annual report whether its conflict minerals originated in the Democratic Republic of the Congo or an adjoining country. If so, the company would be required to furnish a separate report as an exhibit to its annual report that would include, among other things, a description of the measures taken by the company to exercise due diligence on the source and chain of custody of its conflict minerals and an independent private sector audit of the company’s report. The SEC is soliciting comments on the proposed rules through January 31, 2011 and is required to adopt final rules implementing the conflict minerals disclosure requirements no later than April 15, 2011…” Read on»
– SEC Issues Proposed Rules Regarding Conflict Minerals Disclosure (by Katten Muchin):
“Section 1502(e)(4) of the Dodd-Frank Act defines ‘conflict mineral’ as cassiterite, columbite-tantalite, gold, wolframite, or their derivatives, or any other minerals or their derivatives determined by the Secretary of State to be financing conflict in the DRC countries. The proposed rules are expected to apply to many more issuers than might have first been expected due to the various uses of conflict minerals and their derivatives and the SEC’s broad definition of ‘manufacture’…” Read on»
– SEC Proposes “Conflict Minerals” Disclosure Rules to Implement Dodd-Frank Provisions (McDermott Will & Emery):
“…requirements for audits and reports by public companies to show whether certain minerals used in their manufactured goods originate in war-torn Congo or adjoining countries in Africa. The law is intended to address widespread corruption, human abuse and genocide in that region by imposing supply-chain due diligence on manufacturers that use in their products “conflict minerals” that fund groups responsible for the atrocities. Public U.S. manufacturers should closely monitor and comment on this rulemaking to ensure practicable compliance…” Read on»
“The conflict minerals legislation is intended to address the ongoing conflict in the eastern DRC. The premise of the bill is that the sale of certain minerals are helping armed groups continue to buy weapons and fund their fighting. These minerals are frequently referred to as “conflict minerals,” and are comprised of tantalum (coltan), cassiterite (tin), wolframite (tungsten), and gold. These minerals are commonly utilized in a variety of commercial products, such as automobiles, cellular phones, and airplane engines. The legislation therefore affects a large spectrum of industries, including technology, automotive, mining, jewelry, and aerospace…” Read on»
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(* image thanks to Conflict Minerals and Blood Tech)