SEC Narrowly Votes to Force Companies to Disclose Use of Conflict Minerals
American companies using minerals from a war-torn African country will now have to disclose this practice under two new rules adopted by the Securities and Exchange Commission (SEC) by votes of 3-2 and 2-1.
As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC crafted a new regulation that mandates companies to publicly reveal their use of “conflict minerals” from the Democratic Republic of the Congo (DRC) or an adjoining country.
Conflict minerals are defined as tantalum, tin, gold and tungsten.
The new rules are intended to reduce corruption and promote transparency among companies doing business with the DRC. Section 1504 requires companies to disclose to all payments made to either the U.S. or a foreign government for the extraction of oil and minerals, while section 1502 requires companies to examine their supply chains to determine and disclose if their products contain minerals from the DRC or surrounding countries.
SEC officials estimate that section 1502 would cost companies $3 billion to $4 billion initially to comply and another $206 million to $609 million annually for compliance.
-Noel Brinkerhoff, David Wallechinsky
To Learn More:
SEC Adopts Rule for Disclosing Use of Conflict Minerals (Securities and Exchange Commission)
SEC Narrowly Approves Reporting Rules on Resource Extraction, Conflict Minerals (by C.M. Mathews, Wall Street Journal)
Mining Companies Ask for Delay in SEC Conflict Minerals Ruling (by Noel Brinkerhoff, AllGov)
The War at Our Fingertips (by David Wallechinsky, AllGov)
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